Fortuous

Selling your business: what are the tax implications?

Fri, 28 Apr 2023 15:59:00 GMT

Selling your business is a big decision. If you’re incorporated as a limited company, you’ll usually be faced with two choices for how to structure this sale.

You can choose between:

Both routes have their own distinct tax outcomes. Having a good understanding of these implications is extremely important before you make a decision on your preferred route.

Deciding on the most tax-efficient route to a sale

Let’s assume that you’re running a business that was set up as a limited company. When you want to sell the business, the tax and other implications of selling either the trade or the company shares can be very different.

Buying the business from the purchaser’s point of view

If you’re the purchaser, buying the shares is straightforward. However, buying the company shares does not produce any tax-deductible expenses for the purchaser, unless you subsequently sell the shares on. At that point, the purchase cost will be deductible for capital gains tax purposes.

In addition, because the company is carrying on as the same legal entity, you’ll want to carry out an enhanced due-diligence exercise to attempt to establish if there are any undisclosed or contingent liabilities. In effect, you’re taking over any ‘baggage’ that’s come about prior to your period of ownership, so it’s sensible to check what these liabilities are, so they’re on your radar.

Buying the assets, however, creates a tax-deductible cost base, certainly for any qualifying plant, machinery and equipment. Subject to fairly strict conditions, this can also create a tax-deductible cost base for any goodwill arising. But there may be complexities in transferring licences and customer and supplier contracts from the old company into whichever new entity is used to carry on the business in the future. Also, any trading losses incurred by the old company will be lost.

Talk to us about a tax-efficient sale of your business

Because the preferred route for the buyer and seller will often be conflicting, the final route you choose can have a significant effect on the selling price that’s achieved.

Whether you’re buying or selling a business, it’s important to clearly understand which route has the most benefits and advantages for you. If pressure from the other party pushes you towards a sub-optimal choice, you should seek some appropriate adjustment to the selling price.

It might be that you have a group structure, with more than one company in the mix for at least 12 months prior to the sale. In this scenario, the tax situation can be very different if the legal entity selling the shares is itself another limited company. It’s often useful where no such group structure exists to create one in advance. You can do this by forming a dormant subsidiary, purely to be able to take advantage of that scenario. In effect, the conflict can be resolved by the vendor transferring the trade down into a dormant (even newly formed) company, therefore without any historical liabilities, and then selling those shares to the purchaser.

If you’re thinking of selling up, we can run you through the best possible way to plan this sale.

The post Selling your business: what are the tax implications? appeared first on Fortuous .

What is Making Tax Digital for Income Tax Self Assessment?

Mon, 17 Apr 2023 12:32:00 GMT

Making Tax Digital is changing how we submit tax returns. And with Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) coming into force from April 2026, it’s time to start planning how you’ll meet the compliance requirements for MTD for ITSA.

We’ve highlighted the four main areas where you need to take action, to be ready for the deadline – so you maximise all the benefits of going digital.

The basic requirements of MTD for ITSA

MTD for ITSA will affect you if you’re running a self-employed business or you’re a landlord with annual business or property income initially above £50,000. To comply with the MTD for ITSA rules when they kick in from the 2026/27 tax year, you’ll need to:

This switch from an annual self-assessment tax return process to quarterly and annual returns is a major change. It means increasing your interactions with HMRC, keeping extremely accurate digital records and having a highly defined process for your tax return.

Some people will already be set up to meet these digital requirements. But, if you’ve not yet jumped onto the digital bandwagon, there are a few important steps to think about.

Switching to a digital tax process – what you need to do

The aim of MTD is that, over time, the whole of the UK tax system will move to digital. But for this to work, taxpayers, bookkeepers and accountants all need to take action, so every stage in the tax process can be carried out in the digital realm.

From the point of view of a self-employed business or landlord, this will mean:

Talk to us about preparing for MTD for ITSA

Switching over to MTD for ITSA isn’t just a compliance requirement. Going digital also helps you run a more effective and flexible accounting and record-keeping system into the bargain.

You’ll have:

If you’d like advice on getting ready for the April 2026 MTD for ITSA deadline, feel free to contact us. We’ll help you understand what’s required, what the best software solutions will be for your business and the key changes you’ll need to action.

Get in touch to get set up for MTD for ITSA.

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Getting your bookkeeping ready for a digital future

Fri, 07 Apr 2023 14:30:00 GMT

Keeping up-to-date records of your business transactions isn’t the most glamorous part of being an entrepreneur, that’s for sure. But, in reality, having accurate and up-to-date bookkeeping is actually one of the core ways to keep your finances (and your business) under control

Digital bookkeeping is the future of your finance

The digital age has revolutionised the way many business owners carry out their bookkeeping. From digital accounting to real-time data, the modern bookkeeper is now equipped with the tools and resources to make the job easier, more efficient and (crucially) less time-consuming.

When your bookkeeping goes digital, that means:

Talk to us about switching to digital bookkeeping

If you want to transform your bookkeeping, now’s the ideal time to go digital.

Talk to our team and find out what bookkeeping or accounting software is right for your business.

Once you see the efficiency, accuracy and long-term benefits of digital bookkeeping, you’ll understand why going digital is a no-brainer, whatever type of business you run.

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The top tax-effective benefits to offer employees

Fri, 31 Mar 2023 15:26:00 GMT

Offering benefits-in-kind to your staff is a great way to make your business an attractive place to work. And these benefits add even more value if they’re also either tax-effective or tax-free.

You can offer certain concessions that make benefits provided to your employees (including directors) either low-tax or no tax. To be clear, we’re talking here about general employee benefits, not higher-value items such as company cars or share options etc.

Under certain circumstances, these general benefits-in-kind (BiK) become taxable if they’re provided as part of a flexible salary sacrifice system. But let’s look at the kinds of benefits you can offer – and the avantages they have for your employees.

The top tax-effective benefits to offer your team

If you want to offer employee benefits, but don’t want these BiK to end up attracting significant tax penalties for the employee, there are several useful benefits to consider.

For example:

You can find out more details on the many available employee benefits-in-kind on the Expenses and benefits: A-Z page on the HMRC site .

If you provide a range of attractive tax-effective benefits to your employees, this goes a long way to creating a more satisfied, happy and productive workforce.

Many of the rules around employee benefits are complex and difficult to calculate, so it’s well worth talking to us about your benefits plans and where we can offer advice. We can walk you through the available options and show you the tax implications for your team.

Talk to us about reviewing your employee benefits.

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How does the Substantial Shareholding Exemption help your business sale?

Tue, 21 Mar 2023 13:21:00 GMT

When selling your limited company, you want to do so in the most tax-efficient way possible. Making use of the Substantial Shareholding Exemption (SSE) is one way to do this.

Let’s dive in and see how the SSE limits the corporation tax you pay on any capital gains.

Why should I consider the Substantial Shareholding Exemption when selling up?

Selling a business that’s operated through a limited company means thinking about what you’re actually selling. As the vendor, you’ll usually prefer to sell the shares, whereas the purchaser will often prefer to buy the trade (the goodwill and other assets held by the company).

Although there are other considerations, with one of the main issues being a wish on the part of the purchaser to avoid exposure to any legacy issues that may not be readily apparent. One way to square that circle is through a particular use of the SSE.

How does the SSE actually work?

SSE exempts from tax any capital gain on the sale of shares by a company, but not by an individual. To achieve this, you need to make sure that certain key conditions are met.

So, how does this work in practice?

Making use of the specific benefits of the SSE requires the existence of a group structure, so that one company owns shares in another. The company (Seller) making the disposal must be a trading company or a member of a trading group, andThe company (Target) who’s shares are being sold must be a trading company or the holding company of a trading group, and‘Seller’ must have held at least 10% of the shares in Target for at least 12 months prior to the disposal.

Presuming that the trading company is not already in a group, the easiest way to form a group is to set up a dormant subsidiary. This subsidiary can sit there doing nothing until you, as the owners, want to sell up.

At that point that you decide to sell the business, the trade can be transferred down to the subsidiary (or even a brand new subsidiary). This shields that entity from any potential legacy issues. The shares in that ‘clean’ company can then be sold, with the gains being tax-free due to the benefits of making use of the SSE.

What are the main advantages of making use of the SSE in this way?

If your potential purchaser is concerned about legacy issues that may affect the entity being acquired, this can reduce the value of, or even block, any potential deal. To protect your deal – and reduce the risk for your purchaser – using the SSE is the way to go.

There are two core benefits:

Talk to us about planning for a business sale

The SSE rules are complex, and this is a very brief summary of the key points.

If you operate a trading company that’s not already in a group structure, forming a group may well allow significant tax savings if the business is sold later. This group structure and dormant subsidiary does need to be set up well in advance to take advantage of the SSE benefits.

Talk to us about the structure of your business activities so we can advise you on the best ways to structure the business and your company interests.

Apart from SSE considerations outlined above, there can be asset protection advantages of setting up a holding company to hold assets above the trading company. There are also other strategies such as linked investment companies to deal with non-trade activities such as property rental.

Get in touch to talk about the benefits of a group structure.

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Why your accountant is the mentor you didn’t know you needed

Mon, 13 Mar 2023 13:18:00 GMT

A business mentor can provide guidance and support, so you make the right decisions and stay focused on the end goal as a business owner. They can also help you move forward in your career by providing advice and feedback on what steps to take to reach the pinnacle of success.

But have you ever thought of your accountant as a mentor?

Why your accountant is the ideal mentor

Having someone who understands your business journey is incredibly important. You might see an accountant as someone who files your tax returns. But, in fact, we’re experienced business owners, with access to a significant network of other business professionals.

An accountant can be the mentor you didn’t know you needed. No-one knows your business better than us, so we’re perfectly placed to offer you advice, guide your business journey and help you push your skills and capabilities as a business owner.

As a mentor, an accountant will:

Having someone to guide your business journey can be invaluable. A business owner must grow and evolve along with their business, and having regular mentoring catch-ups is the ideal way to progress, offload your concerns and look for new inspiration.

If you want to grow as an entrepreneur, please come and talk to us about our mentoring services and how we can guide your business future.

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5 ways to get in control of your business finances

Mon, 06 Mar 2023 14:01:00 GMT

Having proper control of your business finances is a big advantage. It helps you make well-informed business decisions and keeps your organisation profitable.

With so many digital tools for managing your bookkeeping, accounting and management reporting, it’s never been easier to manage, track and forecast your financial position.

But what are the main tools you need? And how do you set up your financial systems, apps, processes and reporting to put yourself back in the finance driving seat?

1. Bring your bookkeeping into the digital age

Digital bookkeeping apps are a great way to digitise your receipts, records and source documents. This not only saves a lot of time at year-end, it also makes it much easier for you to keep track of your company’s finances and accounting. Keeping your receipts in a box to manually enter at period-end is no longer enough. Take the next step and digitise your receipts at source, so you have up-to-date digital records and copies of source documents.

Optical character recognition (OCR) software, like Dext Prepare or Auto Entry, scans the receipt, converts it into a digital format and stores it in the cloud.

2. Do your accounting in the cloud

Cloud accounting is a software-as-a-service (SaaS) solution that helps you carry out all your main accounting and financial management online, without having to install any software.

Cloud accounting providers, like Xero, QuickBooks, MYOB or Sage, design their accounting platforms to take the pain and hassle of business accounting. You get all the tools and features you need to work on your accounting tasks. And your platform provider will also take care of all the data storage, backups and security of your data.

A good cloud accounting platform does more than just save your hard drive space. It also provides you with tools and dashboards that improve your access to management information, financial reporting, forecasting and projections, performance tracking and more.

3. Use the latest in expense management tools

Expense management can be a time-consuming and tedious job. But it’s also a vital task that helps you ensure you’re spending company money wisely and not overspending. If employees start going over their budget limits, this can be a costly mistake for the company and your cashflow.

Expense management tools, such as Soldo, Weel or Pleo, help you manage staff spending by giving employees virtual cards that are linked to a specific budget, account and code. This helps you track their expenses easily and make sure they’re staying within their budgeted limits. These platforms also give you detailed reporting and analytics, so you can see where money is being spent, and where savings can be made.

4. Make it easy to accept digital payments

The problem of slow payment is one of the most frustrating things for small businesses. If your customers don’t pay on time, this can result in a loss of revenue, poor cashflow and an inability to cover your basic costs and overheads. To resolve this issue, many companies have begun to switch to digital payment platforms that make it simpler, faster and easier to collect payment.

Payment platforms, like PayPal, Square or Stripe offer faster payment times and more control over the customer experience. Some platforms even integrate with your cloud accounting, so you get automatic bank reconciliations.

5. Embrace the latest in digital reporting and forecasting

With digital accounting changing so rapidly in recent years, there’s never been a better time to embrace the benefits of the latest in digital reporting and forecasting.

Economic conditions are hard to predict. So it’s crucial to be able to quickly analyse data, check your performance and make predictions about how your company will fare in the coming months. When you use cloud solutions for financial reporting and key metrics, you’ll be able to monitor trends in real-time while having access to the data anytime, anywhere.

Having this information at your fingertips helps you make informed decisions faster than ever before – and that translates that into more sales, increased business growth and bigger profits.

Talk to us about updating your financial systems

If you’re looking to give your finances a touch of digital magic, please do come and talk to us.

We can walk you through the best cloud platforms, fintech apps and business tools to add to your app stack – so you’re ready to make the most of a digital approach to your finances

Get in touch to supercharge your finances.

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What should be on a VAT invoice?

Sat, 25 Feb 2023 15:58:00 GMT

Whether you’re selling or buying, it’s important to make sure that any VAT invoices you issue or receive comply with the strict VAT regulations.

Failing to do so can cause problems both for you and for your customers.

If you reclaim VAT using a defective invoice, HM Revenue & Customs (HMRC) can disallow the claim. HMRC can also charge penalties and interest on any amounts you’ve incorrectly claimed. Equally, your business has an obligation to your customers to send out invoices that meet the regulations and include the right documentation to support their VAT claims.

The three different types of VAT invoice

There are three types of document that can be produced, so it’s important to understand the differences between these three and to use the right type for your business usage.

1. A simplified invoice

The simplified invoice is intended for sales under £250 and keeps the amount of information on the invoice to a minimum. The invoice must include:

2. A full VAT invoice

A full VAT invoice is the standard invoice in most circumstances and is more comprehensive than the simplified invoice. It includes the same fields as the simplified invoice plus:

3. A modified VAT invoice

A modified VAT invoice can be issued in respect of retail sales exceeding £250. They contain the same information as a full VAT invoice, and in addition must include the total charged including VAT. In practice, that will be on the full VAT invoice anyway.

Making sure you stick to the regulations

With the choice of three different types of VAT invoice, it’s vital to choose the right type of documentation and to also make sure you adhere exactly to the guidance and regulations.

Helping you keep your VAT procedures in order

As you can see, it’s important to have your own VAT invoices in order and to have proper VAT invoices for any purchases where you are reclaiming VAT charged.

As your adviser, we can check that the invoices you produce comply with VAT regulations, and check more-generally that your VAT procedures are robust.

Get in touch for a review of your VAT procedures.

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New UK corporation tax rates from April 2023

Tue, 14 Feb 2023 10:43:00 GMT

Did you know that the UK corporation tax rates are changed from April 2023?

From 1 April 2023, the rate of corporation tax changes from 19% to a variable rate between 19% to 25% , depending on the profits made by your business. This could mean a change to what you will owe in tax for the 2023/24 tax year.

What are the main changes to corporation tax?

Prior to the change, corporation tax (CT) is charged at 19% for most companies. The only exceptions are companies in specific sectors like banking, oil, gas and life insurance.

From 1st April 2023 the rate of tax changes:

The thresholds will work as follows:

How will this actually work in practice?

So, what does this mean for your CT bill? If you have no associated companies, then where your profits are below £50,000, your tax will continue to be paid at 19%. If your profits exceed £250,000, your tax rate will be 25% – meaning a significant jump in what you lose to tax.

In between these two points, tax will be calculated at 25%, then marginal relief calculated by using the formula (U-A) x N/A x F where:

Presuming A = N = £100,000 then the initial tax calculation at 25% gives a maximum tax charge of £25,000.

The marginal relief is (250,000 – 100,000) x 1 x 3/200 = £2,250, and the tax actually payable is £25,000 – £2,250 = £22,750.

Remember this assumes a full 12 months accounting period and no associated companies. If there was an associated company (therefore two in total) then U would be £125,000 and the marginal relief would be £375, leaving tax due at £24,625.

It’s worth noting that ‘augmented profits’ is your taxable profits plus any exempt dividends received from non-group companies.

Talk to us about planning for these CT changes

Any change to your CT liabilities can have a significant effect on your financial position. It’s sensible to talk to your advisers as soon as possible to work through your planning options.

There are two key areas where we can help:

Get in touch to talk through your tax planning.

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Book a tax planning conversation with us today

Mon, 06 Feb 2023 06:55:00 GMT

The days of deciding on a tax planning at the start of the year and then forgetting about it are gone. As taxpayers and tax advisers, we both have to be nimble, flexible and aware of changes. That’s why regular tax-planning sessions are so important.

The need for regular tax-planning conversations

As your accountant and tax adviser, we want to help you get the best outcomes from your tax planning. In the current environment, that’s difficult to achieve if we only speak to you about tax on an annual basis.

The frequency of these tax planning chats will depend on the size of your business, and the complexity of your structure and shareholder set-up. But we should be talking to you at least once every quarter about the tweaks and changes that are needed in your plan.

In these tax planning sessions, we can:

Talk to us about booking in a tax-planning session

We’ll always do our utmost to help you plan out your tax liabilities and keep the business in a positive cashflow position.

Book a tax-planning conversation with us and let’s start improving your strategy.

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Change of Tax Basis Period for unincorporated businesses: are you ready?

Tue, 17 Jan 2023 14:21:00 GMT

Are you self-employed? Or are you a partner in a trading partnership? If you are, you should be aware of the proposed changes to the tax basis period for unincorporated businesses.

HM Revenue & Customs (HMRC) is proposing to change the way that unincorporated businesses are taxed , moving from a ‘current year’ basis to a ‘tax year’ basis. For affected businesses (those that don’t have a year-end between 31 March and 5 April), this could mean a much larger tax bill for the 2023/24 tax year.

So, when are these changes coming in? And what will the potential impact be for sole traders and partners?

What does a change in the base period mean?

Self-employed people and partners in trading partnerships generally prepare accounts to the same fixed date each year. This is known as the ‘basis period’. For tax purposes, profits are currently taxed in the tax year in which the basis period ends.

Talk to us about the proposed changes to your accounting period-end

If the year-end for your business is not currently between 31 March and 5 April, you will potentially be taxed on more than a year’s profits in 2023/24.

Even with a facility to spread the excess, your tax bill will be higher and you could be forced into a higher marginal rate of tax – with all the negative impacts on your tax liabilities. This could be a very serious outcome if you’re not prepared for the changes.

For affected businesses, we can help you prepare forecasts of the likely impact, and consider ways to ease the transition. The earlier you begin planning, the smoother the transition will be.

Talk to us about the impact of the base period changes.

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5 goal-setting tips for 2023

Thu, 12 Jan 2023 15:51:00 GMT

Effective goal setting will help you get the very best out of 2023. Our 5 goal-setting tips will help small business owners reach new highs.

Whether you want to grow your business or take more time for yourself, these goal-setting tips can help you achieve your long-term plans.

We can help

Not sure what your goals should be or how to monitor them? We can show you where to find the information you need, how to check on it, or keep an eye on it for you.

Our team also has some fantastic ideas for how to reach your goals and build your business – get in touch!

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Happy New Year

Tue, 03 Jan 2023 11:03:00 GMT

Thank you for your business in 2022.

We wish you a Happy and Prosperous New Year – we hope it brings you health, wealth, and happiness.

For business owners, this is often the time of year when you reflect on where you are at and think about your business goals for the year ahead.

These could be lofty goals, or even setting out a plan to achieve some more mundane (but equally important) projects. Whether that is getting paid faster, reassessing expenses, or bigger things like automation of processes and new markets.

We are here to help you achieve your goals for your business and we look forward to working with you in 2023.

From the Fortuous team.

P.S. If you do end up making a personal new year’s resolution or two, just make sure you don’t tell anyone….

It makes it much harder to break them!

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The Risk Management Cycle

Wed, 21 Dec 2022 14:52:00 GMT

How do you identify, record, assess, mitigate and monitor risk in your business? Risk impacts our time, mind and financial freedoms – we can help you develop your Risk Register and embed a risk management framework into your business strategy.

How do you identify, record, assess, mitigate and monitor risk in your business?

Every business has risk exposure and all business decisions carry risk, many with financial or legal implications. Directors and business owners must invest time into identifying and managing risk as an ongoing business strategy.

Time spent managing risk pays off. It allows you to anticipate, analyse, and mitigate (or at least minimise) risks before they materialise.

It’s not a ‘set and forget’ task; but an ongoing cycle of identifying, recording, assessing, mitigating, and monitoring to ensure you address the evolving risk in your business.

1. Identify. Determine potential risks by analysing each department and consulting with team leaders and members.
2. Record. Document identified risks in a Risk Register and update it regularly.
3. Assess. Evaluate the risk based on likelihood and consequence.
4. Mitigate. Implement strategies to mitigate risks, actions, and responsibilities.
5. Monitor. Track implementation of risk management strategies and respond quickly if a risk increases or needs reassessing.

Risk management strategy comes from the top.

No matter the size of your business, putting structures, processes, and procedures in place enables risks to be quickly identified, mitigated, and managed in order of significance.

Risk impacts our time, mind, and financial freedoms.

We can show you how to identify the most critical risks in your business using our Risk Register, and help you establish risk management as an ongoing strategy for all departments.

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The business impact of the Autumn Statement

Tue, 13 Dec 2022 08:29:00 GMT

What was the business impact of the Chancellor’s Autumn Statement? We’ve highlighted the key measures your business should be working

The Chancellor of the Exchequer, Jeremy Hunt, delivered his Autumn Statement on 17 November 2022. The £30bn cost of his predecessor’s catastrophic ‘mini budget’ hung heavily over this financial statement. Mr Hunt’s job was to reinstate confidence in the Government’s fiscal capabilities and to inject some optimism into the global perception of the UK economy. To do this, he needed to deliver a clear strategy for economic success.

The elephant in the room, though, is the current challenging economic outlook for the UK.

According to the Financial Times , the latest figures from the Office for Budget Responsibility (OBR) show that:

The Autumn Statement focused on ‘stability, growth and public services’. And, on the whole, big business and the City have cautiously welcomed the key announcements.

But has the Chancellor done enough to support UK enterprise?

Key Autumn Statement measures for business owners

Here are the main announcements we think should be on your radar.

Talk to us about the business impact of the Autumn Statement

There are choppy economic waters ahead for the UK’s business leaders. Navigating the coming year will be challenging, so it makes sense to review and refresh your business strategy and 2023 planning. We can help you analyse your planning and bring things up to date.

If you’re concerned about any of the Autumn Statement announcements, or want to sit down and talk through your 2023 strategy, please do contact us for a chat.

Get in touch for a planning chat.

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Trading while insolvent: what are the rules?

Mon, 05 Dec 2022 11:16:00 GMT

Your company is insolvent when it can’t pay the amounts it owes. This can mean that the liabilities (things you owe) on your business balance sheet exceed the assets (things you own), or that you can’t pay your supplier bills when they’re due.

If this happens, it could mean that you and your fellow directors become personally liable for debts incurred by the company – removing some of the benefit of your limited liability.

What should you do if your company becomes insolvent?

One of your responsibilities as a director is to stop the business trading when the company becomes insolvent. It’s right and proper to cease trading if you know the company is not in a position to pay its bills or settle its debts.

But there are rules around how you do this:

How can insolvency affect your long-term business plans?

What happens if your company does become insolvent? And how does this affect your long-term plans and strategy for the affected business?

It could be that you don’t believe you can turn the company around by trading out of a short-term difficulty. If this is the case, you need to consider either putting the company into liquidation, or entering into a company voluntary arrangement.

Although wrongful trading is a civil offence, if there is intent to deceive and defraud creditors and customers, this can be considered to be fraudulent trading – this is a criminal offence.

Talk to us about how we can help you avoid or deal with insolvent trading

Having monthly or quarterly management accounts prepared helps you spot the early warning signs of potential insolvency. If you rely solely on your annual accounts, this can be a case of ‘too little, too late’. We’ll help you produce regular accounts to monitor your financial health.

If you’re seeing signs of financial strain in your company, talk to us about ways we may be able to help you deal with the situation. And get in touch sooner rather than later.

If necessary, we can put you in touch with an insolvency practitioner, who can implement other actions such as:

The earlier you talk to us, the less drastic any required solution may be.

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The impact of the Autumn Statement for self-assessment taxpayers

Thu, 01 Dec 2022 15:57:00 GMT

This year’s Autumn Statement was highly anticipated – particularly given the financial chaos that followed the disastrous ‘mini budget back in October 2022. The current Chancellor, Jeremy Hunt, announced a new fiscal strategy that aims to deliver stability, growth and public services.

But with a cost-of-living crisis already affecting many people, and the announcement of a two-year-long UK economic recession, the year ahead is looking challenging. So, what have the main Autumn Statement measures done to relieve these financial pressures? And what will the impact be for your personal wealth and tax liabilities?

We’ve pulled out the key personal tax announcements for you.

The key personal tax measures from the Autumn Statement

These are the main personal tax and planning measures that we think you should be aware of:

Talk to us about the impact of the Autumn Statement

If you think your personal wealth and tax planning will be affected by the Autumn Statement, please do come and chat to us. We can help you walk through the implications of the various tax measures and how planning could make you more tax efficient for 2023.

If you think you’ll be affected by MTD for ITSA, we’ll help you understand the implications. We’ll also introduce you to the right software to keep you compliant and in control of your numbers.

Get in touch to talk through your tax planning.

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Jeremy Hunt’s Autumn statement – 2022

Fri, 18 Nov 2022 15:21:00 GMT

In his opening remarks, Jeremy Hunt said his priorities are stability, growth and public services.

Main tax measures

The table below shows the tax bands.

Other Measures

If you’d like to talk to us about any concerns or worries related to the main announcements, please do get in touch.

We’ll be happy to explain more of the details and help you start planning a 2023 strategy to overcome your biggest business challenges.

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What are self-assessment ‘payments on account’?

Mon, 14 Nov 2022 14:32:00 GMT

If your only income is from employment, your tax payments are pretty straightforward. But if you have other sources of income – things like dividends, self-employment or property rental – your tax affairs can get a bit more complicated.

Under the self-assessment system , you’ll have to make ‘payments on account’ for your income tax liabilities. But what exactly is a payment on account?

How does self-assessment income tax work?

The self-assessment system for personal tax pulls together all of your taxable income (regardless of source) for each tax year (the 12 months ending on 5 April each year).

This covers your:

The gross amount of tax due, together with student loan repayments and National Insurance (other than NI on employment income), is then calculated. This gross amount takes account of your personal allowances and any deductions that may be available.

How are your payments on account calculated?

So, how does HM Revenue & Customs (HMRC) work out the payments on account (POA) that will be due? The relevant tax charge is the gross tax due (excluding capital gains tax and student loan repayments) plus Class 4 National Insurance contributions.

Where that amount is less than £1,000, or you paid more than 80% of the amount through PAYE, you can ignore POA and just settle any unpaid amounts by 31 January following the tax year end in question.

Where the relevant tax charge exceeds £1,000 and less than 80% is collected through PAYE, payments on account apply.

When are payments on account due?

There are two POAs for each tax year, each equal to 50% of the relevant tax charge for the previous tax year. The first one is payable by 31 January within the tax year, and the second one by 30 June after the tax year has ended.

If you believe that the POAs will exceed the tax that’s actually due, you can apply to reduce your payments. This could be because you expect income to fall, more of your income will be subject to PAYE or any other reason. If you reduce the POAs too much, then interest (but no penalty) will be charged on the underpayments.

NOTE: your January payment will be reduced by any tax that’s been deducted at source – for example, PAYE earnings from an employed job, or on interest that’s been earned.

So how does it work in practice?

We’ll calculate the payments on account at the same time as working on your self-assessment return. Where the POAs can be reduced, we will apply for that reduction on your behalf.

Once we’ve informed you of the amount that’s owed for January and July, it’s your responsibility to pay the tax due to HMRC. This can be paid online, or by filling out the form attached to your tax notification from HMRC and attaching a cheque.

Talk to us about your payments on account

POAs can sometimes come as a surprise to many, particularly for the first year of receiving income from sources such as self-employment and dividends, where it is not taxed at source,

We’ll help you estimate the payments that are likely to be due and will prepare you for making these two substantial payments at both points in the year.

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Are employee parties tax-free?

Thu, 10 Nov 2022 16:32:00 GMT

If the rules around social functions are followed, staff events like your end-of-year party, or your summer barbecue are tax-deductible for you, as the employer, and tax-free for your staff.

This means you can claim back some of the expenses you incur when putting on a social event for your team, while also helping to build better team bonds.

Whether your party is taking place in the office, at a local restaurant or via Zoom for your remote-working teams, you can be confident that you can recoup some of these expenses by making the relevant claim – The HM Revenue & Customs (HMRC) rules apply equally to any online staff events and remote parties.

Meeting the rules for tax-exempt staff functions

The annual function exemption means that your company can deduct costs for tax when holding an eligible annual staff social event. It also means that your employees don’t pay tax or national insurance contributions (NIC) on costs relating to these social events.

This all sounds like good news for the company bank balance, but how does the exemption actually work? And what are the specific rules that you need to know about?

The annual exemption is a great benefit for your company and staff. And it’s worth noting that if you’re a one-person company, that you could equally apply the benefit to taking your spouse out for a social event.

Talk to us about claiming expenses for your staff events

If you’re looking to run a staff function in the near future, talk to us. We can help you ascertain if your planned function meets the annual exemption requirements, and how you can claim back your party costs as a tax-exempt expense.

Get in touch, if you want to discuss this further, or if you want to arrange to cover any tax and NI for your employees through a PAYE settlement agreement.

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The benefits of splitting your property income

Mon, 07 Nov 2022 14:39:00 GMT

If your property is jointly owned by two or more people, there can be tax advantages in splitting any profits you make between you and your co-owner/s.

Splitting the profits helps you distribute the profits in a way that favours any co-owners with a lower marginal tax rate – whether that be your wife, husband, civil partner or business partner.

The rules around splitting your property profits

One of the most common forms of co-ownership is between married couples or people in a civil partnership, where you and your partner have jointly bought the property.

For a married couple, or a couple in a civil partnership, it’s initially presumed that the profit from your jointly-owned property will be split equally. But this 50/50 split may not always be ideal, particularly where one person has a lower tax rate than the other.

So, what happens if a 50/50 split isn’t right for your situation?

Talk to us about how to split your profits

As with any business profits, there can be an overall tax saving from arranging for profits to be allocated in a beneficial way. But there are restrictions in the way that the income is split.

We’ll be able to guide you through the various options available to you when splitting profits from any property rentals. We’ll also advise you on any capital gains issues that could arise that need to be thought through and planned for.

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Tax planning in uncertain times – why we need to talk about tax

Thu, 03 Nov 2022 15:36:00 GMT

We live in what might be seen as ‘interesting times’. UK politics is going through a turbulent and unpredictable time at present, leading to unforeseen changes to tax legislation, business reliefs and enterprise incentives across the board.

When the goalposts keep moving so frequently, it can be confusing:

To keep on the ball, it’s important to talk to us regularly about your tax requirements, your understanding of the latest changes and the underlying goals for your business.

The need for regular tax-planning conversations

As your accountant and tax adviser, we want to help you get the best outcomes from your tax planning. But in the current environment, that’s difficult to achieve if we only speak to you about tax on an annual basis. With tax measures currently being introduced, cancelled, reversed and then reinstated, these conversations need to happen more regularly.

In these tax planning sessions, we can:

Talk to us about booking in a tax-planning session

We’ll always do our utmost to help you plan out your tax liabilities and keep the business in a positive cashflow position. That’s why regular tax-planning sessions are so important.

The days of deciding on a tax strategy at the start of the year and then forgetting about it are gone. As taxpayers and tax advisers, we both have to be nimble, flexible and aware of the big changes taking place economically in the UK.

Book a tax-planning conversation with us and let’s start improving your strategy.

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Improve your credit score to recession-proof your business

Tue, 01 Nov 2022 12:35:00 GMT

It’s not unusual for business owners to have existing residential property investments, or to want to invest in this area. But if you’re thinking of dipping a toe into the property investment ocean, what’s the most effective and tax-efficient way to do this?

One possible approach is to put your residential properties into a limited company, creating a company structure that can be used to manage your property income.

We’ve highlighted the main steps to setting up a limited company and the key tax implications.

Thinking through the structural options

Putting your rental properties into a limited company is a move that requires plenty of thought – both around the structural options and the associated taxation issues.

Structurally, you have four main options to consider:

Each of these four options has its own pros and cons.

For example:

Knowing the tax implications of your property investment

Knowing how each structural option will impact on your finances is extremely important at the planning stage. And whichever structure is selected, you also have to factor in the various taxes that will impact on your property and investment plans.

These are the main taxes to be aware of:

Talk to us about your property tax planning

Using a PropCo to manage your residential property portfolio has pros and cons. If you transfer your residential property into a PropCo, and/or use a PropCo to acquire additional properties, plenty of thought needs to be put into the structural and tax planning side of this move.

Each case should be examined differently, taking into account things such as:

Putting your property portfolio into a PropCo is a specialist area and something where you should get bespoke advice from a property expert.

Get in touch to talk about tax planning for your property investments.

The post Improve your credit score to recession-proof your business appeared first on Fortuous .

Should you move your rental properties into a limited company?

Fri, 28 Oct 2022 11:02:00 GMT

One possible approach is to put your residential properties into a limited company, creating a company structure that can be used to manage your property income.

We’ve highlighted the main steps to setting up a limited company and the key tax implications.

Thinking through the structural options

Putting your rental properties into a limited company is a move that requires plenty of thought – both around the structural options and the associated taxation issues.

Structurally, you have four main options to consider:

Each of these four options has its own pros and cons.

For example:

Knowing the tax implications of your property investment

These are the main taxes to be aware of:

Talk to us about your property tax planning

Each case should be examined differently, taking into account things such as:

Putting your property portfolio into a PropCo is a specialist area and something where you should get bespoke advice from a property expert.

Get in touch to talk about tax planning for your property investments.

The post Should you move your rental properties into a limited company? appeared first on Fortuous .

Business tips: Setting your goals for a business exit ?

Mon, 24 Oct 2022 15:59:00 GMT

Every business has a finite lifespan. Some may last for decades, and some may only last a couple of years. As the owner of a business, the life of your business is likely to be strongly aligned with your own life goals and personal plans for the future.

When the time comes to sell up, it’s important to know what your goals are for the sale. Are you looking to retire? Or do you have a burning ambition to start a new venture?

Define your exact goals from the sale of the business

At the point of planning an exit, you need to think carefully about WHY you’re selling up and WHAT you want to achieve. This is a huge change in your life, your business career and the fortunes of your company and employees.

Ask yourself what your true goals are from this exit:

Whatever the motivation for a business exit may be, be sure to consider your options and decide on some concrete end goals.

Who is going to take over the business?

Business sales are rarely a simple process and by putting the company on the market you’re opening yourself up to a complicated process of negotiation, financial agreements and legal wrangling.

Knowing who will take over the business can be difficult to predict, but you do have several options when it comes to the end outcome.

For example, you could:

Outline how the sale proceeds will be used

Once any sale, merger or acquisition is complete, you’ll be on the receiving end of a substantial amount of money. But what do you intend to do with this money?

The way you use the funds from the sale will vary, depending on your end goals for the business exit. As the vendor, this money can fund various different life goals for you, so it’s crucial that you have a clear understanding of what you want to do with the sale proceeds.

Will the funds be used to:

Getting ready to exit the business

Selling your business is a big move, where it’s invaluable to have the best possible support and advice to guide you through the sale process.

Talk to your accountant, tax agent and other business advisers and run your exit goals past them. As a founder, it can be difficult to be objective about your business. But external advisers have the advantage of being able to look from the outside in, with real objectivity. This helps you get independent, expert advice on your exit goals, your strategy and your tax planning.

If you’re thinking about selling up and moving on, please do get in touch. We can give you the advice you need and set you on track for a successful and profitable sale.

The post Business tips: Setting your goals for a business exit ? appeared first on Fortuous .

New UK corporation tax rates from April 2023

Tue, 18 Oct 2022 12:53:00 GMT

Did you know that the UK corporation tax rates will be changing in April next year?

From 1 April 2023, the rate of corporation tax will change from 19% to a variable rate between 19% to 25% , depending on the profits made by your business. This could mean a change to what you will owe in tax for the 2023/24 tax year.

What are the main changes to corporation tax?

At the moment, corporation tax (CT) is charged at 19% for most companies. The only exceptions are companies in specific sectors like banking, oil, gas and life insurance.

From 1st April 2023 the rate of tax will change:

The thresholds will work as follows:

How will this actually work in practice?

In between these two points, tax will be calculated at 25%, then marginal relief calculated by using the formula (U-A) x N/A x F where:

Presuming A = N = £100,000 then the initial tax calculation at 25% gives a maximum tax charge of £25,000.

The marginal relief is (250,000 – 100,000) x 1 x 3/200 = £2,250, and the tax actually payable is £25,000 – £2,250 = £22,750.

It’s worth noting that ‘augmented profits’ is your taxable profits plus any exempt dividends received from non-group companies.

Talk to us about planning for these CT changes

Any change to your CT liabilities can have a significant effect on your financial position. It’s sensible to talk to your advisers as soon as possible to work through your planning options.

There are two key areas where we can help:

Get in touch to talk through your tax planning.

The post New UK corporation tax rates from April 2023 appeared first on Fortuous .

What are disbursements for VAT?

Fri, 14 Oct 2022 12:49:00 GMT

There may be occasions where your company makes payments on behalf of a client. These payments are known as ‘disbursements’ and have to be treated correctly for VAT purposes.

If your clients are not able to reclaim all their VAT on purchases, it can be beneficial to show these disbursements separately on your invoices. We’ll explain how this process works and the benefits of accounting for disbursements for VAT purposes in this way.

How do disbursements work?

Disbursements are costs incurred by you on behalf of your customers. In essence, you purchase or pay on behalf of the customer and your client becomes the recipient of the item or service, where this item/service is additional to any services or goods you may provide.

When dealing with disbursements:

What’s a good example of a disbursement?

There’s often confusion in business circles around what a disbursement is. To make things clearer, let’s take a look at some examples, to define what IS and what ISN’T a disbursement.

This is even the case for things like train fares where there is no VAT on the ticket. If you charge the costs separately to your customer, you still need to add on VAT. The supply by the railway company was to you, not to your customer.

What are the benefits of charging disbursements?

It can be useful to charge genuine disbursements separately where your customers are not able to reclaim the full amount (or any amount) of VAT from your charges. As an added bonus, in some circumstances, doing this may also keep you below the VAT registration threshold.

Disbursements are an area where people often incorrectly treat recharges and expenses as disbursements. This can happen even when the goods or services involved were clearly not actually supplied to, or for the direct benefit of, the end customer.

Talk to us about accounting for your disbursements

Disbursements are often mistreated. Because of this, the VAT treatment of disbursements is an area HM Revenue & Customs (HMRC) is very likely to check in the event of an inspection. If you’ve got it wrong, in addition to paying the uncharged VAT, you may also be liable for interest and penalties. This is an additional cost (and hassle) that you definitely don’t need.

We’ll get you up to speed with accounting for disbursements for VAT purposes. We’ll also help you overcome the issue if you have, inadvertently, misused disbursements in your invoicing.

The post What are disbursements for VAT? appeared first on Fortuous .

Could you be personally liable for your company taxes?

Tue, 11 Oct 2022 14:39:00 GMT

One of the key reasons you trade through a limited company is to reduce your liability as a director. And one key benefit of getting incorporated as a company is that you – as a company director – are not generally liable for any amounts owed by the company.

But, did you know that, under some circumstances, HM Revenue & Customs (HMRC) can transfer the liability for some unpaid taxes to you as an individual?.

What’s a Joint and Several Liability Notice?

Under certain circumstances, HMRC can issue a Joint and Several Liability Notice (JSLN) to any director, shadow director or manager. This JSLN effectively transfers liability for taxes owed by the company to you personally. That means your personal assets could be at risk, and (in a worst-case scenario) these company debts could end up bankrupting you!

The JSLN legislation covers liabilities in respect of periods ending on or after 22 July 2020, regardless of when those periods started.

Notices can be given to you in respect of:

These notices can be issued where the company has undertaken any tax avoidance measures, receives excess Covid support payments, or where there have been repeated insolvency or non-payment cases involving the same individuals.

Once a notice has been issued, you would be jointly and severally liable with the company in respect of all tax liabilities at the date of the notice. You would also be liable for any further tax liabilities arising in the next five years, or until the notice is withdrawn.

How would being served a JSLN affect you?

Suddenly becoming personally liable for your company’s tax liabilities is never going to be good news. The impact of a JSLN can be significant.

Once a notice has been issued to you, your personal assets are at risk. HMRC will do its best to reclaim any unpaid taxes owed by the company and – theoretically speaking – HMRC can claim against you without pursuing the company first.

Talk to us about any risks you may face around JSNLs

If a JSLN is issued, you should contact us immediately. You only have a window of 30 days to ask for a review of the decision to issue the JSLN, or to appeal against it.

We’ll be happy to talk through your situation and help you communicate with HMRC.

The post Could you be personally liable for your company taxes? appeared first on Fortuous .

Could you be personally liable for your company taxes?

Thu, 06 Oct 2022 12:46:00 GMT

But, did you know that, under some circumstances, HM Revenue & Customs (HMRC) can transfer the liability for some unpaid taxes to you as an individual?.

What’s a Joint and Several Liability Notice?

The JSLN legislation covers liabilities in respect of periods ending on or after 22 July 2020, regardless of when those periods started.

Notices can be given to you in respect of:

How would being served a JSLN affect you?

Suddenly becoming personally liable for your company’s tax liabilities is never going to be good news. The impact of a JSLN can be significant.

Talk to us about any risks you may face around JSNLs

If a JSLN is issued, you should contact us immediately. You only have a window of 30 days to ask for a review of the decision to issue the JSLN, or to appeal against it.

We’ll be happy to talk through your situation and help you communicate with HMRC.

The post Could you be personally liable for your company taxes? appeared first on Fortuous .

Tax planning in uncertain times – why we need to talk about tax

Mon, 03 Oct 2022 12:42:00 GMT

When the goalposts keep moving so frequently, it can be confusing:

To keep on the ball, it’s important to talk to us regularly about your tax requirements, your understanding of the latest changes and the underlying goals for your business.

The need for regular tax-planning conversations

In these tax planning sessions, we can:

Talk to us about booking in a tax-planning session

We’ll always do our utmost to help you plan out your tax liabilities and keep the business in a positive cashflow position. That’s why regular tax-planning sessions are so important.

Book a tax-planning conversation with us and let’s start improving your strategy.

The post Tax planning in uncertain times – why we need to talk about tax appeared first on Fortuous .

Grow your numbers – Activities and KPIs

Tue, 20 Sep 2022 08:55:00 GMT

What on earth is a KPI and why are KPIs important to your business? A KPI (Key Performance Indicator) is a result that can be used to measure the effectiveness of different activities in your business.

Put another way, if you want to define what success looks like from your business activities, employees, or projects, you need a way to measure success. The best way to illustrate this is with examples of activities and appropriate KPIs.

For customer or networking events, KPIs could include:
Customer retention percentage >95%
Number of leads generated >15 per month
Number of proposals requested >10 per month

For the maintenance of an ordering system, a KPI could be:
Stock turn by product > 6 times per annum

On website management, KPIs could include:
Number of new leads generated >15 per month
Online sales made per month >$1500

For the management of debtors, KPIs could include:
Average debtor days <45
Percentage of clients outside normal trade terms <10%

On the management of a referral programme a KPI could be:
The generation of 10 internal and 5 external leads per month.

Managing waste or rework could include the following KPIs:
Gross margin by product >50%
Number of jobs completed within budget >80%

KPIs for the management and training of a sales team could include:
Proposal conversion rate >75%
Labour sales by salesperson >300% of salary

KPIs provide a clear expectation of performance around activities and tasks. The tasks your team perform should be recorded in individual Job Descriptions with corresponding KPIs.

If you discuss and set KPIs with your team members, you’ll get a much higher level of buy in. Your team will know what the definition of a great day’s work is for them – essentially achieving their KPIs.

KPIs don’t have to be complex, but every team member (including you) needs to know what their five most important KPIs are, and how to measure them.

Need help? Talk to us about how to define a great day’s work for everyone in your business.

The post Grow your numbers – Activities and KPIs appeared first on Fortuous .

Grow your numbers – Reporting and accountability

Tue, 20 Sep 2022 08:38:00 GMT

Key Performance Indicators (KPIs) are essential to measure the performance of your business in order to grow your numbers. Of course, the measures themselves are pointless unless there’s reflection and discussion to ensure they’re met. Here’s a simple and effective way to link KPIs to a reporting and accountability framework.

Firstly, make sure there is ONE leader for each of the departments in your business: Director, Leadership, Product / Service Development, Operations, Marketing, Sales, Finance, HR, and Admin / IT. One person can lead more than one department, but two people can’t lead one department. You can also contract out departments to avoid needing a large head count of team memebrs (finance, marketing and IT can be outsourced relatively easily).

Be clear on who reports to who. One person can only manage 5 or so people effectively. Consider establishing teams with team leaders to enable you to achieve a ratio under 6 to 1.

Set up regular department meetings. This may be the CEO with each of the other department heads, the Operations Leader with the Operations team (if less than 5 in the Operations team) or with the Operations Team Leaders (if more than 5 in the Operations team).

Set an agenda for each meeting:

Have team members report one working day PRIOR to each meeting, using the reports and KPIs you established as part of their Job Description.

Most importantly, make sure the meeting is limited to 15 minutes and in a stand-up format so it doesn’t run over time.

Contact us if you’d like a simple weekly reporting format to use.

The post Grow your numbers – Reporting and accountability appeared first on Fortuous .

Defining a great day’s work

Tue, 20 Sep 2022 08:31:00 GMT

We all have those days when we leave work feeling like we haven’t achieved anything that day. Then there are the days when you absolutely nail your work and feel like you’ve accomplished everything.

While we can’t eliminate those bad days completely, we can apply principles to limit the number of bad days and ensure we achieve a great day’s work more often.

So, how can we create a work environment where more members of our team are nailing it each day?

1. Love what you do and stop doing what you don’t love.
You have choices in life and you’re not a victim. Which tasks do you loathe and keep putting off until the last minute? Who could do these tasks for you? Delegate, delegate, delegate. Find someone who enjoys those tasks – they’ll do a better job of them!

2. Set clear business goals and share them with your team regularly.
Nobody likes to fly blind. Sharing your goals with your team lets them align their own goals with your business goals and identify how they fit into the big picture for the business.

3. Develop Core Values.
A clear set of Core Values is the foundation for a great culture. When your team lives into your Core Values, you’re more likely to achieve your goals. Celebrate instances of your team members living into your Core Values at each team meeting.

4. Empower your team to do more.
Set targets and expectations and allow your team to come up with the best way to achieve them. Provide guidance and support where required, and celebrate the team’s success.

5. Set and measure KPIs.
KPIs measure how well you’re tracking towards your goals. These help the team to define what a great day’s work is for them. Achieving their KPIs lets them know they’re on track and have achieved a great day’s work. Measuring the right things helps create a positive mindset shift and helps to break bad habits.

If you need help delegating tasks, setting goals for your business, developing Core Values, empowering your team, or setting and measuring KPIs, get in touch. These are all things we can help you with.

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How much time should you spend on strategy?

Tue, 13 Sep 2022 13:35:00 GMT

We see many business owners, who work tirelessly in their businesses and are excellent at what they do, neglect their strategy and execution plans. It’s the old adage: I’m too business working in my business to work on it.

Whilst we’re here to support you when unexpected hiccups occur, we can do so more effectively if we help you get ahead of risks and opportunities in your business.

Time spent working – is not created equal.
There’s a misconception that being busy is automatically being effective.

Some hours are highly productive… which is great… provided we’re being productive on the right things, i.e. not fighting avoidable fires, dealing with HR issues or performing avoidable rework (etc. etc.).

Planning helps us put out fires before they cause damage while capitalising on the opportunities that we can only see when we look up. In other words, sharpening the axe before cutting the tree will make for a much easier task. Cutting the right tree helps too.

Time spent refining your strategy and planning your execution will pay back massively when you execute your plans operationally in your business. Popping up for regular planning helps keep your business calibrated.

So, how much time should you spend finetuning your strategy and execution?
We believe best practice for business starts with us providing a 60-minute complimentary meeting.

Then, we can support you to create your annual Business Plan and undertake annual forecasting – two critical services to capture and support the achievement of effective and realistic goals.

Lastly, we recommend ongoing check-ins with us (at least quarterly) to report back and ensure accountability across achieving your 90-day goals and actions, as well as to recalibrate and set new ones. These recurring services are highly effective for our business clients.

This commitment is roughly a total of 20 hours per year (including travel, if any) or just 1% of your working time, assuming the average business owner works 2,000 hours a year in their business.

So, where will you find the time?
Planning supports efficiency. Efficiency might come in the form of less rework, less ‘paperwork’, less friction in your team, or simply more focus and higher productivity.

Putting the time in upfront for planning and strategy will give you time back and improve your bottom line in the future. It’s also about helping you define what you want from your business in general. More time with family? More time for golf? A broader product offering? To learn life-long lessons that pay off in all facets of your life? To pump business value up for your succession?

It’s not easy work. It’s challenging… and enlightening, passion-igniting, and rewarding (for both us and our clients). We’re committed to supporting our clients to make their businesses more sustainable and scalable.

Get in touch if you’d like a 60-minute complimentary meeting.

The post How much time should you spend on strategy? appeared first on Fortuous .

Do you feel like a slave to your business?

Mon, 12 Sep 2022 09:13:00 GMT

Feeling like a slave to your business implies the loss of control; thinking that you need to be available to your customers 24/7 and that your team can’t cope without you. It can also imply a victim mentality – that this is just what it’s like to be a business owner and that it’s not something you can change. Maybe Covid had a huge impact on your business and you’re playing catch up.

There are lots of reasons why you feel like a slave to your business. In other words, lots of excuses. The OARBED behaviour model tells us we must act above the line; taking Ownership, Accountability and Responsibility for our actions and the choices we make. Feeling like a slave to your business is a choice.

So, what can you do to stop feeling this way? How can you get back in control of your business?

First, review and update your processes. If customers are contacting you at all hours, put in place a timeframe for responding, e.g. within 24 hour hours, and communicate this with your customers. If cashflow is an issue, review your payment terms and ensure they’re being enforced.

Next, if you don’t feel like you can trust your team to run your business without you, establish why this is. Do they need more training and support? Have you given them the opportunity to step up and take on more responsibility? Do you need to take on more team members or outsource some tasks?

Whatever your reasons – or excuses – are for feeling like a slave to your business, now is the time to reflect on what it is you wanted your business to deliver to you.

Set goals for what you want your business and personal life to look like in 12 months. Break these down into 90 day goals and actions to achieve those goals. Take ownership, accountability and responsibility for regaining control of your business.

Consider the following questions:

No more excuses – it’s your business, you make the rules, choose not to be a slave!

Need accountability coaching? We can help you be the master of your business.

The post Do you feel like a slave to your business? appeared first on Fortuous .

The Five A’s of Change – achieving continuous improvement

Fri, 09 Sep 2022 13:31:00 GMT

We’ve spent more than the past year responding to things outside of our control. Everyone has experienced huge change, a lot of it while in crisis mode. Upon reflection, some of the changes were inevitable. If we think about digital transformation and flexible working conditions, these were simply accelerated by Covid.

Now that the worst has (hopefully) passed, it’s important to pause and reflect on the changes you’ve made to your business. The process of change itself is a powerful tool we can use far beyond the Covid crisis, to improve our planning and resilience. It’s likely there are other opportunities (or changes) that exist to help you future proof your business.

Consciously recognising the process required to change can vastly improve your outcomes.

The Five A’s of Change breaks it down simply:

1. Awareness.
First, we need awareness of what needs to change. What changes should you prioritise now you have some control back? How can you reflect these in your business plan?

2. Acceptance.
We have to accept that change is a continuous process. It’s likely you’re craving some stability; however progress requires change. Change is a lot more positive when it’s a result of proactive (not reactive) thinking.

3. Action.
Once we have a plan, we must actually implement it. Now that you’re out of crisis mode, you can take it one step at a time; the momentum for change will grow. Without action, planning is pointless.

4. Accountability.
Having someone independent to hold us to account is typically a fool proof way to ensure we act. A bit like going to the gym before work… we’re more likely to show up if we’ve committed to a friend or paid for a personal trainer.

5. Acknowledgement.
Acknowledge the change you’ve been through and the way you responded to Covid-19 and lockdown. We all did the best we could with the knowledge we had at the time. Celebrate the success of taking action and forcing change; it helps reinforce good behaviour.

This powerful model is simple and effective. Consider the things in your business that you would like to change and what stage in this process you’re at. What is your next step? Whatever your current situation, empower yourself and make a commitment to real change.

Need help making change stick? Contact us to find out how we can help you with planning and accountability.

The post The Five A’s of Change – achieving continuous improvement appeared first on Fortuous .

Understanding Your Balance Sheet

Sat, 30 Jul 2022 14:57:00 GMT

To understand the financial position of a business at a specific point of time, look at the balance sheet. The balance sheet may also be called the statement of financial position. Together with the Profit and Loss Statement, and possibly other reports such as the Statement of Cash-flow, these reports provide a complete understanding of the financial position and business performance.

So what’s involved? – The balance sheet has three sections: assets, liabilities and equity.

What are Assets?

Assets are things and resources that a company owns. They have current and/or future value and can be measured in currency.

Assets may be subdivided on the balance sheet into bank accounts, current assets, (receivable within one year), fixed assets, inventory, non-current (or long term) assets, intangible assets and prepayments.

These include banks and other financial accounts held, accounts receivable (trade debtors), supplier deposits or bonds, stock on hand, property, equipment, vehicles, investments and intellectual property. All of these can be translated into monetary value.

What are Liabilities?

Liabilities are amounts owed to suppliers and other creditors for goods or services already received. Liabilities may also include amounts received in advance for future services yet to be provided by the business.

Liabilities are generally subdivided into current, (payable within one year), and non-current liabilities.

These include accounts payable (trade creditors), payroll obligations (salaries, taxes, superannuation), interest, customer deposits received, warranties and loans.

What is Equity?

Equity includes owner funds contributed, drawings, retained earnings and stocks. The value of the equity equals assets minus liabilities.

Transactions that affect profit and loss accounts also affect balance sheet accounts. For example, providing a service increases the accounts receivable balance, which therefore increases the equity.

The Balance Sheet Equation

The balance sheet must always balance! Asset value = liabilities + equity.

For example, if you buy a new vehicle for the business at say $50,000, having paid a $10,000 deposit and taking out a $40,000 loan, the value of fixed assets increases by $50k, but the bank asset value decreases by the $10k deposit paid. The value of liabilities increases by $40k loan, thus leaving the balance sheet balanced on both sides of the equation.

The balance sheet equation shows you how much money you would have left over if you paid all your bills and debts and sold all your assets at a given date. This amount is the Owner’s Equity.

Note that the balance sheet equity total is not necessarily how much the business is worth at market value. Assets are listed on the balance sheet at their transaction value, which may be very different from the market value. Some assets may be worth more, and others may depreciate in value. Business value is calculated not just on the balance sheet figures but many other factors.

Need more information?

Talk to us. Get the complete picture of your business performance and financial position, regardless of what stage of business you are at.

The post Understanding Your Balance Sheet appeared first on Fortuous .

We would love to work together to help ensure you get paid faster

Thu, 28 Jul 2022 14:20:00 GMT

Your feedback at our Getting Paid webinar was great, thanks for that.

How are you going with your three actions to get paid faster? If you need help developing systems and processes to ensure you get paid as fast as possible, we’re always here to help. Having someone independent to hold you to account does work.

Let me know if there’s anything we can help you with.

The post We would love to work together to help ensure you get paid faster appeared first on Fortuous .

Keeping your business cash liquid – the difference between cashflow and profit

Tue, 26 Jul 2022 13:15:00 GMT

The foundational goal of any business is to make a profit. As a business owner, that’s one of your key financial aims – to make enough sales, at a big enough margin, to generate profit from your enterprise. But how does profit differ from cashflow? And why is cash king?

How do profit and cashflow differ?

To really understand the difference between generating profit and managing cashflow, we need to look at what both these terms mean. You might think that delving into the accounts is a job for your adviser, but being in control of your profit and cashflow is an invaluable business skill.

Let’s take a look at the differences:

Why is positive cashflow so important?

‘Cash is king!’ may be a cliche these days, but it’s a maxim which underpins any successful business model. Yes, it’s great to make a profit at year-end, but if you don’t look after your cashflow then the business may not survive as long as the end of the year.

What’s needed is good cashflow management to enhance your financial health. And without a careful eye on your cash numbers, things can quickly go awry.

A business can generate high revenues and big profits, but still be cashflow poor. In other words, it can have profits at the end of the period, but have very little liquid cash to fund it’s day-to-day operations over the course of the period.

Talk to us about improving your cashflow management

Good cashflow management is all about being in control of your cash inflows (income you’re generating) and your cash outflows (what you’re spending). To achieve ‘positive cashflow’ you need to proactively work to keep your inflows higher than your outflows.

As your adviser, we’ll help you set up detailed cashflow reporting and forecasting, so you can keep the business in that ideal positive cashflow position. And we’ll also look at key steps for keeping your revenues high, margins profitable and meeting your financial targets.

Get in touch to talk through your cashflow management.

The post Keeping your business cash liquid – the difference between cashflow and profit appeared first on Fortuous .

Should you move your rental properties into a limited company?

Sun, 24 Jul 2022 15:01:00 GMT

One possible approach is to put your residential properties into a limited company, creating a company structure that can be used to manage your property income.

We’ve highlighted the main steps to setting up a limited company and the key tax implications.

Thinking through the structural options

Putting your rental properties into a limited company is a move that requires plenty of thought – both around the structural options and the associated taxation issues.

Structurally, you have four main options to consider:

Each of these four options has its own pros and cons.

For example:

Knowing the tax implications of your property investment

These are the main taxes to be aware of:

Talk to us about your property tax planning

Each case should be examined differently, taking into account things such as:

Putting your property portfolio into a PropCo is a specialist area and something where you should get bespoke advice from a property expert.

Get in touch to talk about tax planning for your property investments.

The post Should you move your rental properties into a limited company? appeared first on Fortuous .

Why you should have a business continuity plan

Fri, 22 Jul 2022 14:51:00 GMT

Keeping your business operational is a full-time job. It’s a balancing act that requires you to keep a multitude of plates spinning, while your executive team and employees support you at every stage of the operational journey. But what happens if these plates stop spinning?

Sudden unexpected threats can catch you on the hop. What if an unexpected circumstance comes up that derails your usual operational procedures? How will you cope? What will you do to overcome the issue? And how will you get the business back on target?

The answer lies in having a thorough business continuity plan.

What’s a business continuity plan?

A business continuity plan is an executive plan that describes the risks that exist in the business, your strategy for dealing with these known and unknown risks, and how you will mobilise your team to overcome any issues, emergencies or gaps in trading etc.

None of us truly knows what lies around the corner. Most businesses were not expecting the 2008 economic crash, or the 2020 Covid-19 pandemic. If you can plan ahead and put contingency plans in place, you’ll be better prepared when a worst-case scenario does appear.

How do you formulate your plan?

Every organisation’s business continuity plan will be different. We all have different business models, different company hierarchies and different risks that are peculiar to our own sectors.

But the fundamental basis on which you create your business continuity plan will be the same however your company works.

For example:

Talk to us about building a business continuity plan

No plan can completely remove the threat of the unknown – that’s an impossibility. But with a continuity plan that’s well-conceived and ready to implement, you reduce the potential risks and give you and your team a practical strategy and tactics to work with.

Need to get a plan in place?

We’ll help you analyse your business model, look for the critical areas and assess the potential risks. We’ll also help you put together a watertight business continuity plan that’s ready to implement if (and when) specific threats hit the business.

The post Why you should have a business continuity plan appeared first on Fortuous .

How to coax your people back to the office

Wed, 20 Jul 2022 13:58:00 GMT

Globally, our relationship with work and the workplace has changed.

People got used to working from home (WFH) during the pandemic lockdowns and enjoyed the freedom it offered. In fact, 61% of people working from home are doing so because they want to, even though their office is open, according to a recent survey. But we also need to balance this new WFH ethic with the more sociable aspects of collaborating together at HQ. What’s needed is a switch to hybrid working, with some time in the office and some time WFH.

So, how do you coax your people back into the office and highlight the benefits of sometimes working in one main workspace?

What turned people off of the office?

The Covid-19 pandemic came along and shook up the work dynamic in a big way. We’d had cloud technology and remote working available for some time. But the pandemic acted as a catalyst for pushing remote working as a viable, everyday work option.

This allowed us all to work. But it also had other repercussions too:

So, how do you entice our people back from their suburban homes and into your office?

Coaxing your workforce back to HQ

People have got very used to working from their kitchen table. So, if you want your team to return to the office, you’ve got to deliver a workspace that offers something more. Working from the office has to appear like a positive benefit, rather than the poorer cousin of WFH.

Creating a more welcoming environment with added amenity and flexibility will also stand you apart in a tight labour market.

Here are five ideas to try:

The post How to coax your people back to the office appeared first on Fortuous .

Should I get an electric car?

Mon, 18 Jul 2022 15:51:00 GMT

Having a company car used to be seen as a considerable perk. But in recent years it’s become less clear whether having a conventionally powered company car as part of your income mix is a good idea – both from a tax perspective and from a sustainability angle.

The good news is that electric vehicles (EVs) are now more readily available. And choosing an EV as a company car may well be a great idea from both an eco and tax perspective.

A greener choice of car?

Having an EV as your company is a more eco-friendly choice in many ways. An EV has zero tailpipe emissions, produces less noise pollution and can be cheaper to run.

There are arguments over the green credentials of EVs , as lithium batteries will eventually need replacing and electrical power to charge the batteries currently still relies heavily on carbon-based power stations. But as technology, battery recycling and the use of renewable energy increases, having an EV as a company car will certainly help you do your bit for lowering carbon emissions.

Taxing a company car

When you tax a company car, there are two tax areas to consider:

Both of these are tipped in your favour when comparing the rules for EVs compared with conventionally powered internal combustion engine vehicles (ICEVs).

Tax allowances for EVs

For the company, 100% first-year allowances can be claimed on the purchase of an EV, provided that it’s new and unused. Any charging point you install at the business for your EV will also qualify for the super-deduction of 130% of the cost, which is certainly a good incentive.

Compare this to the company buying an ICEV. No first-year allowances are available but annual writing down allowances of 6% (18% if emissions < 50g/km) can be claimed instead.

As the driver of the vehicle, your benefit in kind (BIK) is calculated at 2% of the vehicle’s list price for the current tax year. ICEV rates are far higher, ranging up to 37%, depending on emissions. In the most common band the BIK is around 28%. If your fuel is provided, as an EV driver, you pay no additional tax, whereas an ICEV driver pays tax on an additional amount calculated by multiplying the vehicle BIK rate by £25,300.

Is now the time to switch to an EV?

If you’ve previously dismissed the idea of a company car because of the complex and expensive tax regime, now may be the time for a rethink.

Opting for an EV is currently a tax-efficient option and there are still incentives for both companies and individuals to explore the EV route. Going electric is a more sustainable option than a petrol-guzzling ICEV and you may well save on running costs as well.

Talk to us about the tax implications of an EV

If you’re thinking about getting an EV as a company car, come and talk to us. We’ll help you calculate the tax impact for both the company and driver, and can explain the relevant capital allowances that can be claimed when purchasing an EV for the company.

The post Should I get an electric car? appeared first on Fortuous .

5 quicks wins for a greener business

Sat, 16 Jul 2022 13:48:00 GMT

Consumers are driving the trend towards sustainable business practices, voting with their dollars to support greener companies. The Global Sustainability Study 2021 found that:

“ Consumers send a clear signal: sustainability will continue to become the expectation, rather than the exception ,” notes the study. “ Companies must transform their businesses now in order to stay relevant for the future .”

Transforming your business might ultimately require investing in new systems, packaging or products. But in the meantime, here are 5 quick wins to help set you on the right path.

1. Reduce plastic waste

Is your business still buying single-use plastics? Whether it’s pallet wrap, disposable cups or those coffee pods, there’s a quick and easy sustainable swap that you can make right now.

2. Recycle your old electronics

Old printers, phones and laptops can often be found lying around the office – along with a huge tangle of cables. Tidy up your space and help the environment by finding your local e-cycling centre and making the best of your outdated electronics.

3. Offset your carbon footprint

You can use an online calculator to estimate your business’s carbon emissions, then buy carbon credits to the same value to offset your emissions.

4. Use less paper

Embrace digital technology to cut your use of paper; switch to an electronic signing service so you no longer need to print and scan contracts or financial documents. If you must print something out, use both sides of the paper for internal documents. Buy recycled paper and recycle the paper waste your business creates.

5. Choose sustainable client gifts

Instead of sending hampers, consider a charitable donation – you could let the client choose from a list to get them engaged. Or send a potted plant, adopt an endangered animal, or pick an eco-friendly gift basket.

For more ideas, we can help

If you’re looking for more significant ways to invest in a greener business, we can help. Get in touch, we’d love to talk to you about sustainability in your industry and how to get the most out of every dollar you invest.

The post 5 quicks wins for a greener business appeared first on Fortuous .

Keeping your data safe as a remote worker

Thu, 14 Jul 2022 15:42:00 GMT

Using public WiFi in cafes, hotels and coffee shops is something we all do. It’s convenient and gives you the benefits of working online wherever you happen to be. But are you aware of the data security issues of working from a public network?

In an age where remote and hybrid working are now the norm for so many employees and self-employed people, it’s important to know the key ways to keep your data safe

Secure ways to work from a public network

Remote working is a flexible approach to work that’s increased in popularity hugely over the past few years. A recent study from Buffer found that 97% of people would like to continue working remotely, at least some of the time, for the rest of their career.

Working remotely is here to stay, it would seem. But what can you do to make sure you’re applying the best possible security protocols? And what are the key dangers to look out for?

We’ve highlighted the important elements of cyber safety to be aware of:

Start improving your internet security

We’ve all enjoyed the additional flexibility and time-saving benefits of working from somewhere other than the office. But as remote working becomes a standard working practice, it’s vital to improve your internet security and be more aware of the potential threats to your data.

The post Keeping your data safe as a remote worker appeared first on Fortuous .

Improve your debtor days to boost your cashflow

Tue, 12 Jul 2022 14:29:00 GMT

It’s important to stay on top of your debt collection to free up cash. Establishing how long it takes you to get paid is the first step, but how can you measure this?

Debtor days measures, on average, how long your customers take to pay you. While there are many complex formulas to accurately calculate this, a nice easy formula is: current debtors owing / annual sales * 365.

For example, if you have annual sales of £450,000 and debtors owing of £80,000, your debtor days are 65 (£80,000 / £450,000 * 365). If, in this example, your payment terms specify payment is expected within 14 days, then you have a real problem and your cash is locked up in your debtors much longer than it should be.

Reducing your debtor days will immediately free up cash. So, how can you reduce your debtor days?

To see the impact of reducing your debtor days, even by only 1 day, simply divide your annual sales by 365 to establish your daily sales level. You can then use this figure to calculate the impact or reducing your debtor days by different amounts.

To demonstrate with the above example, if you reduced your debtor days from 65 to 40 – still well beyond your payment terms – you’d have over £30,000 more cash ((65-40) / 365 * £450,000 = £30,822).

Don’t let your customers treat you as their bank! Ensure you’re getting paid as soon as possible. Get in touch to find out how we can help you reduce your debtor days, so you have more cash available in your business!

The post Improve your debtor days to boost your cashflow appeared first on Fortuous .

Business tips: Have you achieved your goal for the business?

Sun, 10 Jul 2022 13:23:00 GMT

Founding, managing and growing a business is a BIG commitment. For most business owners, it will take years to build a customer following, turn a profit and create a truly scalable business. It’s a journey that can sometimes be pressurised, stressful and risky. – But when your plan really does come together, there is the chance of real success, a lasting legacy and a business that delivers on your initial dream.

So, how do you know when you’ve truly achieved your goals for the business?

Has the business met its growth targets and scaled up as intended?

You’ll have seen your business idea grow from being a fledgling startup, to an established business and on to become a scaled-up, ambitious enterprise with a solid customer base.

If you’ve met these growth targets, then you know you’re on pretty solid ground as a business. Your idea clearly has legs and you’re delivering a product and/or service that your customers see as valuable – and which they’re willing to part with their hard-earned cash to purchase.

Are you running a profitable enterprise that’s in good financial shape?

Running a tight financial ship is crucial. You need solid revenues, positive cashflow and good liquidity to keep your business ticking over.

In the early days of being a startup, cash will have been tight. And your own personal income as a founder and director will probably have been scarce too. But as the business has become more established, you should have found that your business revenue became more stable and predictable – and that your own personal wealth also followed this same reliable pattern. If the business has a solid balance sheet, great cashflow and meets your intended profit targets, you’re onto a good thing – and can be sure that your financial position is in good shape.

Do you have a stable customer base who say good things about you?

Without customers, you don’t have a viable business. Finding your first customers as a startup was probably a significant turning point in your journey. A good customer base brings with it the bonus of new sales, fresh revenues and a business that can actually turn a profit.

When customers engage with you and buy your goods and services, that comfirms your original faith in your business idea. You’re providing something they value and want to purchase, and you’re also building a community of like-minded people who all think your brand is great.

Do you have a team who can operate the business without you?

In the early days, you’ll probably have become a jack (or jill) or all trades. You’ll have run the sales and marketing campaigns, taken care of all the main operational tasks and dealt with the many invoicing, accounting and bookkeeping tasks. Turn the clock forward, and you probably have a team of people around you to take care of these jobs – but could they function with you?

This is really the acid test of whether you’ve scaled and succeeded. If the business is still reliant on you, personally, you have a problem. To be a saleable proposition, a business needs to function effectively without the founder. If not, you’ll never be in a position to sell up. To make this possible, you need a team of engaged and talented people around you – people who share your vision and talents and who can keep the ship on an even course, even once the original captain has set sail on fresh, new adventures.

Do you feel you’ve achieved what you wanted to achieve?

In your formative years as a founder, you’ll have sat down to draw up a startup plan. In that plan you’ll have outlined a clear vision for what this business was going to achieve.

This vision might have been:

We all have different goals, and whether they are financial, personal or moral comes down to the individual. The important thing at this point is to assess whether you’ve actually met the vision that you set out to achieve. If your aim was to sell for a profit and then retire, are you ready to do this? If the goal was to become a household name and move your sector forward, do your customer engagement figures and market share stats reflect this?

Deep down, only you and your fellow founders know whether you’ve truly met your intended goal. But if the general consensus is that you aced it, then it’s time to think about the future.

What’s the next chapter in your business story?

If you can answer yes to all five of these questions, then congratulations! You’ve built a successful, stable and profitable business.

But what do you do now? Do you continue to plough this fertile furrow and live off the profits? Do you find a buyer for the existing business and start on your next business idea? Or do you sell up and look at retirement and enjoying the benefits of your money and lifestyle?

It’s a good idea to talk to us before you make what is, essentially, a life-changing decision. If you’d like to talk through your options, do get in touch.

The post Business tips: Have you achieved your goal for the business? appeared first on Fortuous .

Business tips: Trading in a different country

Fri, 08 Jul 2022 07:44:00 GMT

To successfully set up your export business, you’ll need to do your research. This means talking to your accountant, advisers and other business owners in your network so you don’t enter the market without enough preparation. With the right planning and organisation, you set the best possible foundations for moving into a brand-new international market.

Create an export plan

When you take the big step of going international, having a plan is going to help immeasurably. Writing an export plan gives you a route map to follow and helps to explain to investors, funding providers and your existing home team WHY you’re looking to expand out into a new country.

As a starting point:

Check if you need an export licence

It’s possible that you’ll need an export licence in your home country to trade over country borders. This will depend on what goods you’re exporting, whether they are on any controlled lists and whether there’s an existing trade agreement with your target county.

Free trade agreements (FTAs) may exist between your home country and your export country, reducing or removing some of the regulatory hurdles required to trade between those two territories.

Understand your Tax liability

According to the OECD, 170 countries and territories have some form of Value-Added Tax (VAT) or Goods and Services Tax (GST). These consumption taxes are added to non-essential goods and are paid by the consumer as part of the price they pay at the till.

Knowing whether you’ll need to charge and pay VAT/GST in your new territory is an important consideration. Countries will charge VAT/GST at different rates, on different goods and services. So, it’s important to talk to a specialist who can advise you on how to deal with VAT/GST when trading across borders in your new country.

Move to multi-currency accounting software

If you’ve only traded in your home nation, your finances will have been managed in a single currency up to this point. Unless you’re operating in a trading block with one standard currency (like the EU), the likelihood is that your new export location will use a different currency.

Whether your new location trades in US dollars, euros or Japanese yen, your accounting software needs to be able to deal with transactions in your home currency and your new international currency. Most of the major cloud accounting platforms will offer a multi-currency subscription, giving you the ability to account in multiple currency types.

Find the best way to get paid in a new currency

When you make your first sales in your international territory, you’ll also need a way to take payment in this new currency. With cashless card transactions now so common in many parts of the world, this is less of an issue than it used to be. However, you will need a bank account that uses your new currency and some means of converting funds into your home currency.

International bank accounts with foreign exchange (forex) capabilities make this easier. Providers like Wise Business, OFX or Revolut, give you the option to collect payments in one currency and then export it in your home currency. This makes the forex process much simpler and also much more cost-effective, with rates usually far lower than those your high-street bank would charge for forex transactions.

Market your brand to a new audience

A key step will be marketing your brand to consumers in this new country, or finding other businesses to sell to directly. Remember, you’re starting from scratch when it comes to brand awareness and advocacy, so it’s important to do as much research as possible.

Questions to ask include:

Remember to also check on cultural sensitivities in your new country. Do you understand the cultural, social and religious differences between your home nation and your new territory? Using the wrong words, phrases or colours in your marketing could be disastrous, so learn as much as possible about your new country and get to know the local traditions.

Going international is a significant step for your business. We can help you draw up an export plan and get your tax and accounting ready for operating in a new territory.

Talk to us about writing your export plan.

The post Business tips: Trading in a different country appeared first on Fortuous .

Remuneration strategy – Salary vs Dividends

Wed, 06 Jul 2022 06:34:00 GMT

As an owner-manager, your chief concern will be making your business profitable and building up cash reserves in the company. But you’ll also want to be able to extract funds from the business too – whether this is via a regular monthly salary, or ad-hoc dividend payments.

Salary vs dividends is the most common split, but there are a number of different ways of extracting funds from your business, all of which can have different tax and capital impacts – both for you personally and for the company as a whole.

Because of this, it’s important to have a clear and workable remuneration strategy – which clearly sets out how and when you will be able to take funds out of the company.

Building a tax-efficient remuneration strategy

Once your business is financially stable, you’ll no doubt have thought about how to take income from the company, particularly how to split income between salary and dividends.

So, what are the main considerations when creating a remuneration strategy?:

Talk to us about your remuneration strategy

In most cases, there’s no shortcut to crunching the numbers when it comes to creating a robust remuneration strategy. It requires an excellent understanding of both company and personal tax, and a good knowledge of the complex (and sometimes opposing) effects that company and personal taxes can have on each other.

We’ll help you to review your business and private wealth situations and generate a remuneration strategy that’s tax-efficient, straightforward and well-suited to your cash needs.

Get in touch to talk through your remuneration plans.

The post Remuneration strategy – Salary vs Dividends appeared first on Fortuous .

Our Cashflow & Profit Improvement Meeting

Mon, 04 Jul 2022 14:24:00 GMT

In business, it’s not enough just to have a healthy profit; profitable businesses can fail due to poor cashflow. We want to help our clients better manage their cashflow.

The first step is to determine your business’s Cash Conversion Cycle. This tells you how long your cash is tied up in your inventory, debtors, and payables. The longer your Cash Conversion Cycle, the less money you have available in your bank account. We’ll then help you identify 1-2 strategies you can implement to shorten your cycle so you have more cash in your bank.

Of course, profit matters too, and increasing your profit can increase your cashflow. By implementing strategies to improve both your cashflow and your profit, you can set your business up for success.If you’re unsure of the difference between cashflow and profit and often wonder why there’s not as much money in your bank account as you expected, this meeting should be a priority.

During the Cashflow & Profit Improvement Meeting, we’ll:

The sooner you attend a Cashflow & Profit Improvement Meeting, the sooner you can start increasing your profit and cashflow and increase the money in your bank account.

By attending a Cashflow & Profit Improvement Meeting, you’ll:

We look forward to meeting with you to identify the cashflow and profit improvement opportunities in your business.

The post Our Cashflow & Profit Improvement Meeting appeared first on Fortuous .

Paying dividends the tax-efficient way

Sat, 02 Jul 2022 15:48:00 GMT

When your limited company makes a profit, you can choose to pay a percentage of that profit to your shareholders. This is known as a dividend payment and is one of the most common ways for directors and shareholders to extract cash from a successful business.

But did you know that the dividends you receive are taxed separately from other sources of income? Or that dividends have their own tax rate, and that this rate recently increased?

We’ll explain how dividends are paid and taxed – and how to do this tax-efficiently.

How do dividends work?

Dividends are the payments you receive on shares you hold in a company. This could be shares in your own company or shares you hold in a publicly listed one.

The company pays corporation tax (CT) on its profits and the amount left after that is potentially available for it to pay out to its shareholders. As a shareholder, this means you’ll receive a dividend payment, with the amount you’re paid decided by the company.

How will your dividend payments be taxed?

Although the company has already paid CT on its business profits, as a shareholder you must still pay tax on the personal income you’ve received in the form of dividend payments.

The process of taxing your dividends works like this:

Talk to us about dividend tax planning

To make sure you don’t lose out when receiving a dividend payment, it’s important to think about dividend tax planning as part of your ongoing tax strategy.

We’ll help you find the best mix of dividends and salary payments to extract funds from your company. This meets your compliance needs and also minimises the tax charged by HMRC.

Let’s sit down to run through your planned dividend income and check that you’re taking money out of the company in the most tax-effective manner.

Get in touch to talk about dividend tax planning.

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It’s time to submit your P11D forms

Thu, 30 Jun 2022 06:53:00 GMT

P11D submissions for the 2021/22 tax year are now due, together with payment of any associated National Insurance (NI) that’s due. The P11D form is used to report expenses or benefits that you’ve paid to your employees during the tax year.

You can complete the forms online or by post. There are penalties for late submission of the forms and for late payment of the associated National Insurance contributions (NICs).

Telling HMRC about employees’ expenses and benefits

If your employees (including directors) receive benefits in kind that aren’t processed and taxed through the normal payroll routines, they need to be provided with a P11D form by 6 July 2022.

By the same date, HMRC needs to be provided with copies of any P11D forms. You also need to provide a P11D(b) form that summarises the total benefits paid to all employees and showing any class 1A NICs that are payable. The P11D(b) covers all benefits, whether they’re taxed through payroll or not.

Because payment is irregular, it’s easy to overlook, so be sure to note down these deadlines on your to-do list:

Any unused Employers’ Allowance cannot be used against these contributions – the full amount calculated is payable.

Talk to us about submitting your P11Ds ASAP

If we administer your payroll, the P11D submissions will either have been made already or are scheduled to be made shortly. If you administer your own payroll, now’s the time to get these forms filled out and the relevant NICs paid to HMRC.

If you are unsure of the values to include on your P11Ds in respect of benefits in kind, get in touch and, where possible, we’ll help you to work out these numbers.

Get in touch to talk about your P11D submissions.

The post It’s time to submit your P11D forms appeared first on Fortuous .

Your Q3 2022 deadlines for the diary

Tue, 28 Jun 2022 06:47:00 GMT

We’re always here to keep you up to date with the latest accounting, tax and compliance deadlines. Here are the forthcoming deadlines and cut-off points for Q3 of 2022 to add to your diary.

Requirement to register for Making Tax Digital for VAT (MTD for VAT)

NOTE : If your company’s accounting period is longer than 12 months, the first tax payment deadline is normally 21 months and 1 day after your accounting period started, and the second one is 9 months and 1 day after your accounting period ends.

For example, a company with an accounting period running from 01/09/2020 to 31/12/2021 will pay the first tranche of corporation tax by 01/06/2022 and the balance by 01/10/2022.

If your profits are more than £1.5 million, then tax is payable quarterly with two payments before the end of your accounting period and two after. The first payment is normally six months and 13 days after the start of the period, with the others three-monthly from that point.

Some general deadlines to plan for:

Talk to us about hitting your deadlines

If we’re looking after your payroll and tax returns, we’ll be monitoring these dates and deadlines automatically – but don’t forget that you remain legally responsible for meeting all deadlines.

Keep an eye on all the upcoming deadlines and check the upcoming dates for all relevant activities. Pay particular attention to those where we don’t carry out the task for you.

Missing a compliance deadline can result in fines and penalties, so it’s good practice to keep everything well-organised and on time.

The post Your Q3 2022 deadlines for the diary appeared first on Fortuous .

Our Cashflow Forecast Service

Sun, 26 Jun 2022 15:34:00 GMT

Cash is the lifeblood of any business; even profitable businesses can fail because of poor cashflow. If you only ever prepare a Cashflow Forecast because the bank has requested one, it’s time to reframe your thinking.

Every business should undertake an annual Cashflow Forecast to aid their planning and decision-making. We want you to be proactive in managing your cashflow; not assuming you only need one if the bank asks for it. And if the bank’s asking for a Cashflow Forecast, it’s likely that you’re asking them for an overdraft extension or loan, which could indicate cashflow issues.

We can help you address these underlying issues. If you know how much money will be coming in and out of your business and when, you can confidently plan and execute desired growth and improvement strategies to achieve positive changes in your business.

Even if your business has positive cashflow, you should still prepare an annual Forecast. It can help you unlock a lot of cash just by making a few changes.

We don’t just prepare your Cashflow Forecast and send it to you. We’ll draft your Cashflow Forecast then meet with you to review it and discuss:

This ensures your Cashflow Forecast is as accurate as possible and that you understand how to read your forecast and plan for cash outflows.

By undertaking our Cashflow Forecast services, you’ll:

The sooner you understand your cashflow, the sooner you’ll be able to make better informed decisions and implement improvement strategies.

The post Our Cashflow Forecast Service appeared first on Fortuous .

Business tips: Using forecasting to help your decision-making

Fri, 24 Jun 2022 14:27:00 GMT

Producing regular management information is one way to help improve your business decision-making. But looking at historical numbers can only tell you so much.

In business, you want to know what the future holds. And to make truly informed decisions about your future strategy, it’s important to use forecasting tools to project your data forwards in time. By running projections, based on these historical numbers, and producing detailed forecasts, you can get the best possible view of the road ahead – that’s invaluable.

Run regular cashflow forecasts

Positive cashflow is vital to the short, medium and long-term success of your business. Without cash, you simply can’t operate the business efficiently. Running regular cashflow forecasts helps you overcome this challenge. With detailed projections of your future cashflow, you can spot the cash gaps that lie further down the road, and take action to fill these cashflow holes.

Income can often be unpredictable, especially in challenging economic times. If customers fail to pay an invoice, or suppliers increase their prices, this can all start to eat into your available cash. Using forecasting, you can extrapolate your numbers forward to which weeks, months or quarters are looking financially tight. And with enough prior warning, there’s plenty of time to look for short-term funding facilities, or to get proactive with reducing your spending.

Run sales and revenue forecasts

Keeping the business profitable is one of the key foundations of making a success of your enterprise. You want your sales to be stable and your revenues predictable if you’re going to generate enough capital to fund your growth plans. And you need to know how those revenues will pan out over the course of the coming financial period.

Revenue forecasts work much like a cashflow forecast. Instead of looking at your future cash position, a revenue forecast gives a projection of your sales and how much revenue is likely to be brought into the business in future weeks and months. With better revenue information, you’ll be more on top of your profit targets. You can manage your working capital in a more practical way. And you can improve your ability to invest in new projects, additional staff or funding of the long-term expansion of your business.

Run different scenario plans

What’s going to happen to your business in the future? None of us have a crystal ball to predict this future path exactly. But by looking at different possible scenarios, you can run projections to see what the potential outcomes and impacts may be.

These ‘What-if scenarios’ can be exceptionally useful tools when thinking about big business decisions. What if there’s an economic recession? What if our sales increased by 25%? What if we raised our prices by 10% next quarter? What if we lost a quarter of our customers? By plugging the relevant data into your forecasting engine, you can run these scenarios and see how each option pans out. That’s massively useful when the worst (or the best) does happen.

Update your strategy, based on your forecasts

By making the most of your forecasting tools, you give your board, your finance team and your advisers the most insightful data and projections to work with.

A good business plan is designed to flex and evolve to meet the needs of the changing market – and the changing needs of your own business strategy. By making use of your cashflow forecasts, revenue projections and what-if scenario planning, you give yourself the insights needed to update your strategy and your business plan. You can make solid, well-informed decisions and keep yourself one step ahead of your competitors. In the dog-eat-dog world of business, that’s a competitive edge that can make a huge difference.

If you want to delve deeper into the positive benefits of forecasting, please do get in touch. We can showcase the latest forecasting software and apps, and show you the value that’s delivered through well-executed forecasting and longer-term projections.

The post Business tips: Using forecasting to help your decision-making appeared first on Fortuous .

Have you got a strategy for a financially stress-free holiday period?

Wed, 22 Jun 2022 13:19:00 GMT

Holiday breaks are a chance to recharge for the year ahead especially after the year we have had. We look forward to warmer weather and finally setting up an out-of-office email for the break. However, for business owners, this time is a stressful without careful cash-flow planning.

Even if you do continue to operate through the holiday season, your customers’ financial behaviour may not remain the same.

The strategies and tips shared below are generalised, however, we are here if you need to budget and prepare a cash-flow forecast. We can also help if you need assistance in applying for short term finance to get you through the break.

Why is cash-flow planning particularly important at this time of year?

Staff leave needs to be covered in addition to your normal fixed overheads like rent, creditors and tax compliance. The budget and forecasting process ensures you know your numbers and are prepared. If you are closing the doors for a bit, you won’t be driving revenue during this period and sales may take time to get started again in the new year.

Here are some simple strategies that can help

Need financial support?

If you can’t make ends meet, now is the time to organise short term financial relief. Please let us know if you need any help with cash-flow forecasting, budgeting or finance applications.

The post Have you got a strategy for a financially stress-free holiday period? appeared first on Fortuous .

Why are some expenses not allowed for tax?

Mon, 20 Jun 2022 13:56:00 GMT

As a business owner, you’ll be looking for every opportunity to claim back expenses and minimise your tax liability. But not everything that falls under expenses is tax-deductible.

To give you a better understanding of which costs are allowed and which are not allowed, we’ve highlighted the main areas where business owners habitually trip up with their expense claims.

How do you know if expenses are allowable?

The starting point for working out if expenses are (or are not) deductible for tax is the total costs shown in your company accounts. Take a look at your profit and loss (P&L) report in your accounts and you’ll see a list of all the expenses you’ve incurred over the period.

Once you have a list of your total costs, you can then follow the guidelines in the Government’s legislation to disallow some of these costs. At this point, you can also make any allowable deductions that weren’t included as costs in your standard accounts.

Which are the most common disallowed costs?

Disallowed costs are the expenses that can’t be claimed against tax. These disallowed costs fall into two main groups:

Where fixed assets such as a van, a computer or a piece of machinery is purchased, the accounts will include a depreciation charge each year. This is intended to spread the cost in the accounts over the life of the asset. Although these depreciation charges are shown as expenses in the accounts, they’re added back to profits (i.e. disallowed) when working out how much corporation tax is due.

There is specific legislation which, in many cases, allows an alternative deduction. An alternative deduction can be made via the:

How do you know if expenses were ‘for the purposes of trade’?

It’s fairly easy to identify capital expenses that must be excluded. But knowing if expenses were incurred ‘wholly and exclusively for the purposes of trade’ can be more difficult.

Where expenditure has been incurred for a dual purpose (business and non-business) the whole of the expenditure is disallowed. This is commonly where many business owners fall down when claiming for costs that are actually excluded.

Just to add to the complexity, some expenses that are not incurred for the purposes of trade are specifically allowable for tax purposes. These include redundancy costs, retraining costs and pre-trading expenses (but only those that would be deductible if incurred after trade started).

Talk to us about maximising your allowable expenses

It’s important to make sure your expenses are given the correct tax treatment. Making a mistake can result in you paying either too much tax or becoming liable for penalties.

As with all matters related to tax, the rules are complicated and often unclear. Working with an experienced tax adviser makes good sense and helps you get on top of your expense claims.

We’ll help you maximise the potential tax deductions by advising you on any grey areas.

Get in touch to talk through your allowable expenses.

The post Why are some expenses not allowed for tax? appeared first on Fortuous .

Looking for business funding? We can help

Sat, 18 Jun 2022 15:54:00 GMT

Top tips for successfully securing funding for your business

The key enabler for success for many startups and small businesses is securing funding. Even with the growing support around the world for investing in entrepreneurs, many businesses still struggle with the preparation required when applying for funding.

Here are our top tips:

Why is it best to involve a professional when applying for funding rather than doing it yourself?

The right professional will have experience in funding applications, will know what the funding provider is looking for, and also how best to present the information. And from the funding providers perspective, a qualified accountant on board proves the viability of the business idea.

Make the job easier with software tools

Utilising cloud accounting software gives you up-to-date data for investors, at your fingertips. Tools, such as Spotlight Reporting, allow you to tweak forecasts and scenarios to reflect different outcomes. These could include things like: what happens if we increase income from quarter two onwards? What happens if customers take sixty days to pay instead of thirty?

We can help ensure your data and reporting is correct and that you have everything you need when applying for funding.

The post Looking for business funding? We can help appeared first on Fortuous .

Business tips: Nurturing your customer relationships

Thu, 16 Jun 2022 14:52:00 GMT

The stability of your business isn’t just based on sound finances. Forming rock-solid foundations comes from having a solid customer base and building long-lasting relationships with your end users. To achieve this, you need to work hard on nurturing these relationships.

But how do you keep your customers happy and satisfied? And what are the best ways to build and maintain a trusted and beneficial relationship with everyone in your sales book?

Here are a few fundamentals for keeping those relationships sweet…

Great communication with your customers

Any good relationship is based on honest and open communication. So it’s important to have the best possible channels for two-way communication, feedback and promotion. Talking directly to customers, and allowing them to communicate with you, opens up a dialogue and gets a conversation started. And when customers are willing to have that conversation, you can be confident that they’ll be open to your marketing, emails and other points of contact.

Key ways to achieve this could include:

Ask for feedback and comments

For your products and/or services to improve, you need honest feedback from your customers. Ask for feedback on your delivery, your customer service, waiting times and prices etc. And, crucially, find out how you can do better. The root of any product development lies in knowing what your customers want, and how their needs are evolving. If you can gather those opinions and information from your end users, that’s invaluable data on which to base your decisions.

If you’re selling a physical product, ask the customer to answer a few quick questions when completing their warranty details online. If you’re selling a service, then follow up any project with a ‘How did we do?’ survey that asks for high-level feedback on their experience. The more you ask, the more you will know – and that knowledge really is power in the business world.

Keep customers in the loop with new developments

When you’re starting your next round of product development, stop for a moment and think about who this product is for. Ultimately, you’re designing and evolving something to meet the specific needs of a certain customer demographic. So, who better to ask about the direction of your updated product or service? Talk to the end user and ask them what they want.

As a business, it’s very easy to get lost in the internal, in-house viewpoint of your development. A new idea could result in what’s seen as an excellent new product feature – but have you asked the end user if they want this feature? Aiming for a positive customer experience (CX) and meeting your customers’ needs should ALWAYS be your core aim. So get your end users involved in the development process and your beta testing of products.

Reward your best customers with perks and benefits

We all like to know that our custom is valued. When you form an attachment to a brand, and give the company your hard-earned cash, you want to know that this is appreciated. One way to make your customers feel valued in this way is to offer them perks and benefits – something that only your long-term customers will have access to. This could mean:

The more you can do to make each and every customer feel special, the more chance you have of building a great relationship – and turning these people into advocates for your brand.

The post Business tips: Nurturing your customer relationships appeared first on Fortuous .

Hire purchase or lease rental: which is best for your business?

Tue, 14 Jun 2022 13:49:00 GMT

When setting up or growing your business, you’ll need access to new equipment, tools and vehicles. This usually means accessing finance to either buy or lease these new assets.

It’s easy to get confused between hire purchase (HP) and lease rental (LR). The names lenders use aren’t always helpful, and the tax and VAT treatments are very different.

To help you get a handle on these two very specific finance facilities, we’ve outlined the main differences between HP and LR, and how they’re both taxed.

What’s the difference between HP and LR?

Both of these approaches give you (the business) the ability to make use of the asset. The machinery or equipment will be there in your workshop, warehouse or office for your employees to use as part of your operational processes.

But there’s a big difference when it comes to the legal ownership of the asset:

How does buying or renting affect the tax you pay

But how does this affect the tax you save on the use of this particular bit of machinery, tech equipment or vehicle?

How can using HP or LR confuse the tax issue?

As we’ve seen, buying or renting can have very different tax implications. Where the confusion can arise is when the asset is financed through a particular finance facility. The finance agreement may be HP or LR, and it isn’t always clear which type is being used.

These are the main tax differences:

Does the business own the asset?

To qualify as an HP agreement, the agreement has to confer ownership. So, the question to look at when examining the finance is ‘Does the business own the asset?’.

Choosing the finance path that’s best for your cashflow

Knowing whether you’re entering into an HP or LR agreement is important for two reasons.

The timing of VAT claims and tax relief can have a significant effect on cashflow, so it’s important to make sure that you know whether you’re going down the HP or LR route – and that the correct treatment is followed by you and your tax advisers.

Helping you make the best finance decisions

If you’re thinking of acquiring an asset through finance, please do come and talk to us first. If you can provide us with the documentation, we’ll determine the correct VAT, corporation tax and accounting treatments to follow – saving you any worries further down the line.

Whether you’re purchasing a vehicle, equipment and other assets, talk to us about the impact of different options.

The post Hire purchase or lease rental: which is best for your business? appeared first on Fortuous .

Business tips: Finding the best routes to finance

Sun, 12 Jun 2022 14:47:00 GMT

Every business needs finance to get the initial enterprise off the ground. You may well have entered into finance arrangements to fund the initial stages of the business, taking out loans to purchase equipment, lease premises or take on staff.

But when was the last time you reviewed the arrangements or looked at the options for accessing other routes to funding? Are your finance facilities still offering the best interest rates and repayment terms, or are there better deals out there?

Other finance options may be available to help you fund your continuing growth, so taking a look at the current finance market is well worth thinking about.

Refinance your existing loans

It’s possible that you already have business loans in place, that’s you’re gradually repaying over the course of the loan period. Sourcing that initial capital is such an important part of the startup process, and a vital stepping stone in getting your business idea operational. But when was the last time you reviewed these finance arrangements? Could you, in fact, be getting a better deal?

The finance market is always evolving. New challengers will enter the market, new specialist finance products will be introduced and interest rates and repayment schedules will fluctuate and change. You may well have got a great deal on the business loans you took out five years ago – but refinancing these existing loans is likely to have multiple benefits.

You could:

The key point here is that your business finance shouldn’t sit still. A loan is not a static debt. You can revisit and refinance your debt so it works in the best interest of the business.

Look for alternative routes to finance

Traditionally, businesses went to their bank manager when additional funds were needed. But the dynamic in the funding market has changed dramatically in recent years. Due to economic pressures, and the impact of the pandemic, the big banks have scaled back their lending to small businesses. Your high street bank is no longer the first port of call when finance is needed.

On the flipside of this, there are a growing number of alternative lenders, smaller challenger banks and specialist finance providers to choose from. And this has created a wide choice of different finance products to fit the needs of your growth plan.

Check out the available government funding and grants

During the pandemic, many businesses made use of the emergency funding that the government made available. But don’t forget that government funding isn’t just something that’s available during an emergency.

The state will generally offer all kinds of different enterprise schemes to encourage investment in new and growing companies. This could mean having access to funding schemes, government-secured loans or even government grants. Unlike a loan, grants generally don’t need to be repaid, so making use of local government grants is a great way to boost your capital without having a negative impact on the company’s debt position.

Explore the tax reliefs that are open to your business

Another element of government-back financial support is the use of tax reliefs. One of your major expenses as a business will be paying your corporation tax (CT) bill. But there are usually various tax reliefs available to help you reduce your CT bill and reinvest that saved money back into the business. Careful use of these reliefs can make a big difference to your finances.

For example, many countries offer some form of research and development (R&D) tax relief scheme. To encourage businesses to innovate and invest in R&D, the government will offer a relief against the company’s expenditure on operational R&D costs. This will usually mean either reducing your CT liability, or giving you a cash payment against your R&D expenses.

Choosing the right routes to funding and finance will be vital to your long-term success as a business – so work closely with your advisers and think carefully about your choices.

The post Business tips: Finding the best routes to finance appeared first on Fortuous .

Weighing up a big investment in your business

Fri, 10 Jun 2022 15:43:00 GMT

Are you considering investing in a new way to make your business more productive or streamlined? With a tight labour market, everyone’s time is at a premium – so finding ways to maximise productivity has never been more important.

But it can take considerable funds to pay for a new website, ecommerce platform, software system or automations. Here are a few questions to ask yourself when you’re weighing up the costs and potential benefits of a significant investment.

What are the upfront costs – and the ongoing expenses?

A website, for example, has a large upfront cost for the design, content creation and build. You might think that the costs are then done, but it must be updated and maintained. You can do that in-house, in which case someone needs to be assigned to that work, or you can outsource it.

Always take into account the ongoing costs, because these are a vital consideration when you decide whether to make an important investment.

Which of your current costs will disappear?

Some of the costs you currently incur may vanish with a new system. It might be as simple as no longer paying the cost of an old subscription. Or it might be time saved that is spent manually entering data, processing payments, or dealing with customer issues that arise from an outdated system.

Financial costs are relatively easy to add to the calculations. It’s trickier with time, but try to put a value and quantity on what time might be saved if you can.

How will this change your costs in the long run?

Think about how your business will operate five years from now. Will this new investment allow you to increase your profitability without growing your team? Will you be able to spend more time finding outstanding high-value clients and less time on processes?

Any large investment should make your company run more smoothly, allow you to boost your output, and easily pay for itself.

When will this investment pay for itself?

Once you have all these numbers in hand, you can formulate some idea of when the investment will pay for itself. We can help you estimate a likely timeframe, and some best- and worst-case scenarios. You don’t have to make big choices all on your own – let us help you analyse the costs and benefits to give you more confidence in your decisions.

The post Weighing up a big investment in your business appeared first on Fortuous .

Writing off an outstanding directors’ loan

Wed, 08 Jun 2022 14:25:00 GMT

Being able to borrow money from your business is one of the perks of being a company director. But many owners/directors will be coming out of the Covid pandemic with overdrawn directors’ loan accounts (DLAs) – and without the capital to easily repay these DLAs.

So, if you’re an owner/director in this predicament, what do you do?

We’ve outlined the process for writing off these DLAs, so you can remove this outstanding debt and manage your personal finances in the most tax-efficient way possible.

What happens when a DLA is outstanding and repayments can’t be made?

Let’s look at how outstanding directors’ loans can become an issue.

To make the required repayments, you need to have the available funds. But over the pandemic, many owners/directors will have seen their company revenues drop, cashflow suffer and their own personal income shrink.

How does writing off the DLA help?

An option is for the company to write-off the loan. If the DLA is written off, this avoids the section 455 charge being levied, or will trigger the recovery process if it’s already become due.

Talk to us about the treatment of your directors’ loans

It may be either impossible or undesirable to clear overdrawn DLAs by dividends and other regular means. In these situations, it’s sensible to think about writing off the loan.

Any write-off needs to be formally approved by your shareholders to avoid National Insurance contributions becoming payable. We can talk you through the process of approving the write-off, recording the decision and ensuring the release of the amount that’s due.

If you have overdrawn DLAs that won’t be cleared in the normal course of events, come and talk to us. We’ll help you resolve the situation in the most effective and tax-efficient way.

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Suggestion schemes: how to reward staff for good ideas

Mon, 06 Jun 2022 13:39:00 GMT

Asking your employees for their suggestions regarding improvements and new ideas for the business is a great way to make them feel more engaged and valued. An employee suggestion scheme is an open and transparent way to ask for these ideas – and when set up in the right way, can be a way to reward your team for their creativity, ideas and innovations.

But what are the tax implications of a suggestion scheme? And how can you reward your employees without them losing this money to deductions and National Insurance (NI)?

The two types of suggestion scheme rewards

Payments made to employees as a reward for them making suggestions can be paid free of tax and NI deductions, under certain circumstances.

There are two types of suggestion scheme rewards:

The suggestion scheme must be open to all employees, or to a specific subset of employees. For example, those in a particular department or at a particular location.

The rules for encouragement awards

For an EA, the maximum you can pay your employee for any suggestion is £25. If the actual payment is greater, everything above £25 is subject to tax and NI in exactly the same way as their normal employment income.

If more than one employee makes the same suggestion, the £25 payable free of deductions is allocated in proportion to the payments actually made. So, If the total payment given to each employee is the same, then £12.50 is tax-free for each. But if Employee A is given £40 and Employee B is given £20, two thirds of the tax-free £25 is allocated to Employee A because she got two thirds of the pot. Employee B is then allocated the remainder.

The rules for financial benefit awards

For an FBA, the suggestion has to relate to an improvement in efficiency or effectiveness which your business adopts, and which you can reasonably expect to result in a financial benefit.

The maximum award is:

If more than one employee makes the same suggestion, the calculated maximum payable free of deductions is allocated in proportion to the payments actually made. Where employees make more than one suggestion, additional awards can be made – each suggestion is treated separately with its own maximum deduction-free amount.

Talk to us about setting up an employee suggestion scheme

Rewarding staff for making suggestions to improve the business can act as a good motivator and shows that you’re keen to hear feedback and ideas from your team. Employees feel more involved in the business and you get the benefit of your staff’s innovations and creativity.

If you’re thinking about implementing a suggestion scheme, or you’re already running one, talk to us if you are unsure how the tax and NI aspects will work.

The post Suggestion schemes: how to reward staff for good ideas appeared first on Fortuous .

What to do when employing staff

Sat, 04 Jun 2022 14:16:00 GMT

As your new business grows, you’ll inevitably need to take on some employees. Having more hands at the pump helps you scale up, delegate tasks and broaden the scope of your operations. But what are the important things to get right when employing staff for the first time?

Let’s look at the main responsibilities when becoming an employer.

Registering as an employer

If you employ anyone at a rate of pay above the National Insurance lower earnings limit (£123 per week, £533 per month) you must register as an employer with HMRC. This will mean operating a payroll to pay your employees wages, and applies even if no tax or National Insurance liability actually arises.

Talk to us about managing your payroll and employee admin

Becoming an employer is good for the business, but does add a whole new layer of employee admin work.There are plenty of associated administrative tasks to be taken care of – and the penalties for getting it wrong can be severe.

We can take care of payroll processing and the reporting to HMRC, to make sure you stay compliant with the regularly changing rules.

If you want to run your payroll inhouse, ask us about a ‘health check’ to give you the peace of mind that everything is in order and looking shipshape.

Get in touch to talk about your payroll needs.

The post What to do when employing staff appeared first on Fortuous .

Business tips – Learning to make good business decisions

Thu, 02 Jun 2022 13:21:00 GMT

Making good business decisions is easier to do when you have excellent information at your fingertips – and that’s the value of having great reporting at the heart of your startup.

Any cloud accounting software worth its salt will offer you straightforward ways to run your financial reports and track your important metrics. That’s standard in the new digital world. And this level of reporting gives you real, tangible data on which to base your decision-making. But good decision-making isn’t just about the numbers.

As well as having an effective understanding of your finances, you need a sense of what’s good for the business, how decisions will impact on your growth and what your future path looks like.

Run management information at least once a month

Modern cloud accounting software makes it easier than ever to run detailed, up-to-date reporting on your financial position. With the click of a button, you can run numerous in-depth reports and statements that show your past and future position. Doing this regularly gives you a wealth of financial information on which to base your decision-making and strategic thinking.

At each stage in your startup’s growth, you’ll have to make important decisions about your next step – so, it’s important to think about the financial implications of any new projects, the amount of cash in the business and the availability of new sources of funding.

Use metrics and projections to inform your decision-making

Setting up a custom dashboard to monitor the most important metrics and key performance indicators (KPIs) is definitely a good idea. Most accounting apps will let you tailor your dashboard, so you can pick and choose from KPIs that are most relevant to your startup.

Set clear and democratic targets for all of your main KPIs and track them on a weekly basis, so you’re monitoring the financial heartbeat of the business. If cashflow is looking poor, look at freeing up some cash, or borrowing money to fill the gap. If sales revenues are dropping, put some renewed vigour into your sales activity, or get a new marketing campaign underway to raise awareness of your most profitable products and services.

Talk to your board and executive team when scenario-planning

You may be the sole founder of your startup, or you may be part of a bigger team of co-founders. But the reality is that no one person can make all the decisions in a busy startup. To get the best overview of a challenge, or to come up with an effective way to grab a potential opportunity, you need to talk to your team – that’s the only way to get an effective consensus.

Talk through the current threats and opportunities and run through as many different potential scenarios as possible. What’s the best-case scenario, and how can you achieve it? What’s the worst-case scenario, and how do you plan for it, if things don’t go according to plan?

Work closely with an experienced external adviser

When you’re working in the business 24/7, it’s hard to see the business in an objective way. Your judgement on some issues can be overly emotional and clouded by internal or political factors. Working with an experienced accountant, business adviser or business coach brings a fresh perspective to the business – both financially, strategically and emotionally.

Having a trusted external accountant on the team definitely helps you get your numbers straight. But they can also bring their knowledge and experience to bear on your strategic thinking, your decision-making and the impact of the business on your own mental health and wellbeing.

You can open up to them about your worries, share your aspirations for the business and bounce strategic ideas off them – taking some of the pressure off your shoulders.

Track how you’re measuring against your goals

To meet your goals and make good business decisions, it’s helpful to monitor and track your progress against these targets. If you refer back to your reporting and KPI metrics, you can easily measure your performance over time – and take action if progress is starting to slip.

Areas to keep an eye can include your:

Making a few bad decisions along the way is all part of the learning process. But by monitoring your performance and talking to the best advisers, it’s easier to keep the business on track.

If you’re at the early stages of planning out your business idea, please do get in touch. We’ll help you set up the best possible management information, to help guide your decision-making.

The post Business tips – Learning to make good business decisions appeared first on Fortuous .

Business tips: Improving your credit score

Tue, 31 May 2022 13:13:00 GMT

Your company’s credit score is important. To be able to borrow from lenders, or negotiate trade credit with your suppliers, your business needs to prove that it’s a low-risk business to lend to.

The major credit agencies will give your business a score, based on its creditworthiness. This score takes into account things like your credit history, your debt profile and the industry you work in. The rate you’re given can have a significant impact on your ability to borrow money, so it’s sensible to review your credit score and to take action to improve it.

What can you do to bump up that credit score?

1. Check your SIC code

Your Standard Industry Classification (SIC) code tells the relevant regulatory bodies what industry or sector you trade in. Certain sectors are higher risk than others, so if your SIC code is incorrect, you could inadvertently be bringing down your credit score.

Check the SIC code you’re registered with and make sure it properly reflects the sector you work in. It’s better to be as specific as possible. By narrowing down your industry classification, you give the credit agencies more information about your business and your risk level.

2. Improve your payment performance

Paying your creditors on time, and in full, creates a good payment history. The credit agencies will look at how long it takes you to pay your suppliers and main providers. If you’re consistently late in paying, that sets a bad precedent and will bump up your risk in the agencies’ eyes.

Run a tight accounts payable function and make sure you pay all bills on (or before) the invoice due date. Pay on time, keep your creditors happy and you’ll build up a payment history that sets you out as creditworthy.

3. Don’t apply for multiple credit facilities

When cash is in short supply, the temptation is to borrow as much money as you can. But if you apply to multiple lenders for credit facilities, this is bad news for your credit score.

Credit agencies won’t look favourably on your need to borrow from multiple sources. In a best case scenario, it shows that you don’t currently have enough liquid cash in the business. In a worst-case scenario, it demonstrates that you’re badly organised, poor with managing cashflow and have rising debt in the business.

Consolidate your debt needs into one finance facility, where possible, and deal with one lender. And try to keep your borrowing to a sensible and manageable level.

4. File the right accounts

In some circumstances, it’s possible to file filleted accounts. This meets the compliance requirement, but doesn’t give the agencies enough detail on your current financial position. And with little to no information to work with, your perceived risk level is likely to increase.

Make sure you’re filing full accounts that give the agencies a complete overview of your finances. And ensure you file these accounts on time, so you don’t incur any late penalties and give an impression of sloppy financial management.

5. Avoid any red flags against the company or your directors

Credit agencies are looking for evidence that you’re creditworthy, low risk and that your people are ‘fit and proper’. Any history of insolvency will act as a red flag and will have a negative impact on the company’s credit rating.

If you or your fellow directors have had any previous insolvencies, or have things like County Court Judgements (CCJs) against you, this will affect your credit score. You can’t change the past, but you can make sure you build up a good credit profile and reputation to counteract any of these red flags.

For example:

Meeting these simple goals will have a positive impact on your credit score – and that’s good news for the financial future of your business and your growth plans.

If you want to get in control of your credit score, please do get in touch. We’ll help you review your credit position and look for possible ways to improve your ratings with the agencies.

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Planning your filing and payment deadlines for the year

Sun, 29 May 2022 13:06:00 GMT

Keeping on top of the deadlines for your company filing and tax payments can be hard work. With so many elements to coordinate and keep track of, it’s easy for deadlines to occasionally slip through the cracks – but that can lead to fines, penalties and other issues.

The key is to stay fully in control of your deadlines and to plan out the key dates across the coming business year.

Your key deadlines for the coming year

To help you manage and plan your company deadlines effectively, we’ve created a list of the key dates – so you can factor these into your planning and avoid those costly penalties.

Company-specific deadlines:

General deadlines:

There’s a full breakdown of limited company compliance requirements available on the HM Revenue & Customs website here .

Talk to us about planning your company deadlines

Coping with your company deadlines needn’t be a huge chore, if managed in the right way.

Where we carry out the related activities (e.g. your payroll processing) we’ll monitor those deadlines automatically for you – but bear in mind that you remain legally responsible for these deadlines being met, and for any penalties if deadlines are missed.

You can monitor the deadlines for all relevant company and tax activities, but pay particular attention to those we’re not carrying out for you. Having a clear timeline, with reminders in your online diary or your project management software, will help immensely.

Get in touch to talk about your yearly tax planning

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Buying commercial property through a pension scheme

Fri, 27 May 2022 09:21:00 GMT

If your business operates from owned or rented premises, it’s worth thinking about using your pension fund to acquire the property. Owning this property through your pension scheme has some considerable tax advantages that are well worth looking into.

The two types of self-administered pension scheme

The tax-efficient benefits act as a real incentive for you to own your business premises through a pension scheme. But what schemes are available to achieve this tax-efficient goal?

There are two key types of self-administered pension schemes:

Other rules re running the pension scheme

That’s the basic outline of what a SIPP or SSAS scheme can do. But there are further rules regarding the management, investment and running of the scheme.

Talk to us about SIPP or SSAS schemes

Before you enter into any investments and pension planning, it’s a good idea to get professional advice on your plans. We can discuss broad principles with you, and if you want specific, actionable advice then we can put you in touch with an appropriate pensions specialist.

WIth the right planning and management, owning property through your pension scheme can be an excellent way to improve your property costs and your tax efficiency.

Get in touch to chat about SIPP and SSAS schemes.

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Quick Tips: Making use of the Marriage Allowance

Wed, 25 May 2022 13:22:00 GMT

When you decide to get married, tax planning is probably fairly low on your list of romantic requirements. But making use of the Marriage Allowance can actually reduce your tax bill by £250, and can often be overlooked when thinking about your wealth planning.

Who qualifies for the Marriage Allowance?

The allowance applies to married couples and people in a civil partnership. To be eligible, one person in the couple must earn below the tax threshold, and the other mustn’t pay tax at a rate higher than the basic rate. NOTE: the allowance is NOT available to couples who are not married or in a civil partnership – so couples in a common-law relationship can’t apply.

How does the allowance work?

The lower earner transfers 10% of their personal allowance to their partner. For 2021/22 and 2022/23 that’s a transfer of £1,257 which is rounded up to £1,260. The recipient offsets that against their own tax payable (20% x £1,260 =), saving up to £252. If the lower earner’s taxable income is below £11,310 they still won’t pay tax, so have lost nothing by transferring the allowance.

How do I claim the allowance?

If you submit a self-assessment income tax return, you can make the claim in the return. Alternatively you can write to HMRC, or arrange it over the phone at 0300 200 3300. The easiest way, however, is to apply online at www.gov.uk/apply-marriage-allowance .

What are the main perks?

You can claim the allowance even if you’re drawing a pension, or even living abroad, as long as you claim a personal allowance. You can back-date your claim as far back as the 2018/19 tax year, so potentially there are tax savings up to £1,090 plus a further £252 for the current (2022/23) year and future years.

Are there any potential snags?

The claim is for ‘all or nothing’. So, for example, if you want to use the allowance for the 2021/22 tax year, you must transfer the whole of the £1,260. If you earn more than 90% of the personal allowance (£11,313) and your spouse earns less than 110% of the allowance (£13,827) then your overall tax bill will be higher – which makes the whole claim process redundant.

Talk to us about applying for the Marriage Allowance

Saving around £250 each year is not going to turn you and your partner into millionaires. But, as the old saying goes, ‘every penny counts’ and if the Marriage Allowance is available then it makes sense to make a claim.

As your accountant and tax adviser, we can let you know whether you’re eligible for the allowance and if backdating for previous tax years is also an option.

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5 important business negotiation strategies

Mon, 23 May 2022 13:08:00 GMT

Business negotiation is a world of contradictions. You’ve got to be firm but flexible. Open and sharing, but a little cagey. There’s a lot to get your head around. But your state of mind might be the most important thing. Aim for a mutually beneficial outcome and you’ll find the whole exercise more comfortable.

Follow these five tips to prepare for your next negotiation.

1. Do your homework – Learn the main terms and concepts they’re likely to use so you’re not confused or intimidated by jargon. Familiarise yourself with their products or services, their industry and their competitors. Understand your position. It’s important to know what you bring to the table, and why they might prefer to do business with you.

2. Don’t be anchored – Being the first to say a number can be a good way to take control of a business negotiation. That first figure often becomes a reference point for the rest of the conversation.

3. Know where you can compromise – As a small business owner, you may need the deal more than your negotiating partner. Be realistic about that. Don’t let your pride get in the way. Decide what you need from the deal to make it worthwhile and be prepared to compromise on everything else. You can do this strategically.

4. Aim for a win-win – Negotiating isn’t about trying to dominate an opponent. This is business – you’re trying to find a profitable outcome that benefits everyone. Always remember that both parties can win and don’t underestimate the power of being nice.

5. Have a plan B – What happens if you both walk away from the deal? Figure out what you’ll do if business negotiations fail and ask if you can live with that outcome. This exercise will help you decide how hard you negotiate.

Practice makes perfect with business negotiations

Negotiation can be tricky, which is why many of us don’t really like doing it. But if you have a small business, you probably can’t avoid it. Don’t be intimidated by it. As long as you know the strength of your position and respect the other party, you’re off to a good start.

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How to accept payments online – and why it’s smart

Fri, 20 May 2022 13:33:00 GMT

One of the best things about online shopping is instant, hassle-free payment. Enter your details, click, and you’re done. If your customers can make an instant online payment, they’re likely to pay you more quickly – and they’ll appreciate the simplicity too.

The details

Online payment methods include credit and debit cards, ACH (Automated Clearing House) services like Paypal, and repeat payments through direct debit. Payments are managed by merchant service providers – specialist companies that process transactions on your behalf. Some focus on credit and debit cards, while others stick to ACH or direct debit.

Choose a provider that can integrate with your accounting software, and you can add a super-simple payment button to future invoices.

The costs

While your merchant service provider shouldn’t charge any set-up fees, they will charge transaction fees. These range from 2-4% of the invoice for debit or credit cards, and under $2 a transaction for direct debit. These fees are an added expense, so they need to be included in your profit calculation – smart accounting software will do this automatically.

Because credit and debit fees can add up, many businesses don’t offer online payment for invoices over a certain amount.

The benefits

Businesses using online payments get paid faster. Of course, not every client will pay instantly just because they have the option, but it should speed up your average payment time.

A bonus benefit? Customers appreciate the ability to pay online, so offering it as an option can be a big point in your favour.

Ready to reap the benefits of online payments? Get expert advice and set-up support from our accounting team.

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Long-service awards and how to reward your staff

Wed, 18 May 2022 13:26:00 GMT

Rewarding your valued employees is a great way to keep them happy, engaged and motivated.

When a member of staff clocks up an employment milestone, you want to show your appreciation for all their hard work. Giving them extra benefits or rewards helps them feel valued and one of the tax-free benefits that’s often overlooked is long-service awards .

What is a long-service award?

A long-service award could be a cash sum, a non-financial reward or even share options in the company. But only non-cash awards can be given tax-free. If you give a cash amount or share options, you’ll have to report this to HMRC and the employee will be charged tax and National Insurance (NI) on the reward.

How do I give a tax-free long-service award?

Provided that you follow some simple rules, awards to employees for long service can be made without creating any adverse tax consequences for your employee.

If your employee has received an award in the previous ten years, the value of that award is deducted from the amount of the later award. This will obviously lower the amount that can be made free of deductions.

How does this work in practice?

Let’s look at an example and see how you would make a long-service award.

For a 30-year award:

What happens if I give a cash award?

If you give a cash award to your employee, the full value must always be included in payrolled earnings and subject to PAYE and NI as normal.

Where a non-cash award exceeds the tax-free amount, it can be reported on a P11D form as a taxable benefit-in-kind, or the tax due can be included in a PAYE settlement agreement .

Talk to us about giving long-service awards

When you have an employee who has been with you for 20 years or more, an award is a great way to recognise their long service. But to ensure you do this in the most tax-efficient way, you need to be aware of the associated tax rules.

We’ll help you draw up the rules for any long-service award scheme and can keep you informed of any future changes in the requirements.

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Business tips: Getting in control of your spending

Mon, 16 May 2022 10:48:00 GMT

Keeping the business in a positive cashflow position is vital. But you can only do this if your cash inflows (sales revenues and other income) outweigh your cash outflows (overheads, supplier costs and other liabilities like tax costs or loan repayments).

One way to re-balance the cashflow scales is to get in better control of your spending. This process of ‘spend management’ is all about reviewing your expenses, negotiating better deals with suppliers and getting a razor-sharp focus on reducing your cash outflows.

Review your current suppliers

Once you have a reliable supply chain set up, it’s very easy to fall back on using the same suppliers time and time again. But the reality is that there’s real value in reviewing the suppliers you’re using, so you don’t miss out on any better deals.

Prices will go up and down in the marketplace and new suppliers will appear in the market. So it’s worth regularly checking for alternative providers that can offer cheaper rates, better value prices or longer payment terms etc.

Negotiate better prices with your trusted suppliers

You may be happy with the supplier relationships you have, but still want to cut down on your spending. In this scenario, it’s well worth negotiating. Very few suppliers will want to lose a valued customer, especially if you’re a long-term client who’s bringing in reliable revenues. If the relationship is strong enough they’ll be open to negotiating a deal that works for both of you.

See if you can push the prices down, or get discounts for buying in bulk etc. And, if possible, see if you can get them to agree to a trade credit agreement, where you can pay for the goods and services over a longer period of time, to boost your cashflow.

Rein in your expenses

It may sound obvious, but one of the easiest ways to cut your overall expenditure is to be a bit more frugal with your overall spending. Don’t overspend on stock, raw materials or services. Just buy what you need to stay operational, and keep a close eye on when new orders will be needed, rather than overspending and using up your available cash.

Where day-to-day spending has got out of hand, you can make a big difference to your expenditure by making small changes to your outgoings. If you look at your spending with a fine-tooth comb, you’ll soon find costs and expenses that can be cut back or stopped entirely. Other cash-saving options could include putting a limit on staff expense cards or canceling unnecessary software and magazine subscriptions etc.

Use a purchase order number system

A purchase order number system makes it easier to keep track of your spending. In essence, any purchase made by the business needs a purchase order (PO) number assigned to it, prior to a member of staff buying anything. This allows you to allocate a budget and track the spending against this particular purchase or project.

Having a PO number also makes it easier to track incoming invoices. Suppliers can quote the PO number on their invoice, so you can match the bill to the allocated job and budget.

Use tech to get in control of the numbers

In an ideal world, you want as much oversight over your spending as possible. And with today’s cloud accounting software, expenses apps and inventory tools, it’s easier than ever to manage your expenses and stay in control of the main numbers.

You can use an expense management system, like Pleo, Soldo or DiviPay, to get better oversight of spending and put yourself back in the expenses driving seat.

If you want to streamline your spending, come and talk to us. We’ll help you spot the areas where costs can be cut and use the latest tech to manage the numbers.

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Business tips: Making it easier to get paid

Thu, 12 May 2022 13:14:00 GMT

Making sure you get paid on time is crucial to your success. The process of making sales and generating revenue lies at the heart of any business model. But you can’t manage your cashflow effectively or raise any profits if customers don’t actually pay their invoices.

The easier you can make it for customers to pay you, the faster you’ll see cash coming into the business. That’s good news for your financial position, your ability to cover your operational costs and your capacity to fund the growth and expansion of your business.

So, how do you speed up those payments and make sure you get paid on time?

Set out clear payment terms

Your payment terms are the starting point for healthy payment times. These terms set out when you expect to be paid and form a legally binding contract with the customer. You may expect immediate payment on receipt of the invoice. Or you might set out a specific number of days that the customer has to pay the invoice (generally 30, 60, 90 or 120 days, depending on your industry). This is sometimes called ‘trade credit’ and allows your customers to pay for goods and services at a later, pre-agreed date – helping them to spread the cost.

Your payment terms should also include details of any late payment penalties. If the customer doesn’t meet your agreed payment times, most businesses will add a 1% to 1.5% monthly late payment fee to the outstanding bill. This acts as a great incentive for the customer to pay the bill, before the penalty fees start mounting up.

Invoice customers as soon as you can

In a business-to-consumer (B2C) environment, your customers will generally pay for their goods and services immediately. But when you’re working in the business-to-business (B2B) world, you’ll need to send your customer an invoice, asking for the money to be paid.

A customer can’t settle their bill until you send them an invoice. So, it’s vital to send out the invoice as quickly as possible, so you can minimise the gap between doing the work and being paid for the work. In some industries, the project will be broken down into multiple invoices, paid across a period of time. This makes it easier for the customer to pay, and means you (as the supplier) don’t have to complete the project before receiving the money you’re owed.

Ideally, you want your invoices to go out as early as possible. This allows your payment terms to kick in and makes it easier to predict when cash will be coming into the business.

Be organised about your payment admin

Getting paid is a process – and the more organised you make the process, the quicker the payment will be received. When you send out the invoice, make sure you send it to all the relevant people in the payment chain. This will usually be:

It’s also a good idea to quote any relevant purchase order (PO) numbers that the customer has raised, and to give a very clear description of the work done, or the goods purchased.

Embrace the available payment technology

Invoices used to be hard-copy printed bills, but in the digital age the vast majority of companies will send out e-invoices. Electronic invoices are easy to raise (usually from your accounting software or project management app) and can be emailed out instantly. Doing everything in the digital realm also makes it easier to keep records and keep track of payments.

Many e-invoice systems will also let you add a variety of different payment options for the customer. You could just include your bank details and wait for the customer to make a direct payment to your account. But you can also include payment buttons in the e-invoice that give customers the option to pay via digital payment gateways, like PayPal or GoCardless etc.

Offering more ways to pay makes the whole process more convenient for your customers – and will generally result in faster payment times as a result.

If you want to speed up your payment times and boost your cashflow, please do get in touch. We can help you streamline your payment processes and embrace the latest in payment tech.

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Business tips: Budgeting and managing cashflow

Tue, 10 May 2022 13:29:00 GMT

If you want to stabilise your finances and grow the business, working to strict budgets becomes a necessity. Managing the cashflow twists and turns of a project can be hard work. But it’s easier to do when you have an agreed budget and can track your spending and performance.

So, what’s the best way to stay in control of the budgets you’ve set? And how can you manage your cashflow position to make sure there’s always enough cash to fund the project?

Understand the costs of each project

Starting a project without fully understanding how much it will cost is a no-no. To keep on top of costs, overheads, staff expenses and general spending, you need at least a ballpark figure for this expenditure. In an ideal world, you’ll want to be as precise as possible with these costs.

Run through the project from start to finish and highlight every point where there will be costs to incur. It might be the cost of your raw materials. It may be the cost of buying new equipment. It could be the payroll costs for the people actively working on the project. Break everything down and come up with a total expense for the project. This is your starting point.

Set your budget and track it over time

Once you know your baseline cost for the project, you and your team should decide on the amount of funds to allocate to the budget. Your baseline cost is a starting point, but don’t forget to include extra for specific contingencies. What if the project overruns? What if your raw material costs go sky high? What if you need more people to get the job over the line?

Agree on a clear budget and set up your finance system to track spending against this budget. With a cloud accounting system at the heart of the business, it’s very easy to create a budget and then record and track your spending over time.

Keep a close eye on budgets and project cashflow

One of the big things to remember is that a budget is not a static thing. You’ll obviously aim to stick to your initial costs, but prices and availability will affect the total spend over time. Because of this, it’s vital to not just write the budget and then forget about it.

Keep a close eye on your budget performance and the cashflow for each project. Being able to review this performance, in real time, should help you avoid overspending, or running out of cash for the project. And when the cash in the kitty is getting low, you can get proactive and look at ways to top up the budget, or rein in spending in other areas of the project.

Take action to maintain your positive cashflow position

Balancing the cashflow scales on a project isn’t easy. But when you spot that there’s a potential hole in the budget, the important thing is to do something about it, pronto!

Running any project with your fingers crossed that ‘it will all work out in the end’ is a recipe for disaster. And with such detailed budget reports and cashflow forecasts available with today’s finance apps, there’s really no need to be disorganised about your spending.

Think about:

If you’re thinking about scaling up your established startup, please do get in touch. We’ll help you build solid, workable budgets that can be easily tracked through your accounting system.

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Getting the best return from trade shows

Sun, 08 May 2022 13:23:00 GMT

Covid-19 restrictions put a hold on trade shows for a couple of years but many industries are putting them back on the calendar.

Trade shows can be a great place to showcase what you do, reach new audiences and get some valuable face to face time with your customers. They can also provide opportunities to network with others in the industry.

But they can involve a lot of work, time away from the business and expense, so you’ll want to make sure you get the most out of them.

Will it deliver value?

Before you commit, think about what you want to achieve. The event should deliver value on two levels:

What to do before, during and after the event

Before the event:

At the event:

After the event:

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Retail’s online boom: Are you getting a slice of the action?

Fri, 06 May 2022 13:19:00 GMT

In 2021, retail e-commerce sales amounted to approximately 4.9 trillion U.S. dollars worldwide, according to research by Statistica. At the same time spending at physical stores has dropped.

While that was strongly influenced by Covid restrictions and distancing measures, the trend is clear: online shopping is gathering steam.

You should be getting a piece of the online pie

Whether your business sells goods, services, or both, your customers are searching for you online. Your website is more than simply an online storefront or basic business card. It can be a tool for marketing, customer acquisition, sales and compliance.

It’s common to see businesses underinvesting in their website and social media branding – not spending time or money on staying up-to-date and in touch with customers, or providing a subpar customer experience. These days, it’s highly likely that your website or social media channels are your customer’s first experience with your brand.

Does your business provide a great user experience for your online customers?

To capture as much online business as possible, your website should be easy to navigate, mobile adaptable, and have a simple shopping cart and smooth transactions so customers can pay you with ease. Your social media presence will depend very much on meeting your customers where they spend time online, so it will vary by industry and target market, but it should reflect your business’s values and drive engagement and sales.

These are some absolute basics, so if your online presence isn’t clearing these low hurdles, you should talk to an expert about how to improve it.

How much should you spend?

Although we’re far from being website or social media experts, we can help you figure out an appropriate budget to invest in your company’s online presence. We’ll take into account factors like how much growth you might see, how much time you’re spending on it now, and how much money your business can afford to allocate.

Do get in touch, we’re here to help.

The post Retail’s online boom: Are you getting a slice of the action? appeared first on Fortuous .

Business Tips: Setting KPIs and measuring performance

Wed, 04 May 2022 13:16:00 GMT

Once you begin trading, you’re faced with a new challenge – successfully managing the course of your brand-new business and making sure it’s a profitable enterprise.

It’s easier to manage your startup’s sales and finances when you have access to the best possible information and data about your performance. Tracking specific metrics and key performance indicators (KPIs) allows you to see how you’re performing against your targets – so you can take action to improve performance, sales, growth and profitability.

But which KPIs should you be tracking?

Sales and conversion rates

An obvious metric to track is the number of sales you’re making each month. You’ll have set a target for these sales in your business plan, so it’s important to record each sale and see how the startup is performing over the first six months of the business.

It’s also important to log and track the drivers that lead to these sales. How many sales enquiries are you receiving? How many of these enquiries are being converted into actual sales? How many customers are being engaged by your marketing campaigns, and is this engagement leading to interest in your products and/or services.

The more detail you can track from your sales and marketing activity, the more forensic you can get with which campaigns are actually delivering the goods.

Sales revenue and other revenues

When customers buy your goods, that creates income (or revenue) for the business. Ultimately, no business can succeed unless it’s generating enough revenue to keep the wheels turning in the business. So, tracking your sales revenue is a vital measure of your financial health.Tracking your various revenue streams over time keeps you in control of your finances and helps you make the right decisions. You can track performance against your revenue targets. You can forecast how much working capital you’ll have at a future point in time. And you can see if there’s enough cash in the bank to fund your projects and growth plans.

Cashflow and ongoing cash position

Good cashflow management is all about balancing the process of cash coming INTO the business and cash going OUT if the business. Recording and tracking your cash position is easy to do with the latest cloud accounting software and cashflow apps, so there’s no excuse for not tracking your cash position.

Ideally, you want the business to be in a positive cashflow position (with more cash coming in, than going out). But to achieve this, it’s helpful to see these cash inflows and outflows in real-time. With up-to-date metrics on your cashflow position, you can make informed decisions about spending, payment of bills and where additional cash and funding may be needed.

Debtor days and aged debt

When customers fail to pay your invoice on time, that creates an aged debt – money that you SHOULD have received but which the customer has yet to pay. An aged debtor report shows you which invoices are unpaid, which customers haven’t paid, and the total size of this debt.

Your debtor days number is a metric that shows the average number of days it takes your customers to pay you. Anything above 45 days is bad news, so you want to aim to keep this number between 14 to 30 days, if possible. A large amount of aged debt will leave a hole in your cashflow – and that can quickly start to impact on the day-to-day running of the business.

Gross profit margin

Generating a profit is crucial to the continued success of your startup. Having metrics to measure your profitability is an important part of managing your finances.

One common way to do this is to track your gross profit margin. This metric shows the amount of profit made BEFORE you deduct things like overheads and the cost of goods sold (COGS), shown as a percentage. The formula for calculating your gross profit margin looks like this:

Gross Profit Margin = Gross Revenue minus COGS, divided by Net Revenue, multiplied by 100

By keeping a close eye on these financial metrics and KPIs, you have the best possible insight into the performance of your new startup – and that’s invaluable as your startup journey unfolds.

If you’re at the early stages of planning out your business idea, please do get in touch. We’ll help you set up a custom KPI dashboard to manage the future path of your business

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Considering business insurance? What cover do you need?

Mon, 02 May 2022 13:14:00 GMT

When you’re operating a trading business, it’s sensible to think about business insurance.

Whatever kind of business you’re running, there’s always going to be a certain element of risk. What if a client sues you? What if an employee injures themselves on your premises? What if your workshop catches fire? The list of potential risks is long and, on the whole, it’s very difficult to predict when a challenging situation is likely to rear its ugly head.

Because of this inherent risk level, the sensible thing to do is to take out some business insurance. These insurance policies cover you for different eventualities, and will mean that you’re covered financially if disaster does strike.

But a quick glance at any business insurance website will reveal a wealth of different kinds of insurance to choose from. So, which insurance does your business actually need?

Choosing the right insurance for your sector and business

Business insurance is a complex area to navigate. There are plenty of insurance options to choose from and many of them can be highly specialised. There are, however, certain basic insurance policies that most business owners will need.

So, what are the main insurance types to consider?

By signing up for the main types of business insurance, you can be confident of trading with all the most likely risks covered and accounted for.

It’s worth noting that many insurers will also offer tailored, industry specific insurance for different sectors and business types. So there will be specific insurance policies for freelancers, construction businesses, hospitality companies or creative agencies etc. Talking to an insurer that specialises in your industry is a good way to cover all your bases quickly, with policies that are customised to fit your exact circumstances as a business.

Talk to us about finding the right insurance adviser

None of us know exactly what lies around the corner when it comes to running a business. So, making sure you’re fully insured takes away some of the worry and reduces the main risks.

If you want to make sure you’re using the best possible insurance, please come and talk to us. We can advise you on the main policies to look for so you can get the right insurance in place as quickly as possible.

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Business tips: Outlining your ideal customer

Fri, 29 Apr 2022 13:12:00 GMT

Customers form the beating heart of your startup. Without a stable customer base, you can’t generate sales, bring in income or create a viable business model. So, it’s vital for your new business to have a very clear and fleshed-out idea of your ‘ideal customer’.

Your perfect customer may well evolve and change over the life of the business, but it’s important to define your initial customer audience right from the outset.

Who is the end customer for your products and/or services?

Whenever you create a new product or service, you should have a very specific idea of who your target customer will be. Understanding that customer profile is incredibly important.

Is your ideal customer a high-street consumer, or a procurement manager in a business? Will your audience be younger or older, at the top end of the economic spectrum, or someone with limited cash to spend. Think about the full demographic breakdown of this perfect customer and make as detailed an outline as possible, so you know exactly who you’re targeting.

What are the key needs of this demographic

A good business model provides a solution to a given customer need. Understanding that need in forensic detail is what gives you the power to customise and tailor your offering.

Put yourself in your ideal customer’s shoes and imagine their daily lives. What are the challenges they face? What are the problems holding them back? What are their dreams and aspirations? What kinds of people do they want to become? The more information you can glean on their everyday requirements, the more primed you’ll be to target those self-same needs.

How does your product/service meet these needs?

Knowing your customers’ key needs is only half of the conundrum. What you have to do now is offer a product or service that actually MEETS these needs, at a price the customer will pay.

Ask yourself, ‘what does the customer want, and how can we provide it?’. If you can design the right solution, you’re already halfway to creating a new customer. For example, eating enough fresh fruit and vegetables is something we all struggle with. A business that delivers fresh fruit & veg smoothies to people’s home or work addresses, makes it easier to eat a healthy diet. The ‘needs’ there are healthy eating, convenience and price. Get it right, and you’ve filled that customer niche.

How do you intend to reach this customer audience?

To sell your products, customers must be aware of your brand. So, an important part of your customer research will be understanding which marketing and promotional channels to use.

Knowing where your customers hang out – both online and in the real world – is a critical piece of information when it comes to promotion. In the digital age, there’s a baffling mix of different online channels and social media platforms to navigate. But by doing your research carefully, you soon start working out whether your target audience are Facebook fans, or Twitter lovers. The more detailed you can be about these customer preferences, the better you’ll get at choosing the right promotional and marketing routes.

Bringing it all together into a customer profile

By combining all the information you’ve gathered into one concise customer profile, you give your sales and marketing team a very clear picture of who to target.

This would be the customer profile in our food delivery example:

If you’re at the early stages of planning your customer audience, we can help you define your business strategy accordingly.

Talk to us about your startup plans.

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Do you need to complete a self-assessment return?

Wed, 27 Apr 2022 13:08:00 GMT

If you’re self-employed, a partner or a company director, then HMRC will ask you to submit an annual self-assessment tax return . However, every year will see some people failing to register on time for self-assessment – and facing some stiff penalties as a result!

So, who needs to fill out a self-assessment tax return? And, if you’re eligible, when should you be getting this return over to HM Revenue & Customs (HMRC)?

When should you register for self-assessment?

The deadline to register for self-assessment is 5 October after the tax year in which your circumstances brought you within the scope of self-assessment. If you’re self-employed, you also need to register for Class 2 National Insurance Contributions (NICs) by the same date.

Note: Below these limits, you don’t need to register for self-assessment, but you must inform HMRC of the amount involved. HMRC may be able to collect any tax that’s due by altering your PAYE code and collecting it from your employment income.

Is filling out a return mandatory?

If HMRC sends you a notice to complete a tax return, you must complete the return. This applies even if all your income is taxed through PAYE. You can contact HMRC and the notice may be withdrawn, but if they don’t withdraw the notice then it’s mandatory to fill out the return.

Where you’ve not notified HMRC of your obligation to register for self-assessment, HMRC will charge penalties for a late return and non-notification. These penalties can be lower if you contact HMRC before they contact you. Once you’ve informed HMRC, you can report any undeclared income using the digital disclosure service , or one of the campaigns such as the Let Property Campaign , if applicable.

Talk to us about getting your return in on time

No-one wants to be hit with a financial penalty for late filing of a return, or be faced with prosecution through the courts. If you’ve failed to notify HMRC of taxable income, it’s always better to notify them first (an ‘unprompted disclosure’) rather than wait for them to contact you.

As your accountant and tax adviser, we’ll help you prepare the documentation required by HMRC and will calculate the tax due and penalties offered. Once HMRC is notified of undisclosed income, there’s a deadline of 90 days to provide them with full details.

Get in touch to sort out your tax return.

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Should you choose a company van over a company car?

Mon, 25 Apr 2022 13:06:00 GMT

Having a vehicle to use for business purposes adds to the efficiency of your business. But should you opt for a company car or a company van?

Company vans are taxed in a far more favourable way than passenger cars, in most cases. Both company tax relief and personal benefit-in-kind tax charges are more tax efficient for vans and, partly because of this, many business owners choose a van over a car.

What personal tax do you pay on a van compared to a car?

Personal tax for use of a company car is charged on an annual amount of up to 37% of the list price, depending on the car’s CO2 emissions. On top of this, the same percentage is applied to a lump sum of £25,300 to cover fuel, where that’s provided by the employer.

When you use a van, that’s taxed at a value of £3,600 for use of the vehicle, and on a further £688 where private-use fuel is provided. As you can see, that can be far more tax-effective.

What makes a vehicle a ‘van’?

A van is defined as ‘a vehicle designed primarily for the purpose of carrying goods’, and with a gross vehicle weight not exceeding 3,500 kilograms.

Generally, a vehicle with seats and/or side windows behind the driver’s seat will not count as a van, so however rugged your Land Rover Defender Station Wagon may be, it won’t count. Nor will your motorhome.

In the case of double-cab pick-up vehicles, the rules are relaxed so that where the payload exceeds 1,000 kilograms, it will still be classed as a van for fringe-benefits tax purposes. To calculate the payload, where the vehicle has a hardtop fitted, this is assumed to reduce the payload by 45 kilograms. Because of this, you should think carefully when considering fitting a hardtop to a vehicle with a rated payload of less than about 1,050 kilograms.

Are there other advantages to choosing a van?

If your van is only used privately for home-to-work travel, but not for other non-work purposes, this travel is ignored and no benefit-in-kind charge arises for you personally.

The favourable tax treatment isn’t the only bonus of a van. Vehicles that are classified as vans are also eligible for better treatment for capital allowances (including being eligible for the super-deduction capital allowance that’s currently available). You can also reclaim the VAT on the purchase of the van, in the same way you can for VAT incurred on other business expenses.

Talk to us about buying a company van

Choosing a van instead of a company car can often be a beneficial move, both from a personal and company tax perspective.

If you’re in the market for a company vehicle, we’ll help you understand the tax rules around the provision of company vehicles – so you make the right decision re buying a van or car.

The post Should you choose a company van over a company car? appeared first on Fortuous .

Back to Tax Basics: How does PAYE work?

Fri, 22 Apr 2022 13:03:00 GMT

Once you become an employer, you’ll need to set up a pay-as-you-earn (PAYE) scheme.

All businesses that employ people earning above the National Insurance (NI) lower earnings limit (£123 per week) must register with HM Revenue & Customs (HMRC) as an employer and operate their own PAYE scheme. This applies even if you’re a company owner taking a salary.

But what does ‘pay-as-you-earn’ actually mean?

Putting PAYE into action

In simple terms, PAYE is the process of deducting income tax from your employees earnings at source, and then paying the deducted income tax to HMRC.

Once you have employees, you’ll need to operate PAYE and run a regular payroll. This allows you to calculate your employees’ wages, make all the necessary deductions, pay their salaries and send the appropriate reporting and income tax to HMRC.

Talk to us about setting up your payroll and PAYE

You may think that you can take on ‘casual’ employees without putting them through a formal payroll – but this is a misapprehension. If you employ anyone over a rate of £123 per week, all your employees must be processed through a payroll system.

Running your own payroll may sound straightforward, but it can become more complex than it first appears. PAYE and NI rules change over time, calculations need amending and workplace pensions requirements add to the workload.

To remove the payroll and PAYE workload, it’s a good idea to outsource your payroll and get that extra helping hand. As an experienced accounting firm and payroll specialist, we can help you set up your payroll system and get your PAYE up and running.

Get in touch to talk about your payroll requirements.

The post Back to Tax Basics: How does PAYE work? appeared first on Fortuous .

Coping with the skyrocketing cost of living

Wed, 20 Apr 2022 13:00:00 GMT

Whether it’s refilling your petrol tank or paying at the supermarket checkout, the higher cost of living is hitting every household hard.

Across the world, everyday essentials are surging in price, up 7.2% year on year across the OECD. Unfortunately, experts predict that prices will keep rising for at least the rest of the year.

What can you do to try to keep up with the increasing cost of living? Here are our 12 top tips:

Look for ways to earn more

Cut back where you can

Invest in your future

If prices rise by 7% this year, it won’t be easy to increase your income by the same amount. But if you can increase your income by 5%, then make up the rest through savings, while also investing for the future, you can still come out on top once inflation settles down and prices stabilise.

Worried about money? Talk to us. We have years of experience through many economic cycles, including previous periods of high inflation – and we’re always here to help.

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Spring Statement 2022: Your summary of the key points

Mon, 18 Apr 2022 13:57:00 GMT

The Chancellor, Rishi Sunak, delivered his Spring Statement on 23 March. Faced with the task of creating a ‘strong economy’ for the UK, against the challenging background of high inflation, rising costs and the threat of conflict in Europe, he announced a raft of new measures.

So, what was in the Spring Statement for your business? And how will these announcements, government measures and new initiatives affect the business landscape in the coming year?

The challenge of creating a stronger UK economy

As we head into the second quarter of 2022, your business is facing a demanding economic landscape. Inflation is at a 30-year high, currently measured at 6.2%. There are significant supply chain issues to contend with. And fuel, energy and labour costs are increasing, leading to 73% of UK firms planning to raise their prices to cover rising costs.

What most UK businesses want is action from the government to ease these pressures. So, did the Chancellor’s mini-budget live up to these expectations?

Investment, innovation and growth

The Chancellor and the Office for Budget Responsibility (OBR) predict that the UK economy will grow by 3.8% this year. Projections are then for growth of 1.8% in 2023, and then 2.1%, 1.8% and 1.7% in the following three years. The OBR also now predicts that inflation will hit 7.4% by the end of the year. That’s a big hurdle to any kind of meaningful recovery.

What’s needed to counter this demanding economic landscape is a clear focus on growth and productivity for UK businesses. So, did the Chancellor announce the measures that will truly deliver this growth and innovation? There are measures here to support this aim, but it’s likely to be a slow and steady kind of growth.

Key measure announced include:

Helping hard-working people

The Chancellor acknowledged the need to support hard-working families and business as part of this statement. He reinforced the Government’s and Parliament’s support for the people of Ukraine in the Ukrainian/Russian war. But he also made it clear that this commitment to providing support may well begin to impact on the UK’s own economy, in time.

However, the Chancellor does have a plan for combating the cost-of-living crisis. Mr Sunak wants to take a ‘principled approach to cutting taxes’ and to be disciplined in making decisions that will build a stronger economy. He set out the framework for this ambition with a new three-point plan for taxation.

The Government’s plan is intended to:

Measures to support this include:

Talk to us about the impact of the Spring Statement

There’s no simple way to overcome the UK’s economic issues at a stroke. A wealth tax may have been a more immediate solution for raising public funds quickly – as was suggested by the Shadow Chancellor, Rachel Reeves, in her response. But the Chancellor has taken some positive, practical steps to tackle the cost-of-living crisis in this Spring Statement.

If you’d like to talk through the potential impact of the Spring Statement for your business, please do get in touch. We’ll help you work any incentives and tax reliefs into your financial planning, so you set the best possible foundations for 2022 and beyond.

Read a full breakdown of the Spring Statement from BBC News

Get in touch to discuss the Budget.

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What are the benefits of lifetime gifts?

Fri, 15 Apr 2022 13:55:00 GMT

If you’re thinking of gifting assets to your family and friends, it can be a good idea to do this during your lifetime. Giving the gift during your lifetime reduces the value of your estate – which, in turn, will reduce what’s later due in inheritance tax (IHT).

Understanding the rules around lifetime gifts helps you plan out your gifts in the most tax-efficient way, while passing on the assets you want to give to your nearest and dearest.

Which gifts are covered by the legislation?

The legislation covers gifts that fall immediately outside of your estate, as opposed to potentially-exempt transfers (PETs). These PETs can be added back in whole, or in part, if you (as the donor) don’t survive for seven years.

Gifts to charities and to political parties fall outside the estate and are ignored for IHT.

Other gifts that fall immediately outside of your estate for IHT purposes fall into three categories. The monetary limits are per tax year.

Excluded transfers

Gifts of property situated outside of the UK by non-UK-domiciled individuals have no adverse IHT consequences.

Ignored transfers

This covers gifts to maintain family members and covers spouses, civil partners and minor children (children over 18 if in full-time education). It can also include a dependant relative who is incapacitated because of illness or age.

Exempt transfers

Gifts on marriage up to £5,000 (to a child), £2,500 (grandchild or great grandchild) or £1,000 (any other recipient) are free of IHT implications.

Annual gifts not exceeding £250 to any recipient can be made, so this covers things like Christmas and birthday gifts. These gifts cannot be increased by using part of the annual exemption.

Other gifts up to a maximum annual exemption of £3,000 in total can be gifted each tax year. Any of the previous year’s allowance that was unused can be utilised in the following year, after the current year’s allowance is used.

What is a ‘normal expenditure out of income’?

There is another exemption for ‘normal expenditure out of income’. This has no fixed upper value but the gift(s) must satisfy three conditions:

Talk to us about using gifts to reduce your inheritance tax liability

If you think the total value of your estate may be above the IHT threshold, it’s advisable to talk to us about IHT planning. By putting the right plans in place, you can reduce the IHT impact.

If you’d like to talk about IHT planning, or would like to arrange a review of your particular circumstances, please do contact us for a chat.

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The Customer Buying Decision

Wed, 13 Apr 2022 13:54:00 GMT

It’s a common misconception that price is the most important factor when it comes to customers making a decision to buy. However, in the service industry at least, it’s simply not true.

These 5 things influence the customer’s buying decision.

1. Relationship.
The most important factor when selling a service to a customer is the relationship you have with them. The stronger your relationship, the more likely they are to buy from you. They’ll think of you first when they need the services you offer.

2. Accessibility.
Your accessibility will impact the likelihood of customers engaging with you. If your customers can’t easily get hold of you, or your response time is slow, they might assume you’re too busy or not the right person for the job. This doesn’t mean you need to be accessible 24/7 for your customers. Be visible and easy to find via your website and social channels, and ensure someone responds within a reasonable timeframe.

3. Proactivity.
The third factor is how proactive you are. Do you reach out to clients to check in? Do you offer exactly what your customers need? Are you keeping up with industry changes and ensuring your customers are also up to date? You can motivate your customers to act by being proactive.

4. Price.
Finally comes the price. If they know, like and trust you, and find you easy to deal with and proactive, they’ll likely trust that your price is fair. What’s more, they’ll see the value of working with you over someone else. The first three factors can help you minimise the price barrier.

5. Need.
The final factor is the customer’s need. They don’t know what they don’t know, and sometimes they don’t know that they need your services. It’s up to you to demonstrate the impact your services will have on their life. What’s in it for your customer?

So, to increase your customer retention rate, transaction rate, and transaction value, start from the top:

These three factors are all within your control. When you do this, you reduce the impact price has on your customer’s decision to buy. Your customers will remain loyal to your business, buy from you more often, and spend more when they do buy.

If you need help to integrate these factors into your sales process, get in touch!

The post The Customer Buying Decision appeared first on Fortuous .

Business tips – Scaling up your business and workforce

Mon, 11 Apr 2022 13:51:00 GMT

Scaling up your business isn’t about steady growth over time. It’s about having a clear strategy for quickly expanding the business to achieve full-scale hypergrowth.

Most startups grow organically, adding customers here and there and gradually expanding over time. Scaling up aims to accelerate this process, pushing your growth to move beyond that slow, organic pace. To achieve this, every element of your business model needs to be reviewed, refined and systemised – so you have scalability built into the company from the ground up.

Systemise your processes and build scalability into your DNA

Scaling up is a fast-paced, hectic and transformative process for any business. But with the right planning, strategy and funding, the return on your scale-up investment can be significant. Systemisation is the starting point and the driver of your efficiency.

The aim of your systemisation process is to make the business ordered, standardised and efficient. Look at how the business works. Write down every process and operational action. Then see how these processes can be made as lean and effective as possible, and aim to make these operations easily repeatable – so they can scale on demand as the business grows.

If any processes can be automated, automate them. Automation is a key driver of productivity and efficiency, so make use of any tech that could help you get more streamlined.

Remove yourself from the everyday running of the business

This may sound counterproductive, but a big goal of a scale-up strategy is to make yourself redundant from the everyday business. If all the operational elements of the business have to pass through you, as the founder and CEO, then that limits your ability to scale.

Remove yourself from the equation, so the business can grow without your everyday input at the operational level. This allows the business to function without you, leaving you with more time to focus on the high-level strategic work. That’s more time for business development. More time working on innovation. More time building relationships with customers and suppliers.

Expand your executive team and workforce

Once you’ve stepped back from the day-to-day tasks, your CEO role can become far more of a driving force behind the growth of the business. But you can’t do this single-handedly. You’ll need a close and trusted executive team to work with. Plus an experienced management team who you can delegate to. And an expanded workforce at all levels of the organisation.

As the startup evolves into scale-up, the business will become more complex and the workload will increase. To cope with this and keep the company running like a well-oiled machine you need a team who are ready for the task and fully on-board with your aims for the business.

Increase your operational infrastructure

Hypergrowth of the business means a greater volume of sales and work. To meet this demand, you urgently need to expand your operational infrastructure. That means looking at the size of your workspace. The amount of tech, equipment and machinery you have. And the ways you deliver your end product/service to your increased customer base.

The key here is to apply a LEAN methodology – keeping everything as simple and basic as possible, while also building in the capacity to deal with this increased volume of work. Get the operational procedures out of your own head and turn them into lean, seamless processes. And invest in the equipment and operational systems needed to cope with your increased output.

Look at investment and access to funding

To bring your scale-up plans to life, there’s a need to invest heavily in the future of the business. You’re likely to need new assets and equipment. Larger premises or multiple workspaces. More raw materials or stock. And a bigger workforce – which will mean a larger payroll each month.

You may be in the fortunate position of having plenty of spare cash in your reserves. But for most potential scale-ups, there’s going to be a need for external funding. This could mean you and your fellow directors putting money into the business. It could mean approach lenders and business finance providers to take out a loan. Or it could mean looking for private investors to plough money into the business. Whatever the source of this additional funding, you a clear funding strategy to work from – a funding plan that’s aligned with your scale-up plan.

Share your strategic goal and growth plan

For scaling up to be a success, everyone in the company must be on board with the idea. Make your growth aim and key numbers transparent, so the whole team is engaged and motivated by this common aim. And make sure you have a detailed scale-up plan that factors in the challenges of expanding your workforce, resources and operational infrastructure.

Think about:

If you’re thinking about scaling up your established startup, please do get in touch. We’ll help you build a viable scale-up plan, with costings, budgets and achievable targets to meet.

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Attracting and Retaining Talent – Important webinar details

Fri, 08 Apr 2022 13:47:00 GMT

We’re looking forward to seeing you at our complimentary webinar, Attracting and Retaining Talent , on DATE at TIME .

Don’t forget to:

Block it out in your calendar. Add the webinar details and join link to your calendar. If you have not received an automated email with your link to join the webinar, please let me know and I will arrange for it to be resent.

Workbooks. Download your workbook here . Hyperlink to workbook

Get set up early. To ensure you don’t miss a beat, we suggest you set up and join the webinar 15 minutes early.

Get thinking. Have questions you want answered? Let us know! We’ll be running an in-depth Q & A session at the end of the webinar.

If you have any questions about this webinar, please don’t hesitate to contact us.

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Quick tips: What are statutory payment rates?

Wed, 06 Apr 2022 13:44:00 GMT

When you’re an employer, there are various times where you’ll have to pay your employees during a leave of absence. They might be ill and in need of Statutory Sick Pay. Or they may be pregnant and about to begin maternity leave.

During these times, you have a legal duty to pay your staff member. And the amounts you pay, change from April 2022.

What are the statutory payments to be aware of?

There are a number of different statutory payments to have on your radar. As a business with employees on the payroll, you may need to make these payments at some point in the future. So it’s good practice to be aware of the requirements and the amounts that should be paid.

Payments include:

How will the statutory payment rates change?

Statutory payments for each week of absence commencing on and after 3 April 2022 change.

Helping you pay the right amounts

If you’re new to running payroll, it can sometimes seem like a big hill to climb. When it comes to statutory payments, you’ve got to make sure you pay the correct amounts and keep the appropriate records for all the different payments you’re making to employees

Where we already provide payroll services for you, the rate changes will be applied automatically. But if you’re looking to get additional help with your payroll, please do get in touch. We’ll be happy to help you get on top of the payments and the record keeping.

The post Quick tips: What are statutory payment rates? appeared first on Fortuous .

What is rent-a-room relief?

Mon, 04 Apr 2022 13:39:00 GMT

Renting out a spare room in your house is one way to bring in a little extra income. But did you know that you can claim rent-a-room relief rather than calculating the actual costs incurred.

Claiming rent-a-room relief will generally simplify the administration burden and reduce (or even eliminate) the tax charge. But what are the key rules to bear in mind?

What is rent-a-room relief?

Rent-a-room relief is a tax relief that’s available for people who rent furnished rooms in their home for residential purposes. It does not apply to unfurnished rooms, and does not apply where the rental is for an office or other business purposes.

Who can claim the relief?

The relief can be used by a resident landlord who takes a lodger into their place of residence – i.e. where you and your lodger live in the same property. You can also claim the relief if you’re providing guest-house or bed-and-breakfast (B&B) services.

How much relief can be claimed?

The amount of relief is capped at £7,500 (£3,750 each if split between two joint owners). If the income from the rented room (including amounts for goods and services like meals, cleaning and laundry) are below that level, no tax reporting is required and profit is treated as nil.

If the income from the room is above £7,500, taxable profit can be calculated by deducting either £7,500 or by deducting the actual costs and capital allowances that are applicable.

Talk to us about rent-a-room relief

If you’re thinking about earning some extra income from letting out part of your home, come and talk to us. We’ll explain the available reliefs, including the rent-a-room scheme, and can also outline the recordkeeping and filing that will be needed as a landlord.

If you think that the scheme may apply to you, we’ll be very happy to help.

The post What is rent-a-room relief? appeared first on Fortuous .

How an accountant supports your business development

Sat, 02 Apr 2022 07:50:00 GMT

As your accountant, we won’t just look after the financial side of your business, we can also advise you on the strategic side of your company, including the importance of business development as vital part of your growth plan.

Business development (BD) is what helps your company move from slow, organic growth to fast-paced, hypergrowth. And it’s only by putting the right drive and expertise behind your BD that you can turn your strategic ideas into real success stories.

So, how can we help you achieve this?

Talk to you about your strategic goals

The starting point for any kind of BD activity is to pin down your goals and aims as a business. When you know what you want to achieve over the coming months, it’s far easier to define a strategy for success. And that’s easier to do when you talk to an objective adviser, like us.

We can sit in on your board meetings, talk to your executive team and get a real handle on what makes the business tick. And, armed with this knowledge, we’ll work with you to drive the direction of your BD and find the best opportunities for you to focus on.

Help you create a clear BD strategy and plan

Having a defined set of BD goals is a good starting point. But to put this all into action in a productive way, you’re going to need a comprehensive plan for your BD projects.

Our years of experience advising business leaders and their teams really comes into play here. We know the best routes to take, the budgets that will be needed and the right tactics for bringing in more contracts, sales and partnerships. By putting these strategies into a clear plan, and linking this to agreed timescales, you have a BD route map to follow and action.

Introduce you to a broader network of business partners

We work with a wide range of businesses across many different sectors, industries and niches. By introducing you to our network of clients, we welcome you into a supportive community of like-minded business owners. And that’s excellent news when looking for new partnerships.

Whether it’s attending a local conference, an online webinar or one of our in-house client events, you’re going to meet new people, share new ideas and make the right connections. This is a great way to build alliances and work together with other local businesses. And when you’re well-connected, you set the very best foundations for your future BD activity.

Provide better routes to funding and investment

Whatever goals you’ve set for your BD projects, it’s likely that you’re going to need additional funding to finance this activity. Investing in your expansion, or new partnerships, is vital to getting a good return on your BD, so great access to finance is a definite bonus.

We’ll advise you on the most appropriate funding channels and how you can use these facilities to finance your BD plans. And we can also link you up with banks, lenders and business finance specialists – so you get the advice and finance you need to bring your BD to life.

Help you track and measure your BD performance

Meeting your BD targets takes time – and a whole lot of dedication. Measuring your BD performance over time, helps you stay on track and gives you a good indication of how well you’re tracking against your planned progress.

We’ll help you create the reporting and metrics you need, so you have clear data to track your progress over time. You can log your activity in your project management system, or your client relationship management (CRM) software, and keep clear notes on contacts made, relationships built and targets converted etc.

If you want to get more from your BD, please do get in touch. We’ll partner with you to put some real drive, experience and impetus behind your BD strategies.

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A strong strategy is the heart of your successful business

Thu, 31 Mar 2022 06:44:00 GMT

Businesses that have clear objectives or goals, robust accountability and a shared sense of purpose should always outperform those that just show up and go through the motions.

Strategy lies at the heart of most successful businesses. To achieve this you need to resource and execute with a clear purpose. Few businesses have a strategic plan or a robust planning process. Changing this situation should be a top priority! Here are two top tips for business owners.

1. Process Creates the Plan

Getting strategy at the heart of your success will require you to carve out some time, get a process started, and shake things up. There’s no better time to review and tweak your business model, future-proof compelling services, and to get your strategic building blocks in place.

Just as every good strategy has key elements, every good plan needs a step-by-step process. In fact, the process is often just as important as the plan itself. A strategic planning retreat with your core team is a great way to start the process – find a spot offsite to get the creative juices flowing and set an agenda.

2. Key elements of an effective strategy

The key elements in a good strategy normally incorporate:

It doesn’t need to be much more complicated than that, but do invest the time and effort in doing this right. A proactive, value-add strategic model will need fresh thinking, debate, research, and open conversations. Enjoy and embrace the process and you should end up with a good outcome.

Great planning requires a guide, facilitator, and/or professional expertise to be as robust as possible. We can help your business and guide you through the steps.

Putting strategy at the heart of your business activity should not only give your business greater direction and focus but lead to stimulating, profitable opportunities too. It’s time to get started!

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Business tips: Getting your operations up and running

Tue, 29 Mar 2022 06:09:00 GMT

If you are ‘pressing go’ on your new business, what are the key elements to have in place before you begin trading?

The complexity of your operational model will vary greatly, depending on the kind of business you’re setting up. A small two-person design agency will have a simpler operational set-up than a wholesale food production business, for obvious reasons. So, this stage of the journey is about pinning down those key operational needs and getting an effective strategy together for how this business is going to work, in the real world.

Find your premises or workspace

Every business needs some kind of workspace, whether it’s your own home, an office or a factory space. This is the place where the actual work will be done and the central hub of your operations, so put some careful thought into what space will be needed. In terms of location, the type of business will also dictate whether you can be based where you are, or should you be where your customers are.

Our two-person design agency could feasibly operate from a co-working office, a startup incubator space or from a spare room/garage/summer house in the founder’s home. The wholesale food production business, however, will need factory space to house it’s production equipment, a chilled store for the food, an office for the admin staff and managers, and space for delivery vehicles and incoming supplier deliveries etc.

Buy your equipment and tech

You’ll have set aside some of your initial funding to buy the basic equipment and technology needed for the business. This will include all the machinery, plant, office furniture, IT, computing and telecommunications equipment required to run the business, plus any vehicles you’ll need.

Once you have your premises ready to roll, you can start moving your equipment in and actually ‘setting up shop’ in your brand new workspace.

Source your key suppliers

Most businesses will rely on some form of supply chain to keep the business ticking over. The design agency will probably need paper, printer ink and (no doubt) a lot of coffee to stay operational. And our food production business will need raw ingredients, cardboard boxes and product packaging to be able to produce their key products.

Your next step is to source the suppliers you need and set up contracts with these external companies. You may have pre-existing contacts in the industry, or you may be starting with a clean slate. EIther way, it’s important to build up a trusted supply network, where you’ve negotiated a good price and decent payment terms. Ultimately, your business can sink or swim based on the stability of your supply chain, so these relationships will be crucial to your success.

Get the logistics and delivery elements in place

Getting the finished product/service to your end customer is the main goal of any business, so the final piece of your operational puzzle will be sorting out your logistics and delivery systems.

For a small service-based startup, like the design agency, the end offering is likely to be either wholly digital or a mix of print and digital. The end delivery process is relatively straightforward and will mostly consist of getting the final signed-off assets to the customer. For a complex manufacturing or production startup, like the food business, the delivery systems will be a vital part of their offering. As a food business, you’ve got to meet all relevant food hygiene timescales and standards, and get your fresh, high-quality food products safely to your customers.

A delivery system should be customised to each company’s specific needs, so it’s sensible to put plenty of thought into making this sysem efficient, cost-effective and productive.

If you’re at the early stages of planning out your business idea, please do get in touch. We’ll help you get your operations in order and properly aligned with your business model.

Talk to us about your startup plans.

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How the increased minimum wage will affect your business costs

Sun, 27 Mar 2022 08:54:00 GMT

Business costs are on the rise as we near the second quarter of 2022. Supply chain costs are increasing, energy prices are rising and labour costs are getting more expensive. These soaring costs mean higher expenditure and lower margins on your products and/or services. If left unchecked, that could mean a dip in your predicted profits for the quarter.

The good news is that by acting now to manage these increases you can stay on top of these costs. And with a proper financial plan, you can keep your business turning a profit.

A rise in the National Living Wage and Minimum Wage

A rise in the National Living Wage (NLW) and the National Minimum Wage (NMW) was announced in Autumn Budget 2021. This increase set the minimum wage back on track to reach the Government’s target of two-thirds of median earnings by 2024.

The size of your overall wage increase will depend on the age of your employees and whether they’re currently working as part of an apprenticeship scheme. However, the increase in your payroll costs is definitely something to factor into your financial planning for the year.

The new NLW and NMW rates from 1 April 2022 will be:

The impact of inflation

In addition to the rising cost of labour, inflation is forecast to put upward pressure on everyday items. UK inflation is forecast to hit 8% in April 2022, and that’s likely to increase your general running costs and the price of materials. Petrol prices are up, for instance, and Brexit and the resulting supply chain issues have driven up the cost of many imported products.

Time to review your pricing?

Is it time to put your prices up? Ideally, your business should increase costs by a tiny amount each year, rather than by a big jump every five years, for instance. Small increases help prevent price shocks for customers, and keep your business in line with the rest of the market.

Can you also cut costs?

If you don’t think increasing your prices is an option, or you still need to make more of a change, you may need to cut back your spending. We look at your business line by line, so we can help you identify areas where you might be able to trim the fat.

Talk to us about managing your business costs

It’s going to be a challenge to keep ahead of rising business costs in 2022. But with the right mindset, planning and forecasting, you can stay one step ahead of the curve.

Talk to us about your ongoing costs. We’ll review your business expenses to see where savings can be made and where you can push your margins to remain profitable.

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Spring Statement 2022: Your summary of the key points

Fri, 25 Mar 2022 09:49:00 GMT

So, what was in the Spring Statement for your business? And how will these announcements, government measures and new initiatives affect the business landscape in the coming year?

The challenge of creating a stronger UK economy

What most UK businesses want is action from the government to ease these pressures. So, did the Chancellor’s mini-budget live up to these expectations?

Investment, innovation and growth

Key measure announced include:

Helping hard-working people

The Government’s plan is intended to:

Measures to support this include:

Talk to us about the impact of the Spring Statement

Read a full breakdown of the Spring Statement from BBC News

Get in touch to discuss the Budget.

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What are the benefits of lifetime gifts?

Wed, 23 Mar 2022 11:20:00 GMT

Understanding the rules around lifetime gifts helps you plan out your gifts in the most tax-efficient way, while passing on the assets you want to give to your nearest and dearest.

Which gifts are covered by the legislation?

Gifts to charities and to political parties fall outside the estate and are ignored for IHT.

Other gifts that fall immediately outside of your estate for IHT purposes fall into three categories. The monetary limits are per tax year.

Excluded transfers

Gifts of property situated outside of the UK by non-UK-domiciled individuals have no adverse IHT consequences.

Ignored transfers

Exempt transfers

Gifts on marriage up to £5,000 (to a child), £2,500 (grandchild or great grandchild) or £1,000 (any other recipient) are free of IHT implications.

Annual gifts not exceeding £250 to any recipient can be made, so this covers things like Christmas and birthday gifts. These gifts cannot be increased by using part of the annual exemption.

What is a ‘normal expenditure out of income’?

There is another exemption for ‘normal expenditure out of income’. This has no fixed upper value but the gift(s) must satisfy three conditions:

Talk to us about using gifts to reduce your inheritance tax liability

If you think the total value of your estate may be above the IHT threshold, it’s advisable to talk to us about IHT planning. By putting the right plans in place, you can reduce the IHT impact.

If you’d like to talk about IHT planning, or would like to arrange a review of your particular circumstances, please do contact us for a chat.

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Retail’s online boom: Are you getting a slice of the action?

Mon, 21 Mar 2022 06:34:00 GMT

In 2021, retail e-commerce sales amounted to approximately 4.9 trillion U.S. dollars worldwide, according to research by Statistica. At the same time spending at physical stores has dropped.

While that was strongly influenced by Covid restrictions and distancing measures, the trend is clear: online shopping is gathering steam.

You should be getting a piece of the online pie

Does your business provide a great user experience for your online customers?

These are some absolute basics, so if your online presence isn’t clearing these low hurdles, you should talk to an expert about how to improve it.

How much should you spend?

Do get in touch, we’re here to help.

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The Customer Buying Decision

Sat, 19 Mar 2022 11:09:00 GMT

It’s a common misconception that price is the most important factor when it comes to customers making a decision to buy. However, in the service industry at least, it’s simply not true.

These 5 things influence the customer’s buying decision.

So, to increase your customer retention rate, transaction rate, and transaction value, start from the top:

If you need help to integrate these factors into your sales process, get in touch!

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Setting up the compliance foundations

Thu, 17 Mar 2022 06:46:00 GMT

To trade as a business, you need to meet the right compliance requirements. It’s certainly not the most exciting part of creating a business, but setting up the right legal, accounting and tax compliance foundations ensures that you’re doing everything by the letter of the law.

Here are the main compliance steps to think about, and why they’re so important to the smooth running of your business.

Decide on a legal structure for the business

First off, you’ll need to make a decision about the legal structure of the company. There are two key choices here – incorporated (a limited company) or unincorporated (usually either a sole trader or a partnership). The key difference here is around liability. In other words, do you want your business to be a limited company, where you and the business are treated as separate legal entities? Or do you want to be unincorporated, like a sole trader, where you and your business are seen as one single entity.

Most startups will opt for the incorporated limited company route, keeping your personal and business finances separate and lowering your personal liability and risk.

Open a business bank account

To trade, take payments and pay your suppliers, you need to have a business bank account that’s separate from your own current account. This helps to create a tangible divide between the money you’ve generated from the business, and your own personal cash.

Most high-street banks won’t let you use a personal current account for business purposes. Banks will offer a variety of different business accounts, with varying levels of fees, overdraft levels and additional business features. Set up the business account and then use this account for ALL transactions going in or out of the company.

Set up a bookkeeping and accounting system

It’s a legal requirement for your limited company to keep adequate records and to submit annual statutory accounts. To be able to meet these requirements, it’s essential that you have a bookkeeping process and a reliable accounting system in place.

There’s a dazzling choice of different cloud-based accounting platforms aimed at the ambitious startup owner. Xero, QuickBooks, MYOB and Sage are big names in this space, and all offer easy-to-use systems that make the accounting process relatively straightforward. It’s a good idea to engage an accountant, right from the start, to get the best possible accounting advice.

Register for the relevant business taxes

Tax is an unavoidable part of running any business. It’s mandatory for you to register for the relevant business taxes, and you’ll also need to factor in that a certain percentage of your startup’s profits will end up going to the tax authorities at the end of each financial year.

If you’ve opted for the limited company route, you must register for corporation tax in your home territory. Corporation tax is paid based on a percentage of your year-end profits, once reliefs and other allowances have been taken into account. Approximately a quarter of your end profits will end up being paid over in tax, so it’s imperative that you put this money away in a separate tax accounting, or ring-fence it in your accounts, so you have the money to pay the bill at year-end.

Other taxes to register for include:

Get in touch to talk through your compliance needs. We’ll help you understand which taxes apply and how you register for them.

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Business tips: Outlining your ideal customer

Tue, 15 Mar 2022 07:20:00 GMT

Your perfect customer may well evolve and change over the life of the business, but it’s important to define your initial customer audience right from the outset.

Who is the end customer for your products and/or services?

Whenever you create a new product or service, you should have a very specific idea of who your target customer will be. Understanding that customer profile is incredibly important.

What are the key needs of this demographic

A good business model provides a solution to a given customer need. Understanding that need in forensic detail is what gives you the power to customise and tailor your offering.

How does your product/service meet these needs?

Knowing your customers’ key needs is only half of the conundrum. What you have to do now is offer a product or service that actually MEETS these needs, at a price the customer will pay.

How do you intend to reach this customer audience?

To sell your products, customers must be aware of your brand. So, an important part of your customer research will be understanding which marketing and promotional channels to use.

Bringing it all together into a customer profile

By combining all the information you’ve gathered into one concise customer profile, you give your sales and marketing team a very clear picture of who to target.

This would be the customer profile in our food delivery example:

If you’re at the early stages of planning your customer audience, we can help you define your business strategy accordingly.

Talk to us about your startup plans.

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What is rent-a-room relief?

Sun, 13 Mar 2022 07:24:00 GMT

Renting out a spare room in your house is one way to bring in a little extra income. But did you know that you can claim rent-a-room relief rather than calculating the actual costs incurred.

Claiming rent-a-room relief will generally simplify the administration burden and reduce (or even eliminate) the tax charge. But what are the key rules to bear in mind?

What is rent-a-room relief?

Who can claim the relief?

How much relief can be claimed?

If the income from the room is above £7,500, taxable profit can be calculated by deducting either £7,500 or by deducting the actual costs and capital allowances that are applicable.

Talk to us about rent-a-room relief

If you think that the scheme may apply to you, we’ll be very happy to help.

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Business tips: Hiring employees for your startup

Fri, 11 Mar 2022 07:27:00 GMT

When setting up your new venture, the people you hire may well become the most important assets in your business. They’re your trusted workforce, the face of your new brand and the people you’ve entrusted with getting your business idea out into the real world.

Because of this, it’s vital that you choose the right talent, the right personalities and the right mix of people for your team. Making a mistake with your hiring at such an early stage can really hold you back, so be sure to put some real thought into who you need on the team.

Consider which roles you need to start operating

Getting your startup to the ‘Minimum Viable Product’ or MVP stage is a big turning point for the business. From a staffing point of view, you need to think about what roles will be needed to get you to this stage – so you have enough hands on deck to really become operational.

Could you do everything yourself and become a real jack-of-all-trades? Or will you need sales people, marketers, operations managers and shop-floor staff to get this thing going?

In an ideal world, you obviously want a big, effective team to kickstart your operations, but payroll costs and your available funding will put a limitation on this. Think about which roles you REALLY need and start off with a skeleton crew (but without the need for a ghost pirate ship!).

Decide whether to outsource or go in-house

Once you have a list of your core roles and skeleton team, you then have another important decision to make – which of these roles will be full-time, in-house employees? And which roles will be part-time, or outsourced to freelancers and contractors?

Having full-time employees on the books gives you a permanent resource, with a team who are wholly focused on bringing your MVP to market. But employees are costly. Aside from monthly wages, you need to pay for holiday pay, sick pay and a staff pension scheme. A more cost-effective option can be to use freelancers at the early stages of the business, hiring in talent and resources as and when you need them.

Search your network for talent

Knowing the roles you need is one thing, but actually FINDING the talent is another. Use your existing business and social networks and put out the word that you’re hiring. Word of mouth can be a great way to find people, but make sure that applicants fit the stated criteria.

Writing short, clear job descriptions for each role is a good way to outline the position, attract the best candidates and filter out the weak applicants. Using a recruitment agency or a jobs website helps to spread your net wider and also takes some of the admin workload away. Once you have a shortlist of candidates, it’s time to start interviewing.

Check that applicants share your vision and values

A job interview is obviously about more than just running through the skills on a CV. The successful candidate is going to be working very closely with you, so you need to know that they can do the job but also that they’re a good fit for the team.

Do they share your vision for the product/service and the future of the company? Do they seem driven, with the right kind of can-do attitude? Are they engaged by your company values and the WHY behind your business model? And, vitally, do you get on with them as a person?

Having the best mix of personalities and talent in a team is so important. Getting the mix right creates a tight, well-focused team. Get it wrong and you’re looking at disharmony, a lack of productivity and a team that’s just not going to deliver the energy and value you need as a founder.

Measure performance and fit

Once you’ve hired your key talent and formed a team, the challenges don’t stop. As you all pull together to get to that all-important MVP stage and beyond, you’ll need to have ongoing performance reviews. This includes checking in on how the team is performing as a group, whether there are any teething problems to iron out and how individual employees are tracking against their personal remit, targets and goals.

It’s not an easy ride, but with a positive, well-engaged team behind you, you give your new venture the best possible chances of success, growth and long-term prosperity.

If you’re at the early stages of planning out your business idea and staffing, please do get in touch. We can talk to you about your operational plans, the core staff that will be needed and the most efficient ways to source the talent you need.

Talk to us about your startup plans.

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High inflation: What does it mean for your business?

Wed, 09 Mar 2022 13:32:00 GMT

High inflation is hitting businesses and households hard in 2022. Across the world, inflation is running high, thanks to factors like pandemic disruptions, monetary stimulus and supply-chain issues.

You’ll see the effects of inflation at the supermarket and the fuel pump – and in your business.

Eroding each dollar’s buying power

Inflation increases prices, which eats away at the buying power of your dollar. For business owners, that means you’ll encounter higher costs from your suppliers. Materials are more expensive, transport has become far more costly, and basics from office supplies to utilities are all rising in price.

In addition, your staff are probably asking for pay rises. For you and your employees to keep up with inflation, your income needs to increase by at least the same amount as inflation. To achieve that could mean a seriously large wage bill increase for your business.

Rising interest rates

Central banks try to keep inflation at a sustainable level. They react to high inflation by raising their interest rates, which slows the economy and puts a handbrake on inflation. As a business owner, you’ll see this reflected in a higher cost of borrowing, and the same will apply to your home loan.

Inflation does have some side-effects that could be positive for your business. First, it tends to push up the value of big-ticket assets that your business might own, like property or plant. Second, it makes debts seem smaller – your debt amount stays the same but hopefully your income rises.

It’s time to raise your prices

With inflation causing you to spend more, your business will also need to raise prices. This is always a sensitive topic to tackle with clients and customers, but at least the way has been paved for you by prices rising across almost every single sector and industry.

If you’re wondering how much you need to increase prices in order to keep up with inflation or maintain your margins, do give us a call. We can run the numbers, test out scenarios and figure out a sweet spot that will work for your business. We’d love to help.

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Company year-end preparations: time to get ready

Mon, 07 Mar 2022 15:32:00 GMT

As your company year-end date gets closer, there are a number of administrative and financial tasks to start planning for – so it’s a good idea to get yourself organised and ready.

There are several things to check, either on the year-end date, or before the end of your company’s financial year. Some tasks are simple administrative processes, while others involve a deeper dive into your accounts. But, on the whole, this is about getting on top of the planning and making sure your year-end is as hassle-free as possible.

The benefits of good year-end planning include:

A checklist for your company year-end tasks

We’ve highlighted the main year-end tasks to add to your to-do list, broken down into admin, tax-driven and cosmetic tasks – all aimed at a stress-free year end process.

Primarily admin issues :

Primarily tax-driven :

Cosmetic/other :

Talk to us about preparing for your year-end

The better prepared you are, the easier your year-end will be. So, there’s real value in running through the checklist above and getting your finances ready for the close of the current year.

As your accountant, we can help you get your numbers in order and advise you on any elements where you might need some help, or have queries.

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Quick Tips: Update on HMRC interest and penalties

Sat, 05 Mar 2022 14:02:00 GMT

Did you know that if you don’t pay your taxes on time, HM Revenue & Customs (HMRC) can charge you interest on your late payment?

HMRC can use its powers to charge interest on late payments of tax and pay interest on overpayments you’ve made to them. And those rates change from 21/02/2022.

How does interest on late payments work?

If you’re late paying your taxes, HMRC will charge interest from the original due date of the payment until the date payment is received.

This applies to most taxes, the main exception being a rate of 1.25% in respect of late payment of quarterly corporation tax installments, for businesses with taxable profits over £1.5 million.

How are the rates changing in 2022?

From 21/02/2022, the rate on late payments and overpayment is increased to 3.0% p.a. Earlier changes increased the rate to 2.75% from 04/01/2022 and 2.6% from 07/04/2020.

The rate HMRC will pay on refunds and overpayments of tax remains at 0.50%. This 0.50% rate has been in place since 29/09/2009.

What happens if I can’t pay on time?

There may be times where you owe tax and simply can’t pay on time. As long as you agree a formal ‘time to pay’ arrangement with HMRC then the interest rate they charge is relatively low.

Simply not paying, without having any agreement in place, is a bad idea. HMRC may charge you a penalty, on top of charging interest on your late payment. Self-assessment tax, for example, will incur a penalty of 5% of the tax for 2020/21 (due by 31/01/2022) if it’s unpaid by 01/04/2022. There can then be a further 5% (minimum £300) penalty if any tax is still left unpaid by 01/08/2022.

How can we help you manage these payments?

If we’re already calculating your taxes, we’ll advise you of the amount that’s due and the payment deadline, as a matter of course.

If we’re not already acting on your behalf, we can still help. You might be unsure of the deadlines for the taxes, or need help working out what you’ll need to pay. We’ll help you run projections to check if you have the funding to make these payments. And we can liaise with HMRC to put ‘time to pay’ arrangements in place.

When it comes to tax, it’s always best to talk to us sooner rather than later.

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Do I need a remuneration strategy?

Wed, 02 Mar 2022 15:30:00 GMT

Because of this, it’s important to have a clear and workable remuneration strategy – which clearly sets out how and when you will be able to take funds out of the company.

Building a tax-efficient remuneration strategy

Once your business is financially stable, you’ll no doubt have thought about how to take income from the company, particularly how to split income between salary and dividends.

So, what are the main considerations when creating a remuneration strategy?:

Talk to us about your remuneration strategy

We’ll help you to review your business and private wealth situations and generate a remuneration strategy that’s tax-efficient, straightforward and well-suited to your cash needs.

Get in touch to talk through your remuneration plans.

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What’s your net worth?

Mon, 28 Feb 2022 11:25:00 GMT

Calculating your net worth can be a quick and easy way to get an outline of your financial position. By working out your net worth each year, you can get a sense of whether your finances are going in the right direction.

Tracking your net worth can also help you focus on the big picture during those times when it seems like you’re going backwards at a rapid rate – when your car or an appliance breaks down or you dip into your savings to cover an essential but unexpected expense.

How to calculate your net worth

Net worth is assets minus liabilities. The simplest way to work out your net worth is to jot down the value of your assets and then all your debts. Subtract the total value of the debts from the total value of the assets and that’s your net worth.

What should your net worth be?

Net worth tends to increase over time, and there are various formulas saying what you ‘should’ be worth for your age. For example, one estimate says that by age 30 your net worth should be half of your annual income; by 40 your net worth should be double your annual income; by 50 it should be four times your income; and by 60 it should be six times your annual income.

But rather than comparing yourself to a formula, net worth is more useful as a way to monitor your progress. If it’s increasing steadily over time, you’re doing something right.

Want to talk about hitting your financial targets?

If you’d like to talk about reaching your financial goals, either personally or in your business, get in touch. We’ve got lots of ideas and strategies for maximising your income and minimising your costs, and we’d love to hear from you.

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Business tips: Writing a mission statement

Thu, 24 Feb 2022 08:52:00 GMT

You’ve had your initial business idea and written a plan. But do you know WHY you’re creating this business, or HOW you’ll deliver your end product/service? What will the company’s underlying purpose be and how will your core values drive the business?

To get these crucial elements ironed out, it’s a good idea to write a ‘mission statement’ for your startup – a short summary of the aims and values of your business.

WHAT does your business do?

The first thing to pin down is what the business actually does – i.e. at the most basic level, what is the output of your new business idea, and what is its purpose.

Defining this ‘WHAT’ element might sound simple, but describing it in a clear and concise way will help you to begin the process of completing your mission statement. A bicycle manufacturer might define their WHAT as ‘making quality bikes at great prices, for adults and kids to enjoy’. Whereas a creative agency might define their WHAT as ‘delivering creative solutions to our business clients’ design problems’.

HOW does your company do what it does?

Next, have a think about HOW you achieve what you do. How do you deliver your product or service to customers, what operations are involved and what makes your way different?

The bicycle manufacturer might have a big focus on making hand-made bikes, so their HOW could be ‘We make our bikes by hand, and to order, using our 25 years’ experience in the industry to deliver the best possible quality’. While the creative agency might say ‘We use the latest design approaches, coupled with cutting-edge design software, to bring our clients’ design to life’. Both of these statements explain the underlying operational processes in the business, and how each business delivers its product/service to the end customer.

WHY does your company do what it does?

Most businesses are great at defining the WHAT and HOW elements of their business model. ‘I make Product A using Process B’. But it can be a lot harder to define WHY you’re doing this.

Ultimately, the WHY is the most important element of your mission statement. In essence, you’re describing what drives you to do what you do. What are your big aspirations for the business, and what do you want to achieve? For the bicycle manufacturer, the WHY statement may be ‘We want to encourage our community to get on their bikes, become more sustainable and stay healthy’. And the agency may define their WHY as ‘We want to build innovation into everything we do, bringing fresh ideas to our clients’ design’.

What are the core values driving your enterprise?

Your personal values as a founder might not sound like a crucial element to think about. But any new startup is a reflection of the ideas, ambition, drive and values of its founders.

The ways in which you behave, the vision you provide for your team and the ways in which you interact with your first customers will all underline the foundation values of your new business. Think about what drives you. Is it profit and money? Or do you want to change the world in positive ways? Or provide employment and opportunities for your local community?

Bring it all together into your mission statement

If you’ve answered those four questions, then you have everything you need to create a comprehensive and useful mission statement for the business.

For example, for the bicycle manufacturer, it may look like this:

Happy Spokes Bicycles Ltd:

With your mission statement written, and a business plan under your belt, you have the best possible foundations on which to build your business enterprise.

Your mission statement can set the foundations for your company’s future.

Talk to us about your startup plans.

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Marketing and promoting your new business

Sun, 20 Feb 2022 08:52:00 GMT

Even with the best products and/or services in the world, you won’t make many sales if your intended customers don’t know about your business. To raise awareness of your brand and to kickstart your sales process, you need to start marketing and promoting the company.

Sales and marketing doesn’t have to be complicated, but it is important to have a clear idea of your customers’ preferred channels and how you can engage with them in these places.

Create a website and an online/digital presence

We live in a digital world, so having a presence in the digital space will be vital – somewhere your potential customers can engage with you and begin buying your products.

Start with a website of some sort – a place that will become your digital shopfront and the hub around which your marketing will function. For small micro businesses, this could be as simple as creating a Facebook business page, but most serious small businesses should invest in a full-scale website. Buy a domain name for the company (the companyname.com part) and work with content writers and web designers to create an engaging online site for the business.

Focus on your key messages, tell me (the customer) exactly what you do, and make it as easy as possible to use and navigate the site.

Set up a sales team and start engaging with customers

To push your sales engagement, you need a sales team – or at the very least, one person who’s focused full-time on sales and business development.

As a new business, you’re entering a market where (at present) most of your target audience are unaware of your products/services. With a sales team in place, you can start to field enquiries, arrange product demos, book meetings with targets and begin the process of engaging with your chosen customer audience.

People buy from people, as the saying goes. So, building relationships, extending your network and filling your sales funnel will be an essential part of the company’s growth.

Make the most of your social media presence

Your website will be your main digital hub, but having a social media presence is also a critical part of building engagement and creating meaningful relationships with your customers.

Facebook, Twitter, Linkedin and Instagram are all good social media platforms to consider. What’s important is to research where your target audience hangs out online. For example, if your ideal customers are all on Facebook, there’s no point posting much content on Twitter. Choose the most relevant social platforms and use these accounts to post regular content and engage with your audience. Social media is NOT a direct sales channel, but it IS a great place to build customer relationships and promote the values of your brand.

Other ways to raise awareness of your brand

With a website, marketing team, sales team and a solid group of followers on social media, you set some solid foundations for getting your startup’s marketing off the ground. But these are just the basics and there’s LOTS more you can get involved in to boost your marketing.

For example:

As your startup grows, your sales and marketing activity will grow too. But getting the basics right at this early stage will get you off to a positive and productive start.

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How much time should you spend on strategy?

Fri, 18 Feb 2022 15:36:00 GMT

Whilst we’re here to support you when unexpected hiccups occur, we can do so more effectively if we help you get ahead of risks and opportunities in your business.

Time spent working – is not created equal.
There’s a misconception that being busy is automatically being effective.

So, how much time should you spend finetuning your strategy and execution?
We believe best practice for business starts with us providing a 60-minute complimentary meeting.

Then, we can support you to create your annual Business Plan and undertake annual forecasting – two critical services to capture and support the achievement of effective and realistic goals.

This commitment is roughly a total of 20 hours per year (including travel, if any) or just 1% of your working time, assuming the average business owner works 2,000 hours a year in their business.

Get in touch if you’d like a 60-minute complimentary meeting.

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5 tips for chasing invoices without annoying your clients

Tue, 15 Feb 2022 16:11:00 GMT

When you’re a small business owner, sole trader or freelancer, asking for payment on overdue invoices can be a delicate matter. Without an accounts person or department, sometimes you’re trying to secure new work and chase invoices from the same person. That can be an awkward tightrope to walk.

Here are five tips for chasing payments while maintaining customer loyalty:

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Defining your business idea

Mon, 07 Feb 2022 10:10:00 GMT

Having that Eureka moment when you cook up a great new business idea is a great moment. You’ll be full of ambition and eager to begin building your startup. But once you’ve had that initial rough idea, how do you assess and plan out your business idea to make sure that it has legs?

For a startup, the key thing is to define what your idea brings to the marketplace. This way, you know WHY you’re starting this venture and – crucially – whether it’s a viable business model.

Research the existing market and do your homework

A first vital step is to clarify the business purpose of your idea. What does it do, how does it cater to an existing or future need in the marketplace and who will your customers be?

Think about what your product or service delivers to the end customer, and why this customer should part with their hard-earned cash to purchase your offering. Design your product/service so that it caters to a customer need that you’ve identified, and make sure your business offers the best solution to that need. In a crowded marketplace, you’ll need to stand out.

Check out the competition

Once you know you know the aim of the new business, it’s sensible to start researching your competitors in this space and how your idea compares.

If you’re bringing a brand new innovation to market, you may well be the first entrant in the market. But for most business ideas, there’s likely to be another competitor out there – and they’ll be eager to take your market share. Research your closest competitors and look closely at their products, services, prices, and their approach to marketing and customer service.

Do the numbers add up?

Getting a great understanding of your financial model is critical to your success. Ultimately, if your idea can’t generate revenue, cashflow and profit, it won’t sustain a real-world business.

A good starting point is to work out your initial costs. Add up your estimated costs for producing your new product, or delivering your service. Include all your raw materials, your overheads, your labour costs and your delivery expenses etc. Then think about the margin (profit) you need to make per unit, and the price you’ll charge to the customer. If you can make enough sales at the right profit margin, will you break even? And will you make a profit?

Write a rough business plan

Every startup needs a business plan behind it. This will be the route map that defines your journey, sets out the key targets and drives the course of the first year or two of the company.

Important items to include in your plan include:

As the old saying goes, ‘Fail to plan, plan to fail’. So, putting time and effort into a well-thought-out business plan could well be the answer to your future prosperity.

If you’re at the early stages of planning out your business idea, please do get in touch. We can help you test the viability of your business model and start the planning process.

Talk to us about your startup plans.

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Alternative social media platforms for marketing your business

Mon, 31 Jan 2022 11:40:00 GMT

When you start using social media to market your business, it’s important to focus on the big hitters – social media giants like Facebook, Instagram or LinkedIn are all obvious target platforms (depending on your business). But it’s worth considering other platforms that may well suit the needs of your brand and your end customers.

Exploring the younger entrants to the social media market, can help you to get a foothold with a new group of followers – and that’s excellent news when you want to broaden the reach of your marketing activity.

Key social media platforms to explore

The social media platforms that will work best for your brand will be determined by a variety of different factors. Your industry type, your business size and your chosen target customer will all impact on the kind of platform that delivers the best return.

Corporate business-to-business (B2B) companies may get more out of LinkedIn, while a retail business-to-consumer (B2C) company may find it has a better impact on Facebook or Instagram. By diving into some of the lesser-used or emerging new social platforms, you can help your brand to stand out and attract a new audience.

Here are some alternative social media platforms to explore:

TikTok

TikTok began life as an app dedicated to recording and sharing 15-second video clips (similar to the now defunct Vine app, or the Reels feature in Instagram). The platform now offers both 15 and 60-second video options, and the ability to upload and edit external videos, greatly increasing the possibilities for marketing.

The TikTok platform has 689 million users in 2021, with the vast majority in the 18 to 24 age bracket (although people can join the app when they are 12). If you’re aiming your products/services at a teenage and young adult market, TikTok is an important platform to have a presence, and investing in TikTok advertising can be one way to expand your reach.

Snapchat

Snapchat started out in 2011 with the unique proposition of being a ‘disappearing picture app’, allowing users to share images that then disappeared once viewed. Over time, the app has gained real popularity with the younger generation, and has become more of a messaging and sharing platform for the 18-24 age group.

If you’re looking to target a younger demographic, Snapchat is a good platform to experiment with, allowing you to create a brand account, interact with your core audience and run live events, share stories and add ‘moments’. As with many of the bigger platforms, Snapchat offers paid advertising , giving you a new ad channel to explore and test out.

Pinterest

Pinterest launched in 2010 as a way for users to ‘pin’ images that they liked to a virtual mood board. This simple concept of creating a scrapbook of online images and content has expanded into a full-blown social media and shopping platform, with 478 million users worldwide.

Pinterest users often to pin and save items they intend to buy in the future, creating a virtual shopping list or ‘wish list’. You can capitalize on this by creating a presence on the platform and making it easy for potential customers to pin and purchase your goods. Pinterest Ads are a useful way to increase this presence and generate revenues from the platform

Clubhouse

Clubhouse is described as ‘an audio drop-in app’, and is unusual in that it focuses purely on delivering a social media experience based primarily in the audio realm.

At present, Clubhouse is invite-only, so you’ll need a friendly associate to invite you onto the app. But with 10 million+ users, Clubhouse’s audio-based rooms and live podcast-style approach could be a useful tool for a brand that’s looking to run advice sessions, boost its thought leadership and connect with a B2B or B2C audience.

Start exploring the benefits of social media

Social media channels have become a core part of any digital marketing strategy, so it’s important to explore, experiment and try out a range of different platforms

Ultimately, the key is that your brand should have a social media presence wherever your audience tends to congregate. If Snapchat and TikTok are the apps your customers use, this is where you should focus your efforts. And if LinkedIn and ClubHouse is where your top-level business audience hangs out, this is where you need to raise your presence.

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How’s your work-life balance?

Wed, 26 Jan 2022 15:27:00 GMT

It’s great to be the boss – you can work any hours you like, right?

Unfortunately, for many business owners, that means long hours, plenty of stress, and very few breaks and holidays.

A survey done by Statistics NZ found that:

After lockdowns and restrictions due to COVID-19, you might find yourself thinking about your priorities – at least, that’s been the case for a lot of business owners. This year work-life balance overtook salary as the main consideration for job-seekers, in this survey.

Running a business and having a life

Can you run your business effectively and still have enough time left over to do the things you love? You’re the best judge of how much time your business needs, but don’t neglect your wellbeing. If you would like to take back some personal time, you could consider:

Working towards a balance

If you really can’t work less right now, try to build your business with a better balance in mind for the future. It’s important that you can step back at some point to take a holiday, travel, or spend time with family. Being tied to your business for more than 60 hours each week isn’t a sustainable way to take care of your health and higher profits aren’t worth that sacrifice.

Also, any business that doesn’t allow the owner to step away is very hard to sell and worth far less than one that can run independently!

We might have some ideas

Whether you want to improve your work-life balance now, or build your business to achieve it in future, we have ideas. We’ve worked with plenty of clients who need to reclaim their time, and we know it can be done.

Give us a call, drop us a note or come in for a chat – we’re here to help.

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Understanding your revenue drivers

Fri, 21 Jan 2022 09:23:00 GMT

For your business to make money, you need to generate revenue.

You produce revenue through your usual business activity, by making sales, getting your invoices paid, or taking cash from paying customers. So, the better you are at selling your products/services and bringing money into the business, the higher your revenue levels will be.

But what actually drives these revenue levels? And how do you get in control of these drivers?

Knowing where your cash is coming from is more crucial than ever

As a trading company, you face the multiple challenges of a global recession, an increase in online consumer buying and a ‘new normal’ when it comes to trading, markets and buying expectations. The better you can understand the nature of your revenue and its drivers, the more you can flex, manage and control your ability to generate this income.

This helps your medium to long-term strategic thinking, and your decision-making, allowing you to be confident that you’re focusing on the business areas that deliver maximum revenue.

Import areas to consider will include:

Talk to us about exploring your revenue drivers

If you want to boost revenue and increase your overall profitability, come and talk to us. We’ll review the numbers in your business, help you to understand your revenue drivers and will give you proactive advice on enhancing your total revenue as a company.

Get in touch to kickstart your revenue generation.

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Are You Suffering from Business Burnout?

Sun, 16 Jan 2022 13:42:00 GMT

The last two years have been demanding and exhausting for many business owners. Are you one of them?

The challenges have been relentless, and we know many small business owners have had to navigate unprecedented demands because of the pandemic and related government regulations.

Burnout results from long-term stress and can manifest in emotional and physical exhaustion, which may affect your enthusiasm for running the business you once loved.

So, What Can You Do About it?

We understand that as a business owner, you have many responsibilities, and often you do everything on your own. So we know how hard it can sometimes be to keep on top of all your legal obligations.

The most important step is to acknowledge you feel burned out and need a break.

Take a break as soon as you can. Plan ahead for time away from the business. However, while getting some rest in the short-term will help, long-term stress will take commitment to recover from.

Strategies to Help Recover from Burnout

What can you do differently to avoid prolonging or retriggering the burnout?

Need Some Support?

You’ll be better able to face challenges, run your business well and assist others if you are looking after yourself well.

We’d love to help support you back to passionate engagement with your business. If you’re feeling burned out and need help in managing systems, technology, payroll or other financial and administrative management, talk to us today, and we’ll back your recovery.

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Welcome to 2022!

Fri, 14 Jan 2022 18:40:00 GMT

We’ve made it through another year of Netflix binges, Zoom meetings, mask-wearing, and copious amounts of sanitiser. Who knows what 2022 will bring us, but no matter what happens, we’re here to support you to redefine success and achieve your goals.

Once again, we can take our learnings from the past year and plan for a better 2022. Well, what we can control anyway!

Before you completely eliminate 2021 from your mind, take some time to reflect on what you achieved during the year. Ask yourself the following questions, write down your answers, and store them somewhere safe to revisit at the end of the year. If you did this exercise last year, pull out your answers and spend time reflecting.

Let’s stay connected again this year. There are countless ways we can support you and your business and help you achieve time, mind, and financial freedom. Book a complimentary catch up, lock in a Business Planning session, or reach out for some of our complimentary resources.

The closer we work together, the more we can achieve.

Here’s to 2022!

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5 tips goal-setting tips for the year

Tue, 11 Jan 2022 05:49:00 GMT

Wouldn’t it be great to have your best year ever, this year? Whether you want to grow your business or take more time for yourself, these goal-setting tips can help you achieve your long-term plans.

We can help

Not sure what your goals should be or how to monitor them? We can show you where to find the information you need, how to check on it, or keep an eye on it for you.

Our team also has some fantastic ideas for how to reach your goals and build your business – get in touch!

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Deep work – ditch distractions and be one of the focused few

Mon, 03 Jan 2022 07:13:00 GMT

With the development of technology and social media, distraction is the new normal. A recent study found that a typical office worker gets just 11 minutes between interruptions, while it takes an average of 25 minutes to return to the original task after an interference.

In his book, Deep Work – Rules for Focused Success in a Distracted World , Professor Cal Newport suggests that serious professionals quit social media entirely. He defines deep work as “professional activities performed in a state of distraction-free concentration that push your cognitive capabilities to their limit”.

Here are five ways to get into what’s called a “flow state” – where you’re ultra-productive and focused:

1. Limit social media.
If Facebook or another site is stealing too much of your time, restrict your use of it with an app like Freedom or StayFocused – these apps restrict the minutes spent on social media.

2. Give yourself a strict time period to work.
Strict time periods limit procrastination and prevent burnout. The more limits you give yourself, the less time you have for wasting. Deadlines such as ‘I have 90 minutes to finish this business case’. Or ‘I’ll finish work by 5:30 each day’ make it easier to keep yourself on task.

3. Introduce deep work strategies.

4. Transition to deep work.
Use rituals and set routines to minimise friction in your transition to depth.

After you decide on your working philosophy, commit to scheduling deep work blocks into your diary and stick to them. Scheduling a specific time of day in advance negates the need to use willpower. Also, know where you’ll work and for how long. Create a zone specifically to perform deep work.

5. Drain the shallows.
Confine shallow work so it doesn’t impede your ability to take full advantage of deeper efforts. Use time blocking to schedule every minute of your day, and group tasks into blocks, such as emailing, printing, scheduling meetings, etc.

Don’t worry if you have to adjust your schedule multiple times. The goal is to maintain a say in what kind of work you’re doing. Deep work improves efficiency -get in touch if you’d like help with other efficiency strategies in your business.

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Making any New Year’s Resolutions this year?

Sat, 01 Jan 2022 09:23:00 GMT

It’s probably been a while since you made New Year’s resolutions. For many businesses, the challenges of the last couple of years have been enough to keep us busy, so we are not in a hurry to add more objectives to the list.

But the new year is a new beginning and we hope it brings you health, wealth, and happiness.

Making those positive changes in our personal lives, often helps us with our business life too. While you set your personal goals this year, it’s worth setting some goals for the health of your business too. If you are a business owner, this is often the time of year when you reflect on where you are at and think about your business goals for the year ahead.

The following article by Zapier has a list of apps to help with task management – personal or professional – The 8 best to-do list apps of 2022 .

And remember, we are always here to help you achieve your business goals.

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Christmas gifts for your customers and team

Thu, 16 Dec 2021 13:39:00 GMT

Christmas is nearly here, and it’s a great time to let your customers and team members know how much you appreciate them. But this has been a tough year – it’s not easy to know how much to spend or whether it’s appropriate to throw a party.

Gifts, cards and donations

The traditional professional Christmas gift tends to be food-related: hams; hampers; bottles of wine or spirits. Those can be ordered online and sent out, although it’s best to avoid anything that will spoil considering current delivery delays and people who may not be working in the office.

For customers or clients who you know really well, something tailored to their personal interests can show you’ve been paying attention. And for both customers and staff, a handwritten card is a lovely touch and costs very little.

Another option is a donation on behalf. Many people really appreciate an email or card that lets them know you’ve donated money to a charity on their behalf, particularly if you can include details like, “The local foodbank will use this donation to feed families on Christmas Day.”

If lockdowns allow, a coffee or lunch for higher value clients is an excellent way to build stronger relationships as well as making the most of the Christmas season. You might spend more this way, but for your best clients this can be far more memorable than a gift.

For your team, a hamper is probably a less popular choice. A Christmas bonus might be appreciated, but do run the numbers first. A supermarket voucher retains its full value, while a cash bonus must be taxed. Talk to your team – they may prefer a paid day off rather than any gift.

How much should you spend?

You might like to create categories based on how much your clients spend with you and how valuable they are to you. The top customers might all receive a larger gift, while the smaller customers might get a something more modest.

Christmas budgeting

Wondering how much each client or customer has spent? Not sure what you can afford to budget for Christmas gifts? We can help.

Get in touch and we’ll run the numbers to give you the insights you need.

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Does your business need an app?

Mon, 13 Dec 2021 13:37:00 GMT

Mobile apps have revolutionised how we live, organise and track our lives. The average smartphone user now has 35 different apps on their device, showing not just the variety of different apps out there, but also the average consumer’s reliance on mobile technology.

So, if apps are a key part of the digital economy, does your business need to invest in one? And, if you do, what are the core benefits of this branded app likely to be?

Weighing up the benefits of a branded app

Apps offer us convenience – that’s their main purpose. They help us plan our day, search for information, keep ourselves entertained or make purchases straight from our phone.

57% of shoppers prefer mobile apps to other channels, according to recent research. From a business perspective, this makes a branded app an extremely immediate way to engage with, sell to and interact with your core customer base. You can quickly convert an audience, track their habits and send out notifications straight to the customer’s phone.

But the real question here is a simple one: ‘Do you really NEED an app?’

Here are some questions to consider:

Talk to us about your app plans

Having a shiny new app with your company’s name and branding all over it does sound like an enticing prospect. But, ultimately, this app needs to stand on its own merits and provide some meaningful value – both to your customers and to the business as a whole.

If you’re unsure about the strategic, operational or financial implications of investing in the development of an app, please do come and talk to us. We can help you review your financial position, look over your strategic plan before you engage a developer.

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B2B tips for working with big companies

Sat, 11 Dec 2021 13:50:00 GMT

When it comes to B2B relationships with big companies, arming yourself with as much knowledge as possible will ensure you have the tools for the job.

As with any business to business relationship, there are advantages but also pitfalls to watch out for. Having a big B2B client can really boost your business, from extra credibility to enhanced cash-flow and economies of scale, but it can also strain resources and carry additional demands.

Your size may actually work to your advantage in your B2B dealings. For example, being smaller means you are more likely to be responsive and nimble, or able to offer a higher level of creativity and able to bring a personal touch that can sometimes be watered down in big companies.

Doing the groundwork to plan for these partnerships will help you ensure ongoing success. The following article has tips on what to expect when you work with big companies and how to prepare.

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Using the Value Ladder to increase sales

Fri, 10 Dec 2021 19:16:00 GMT

One of the best ways to increase sales is to use the Value Ladder to build a relationship with your customers. The higher the customer values their relationship with you, the more money they’re willing to spend.

On the bottom rung of the Value Ladder, we have an initial offer of value. This should be something you can offer customers for free; giving value before extracting value.

Let’s say you’re a bike retailer. Your initial offer of value could be to provide free branded drink bottles at a cycling event. This initiates a relationship with your target market.

The next step on the ladder is the lead magnet; a low-cost service option to build on the relationship. In our bike retailer example, this could be an educational event on bike maintenance. Tickets should be low cost with giveaways provided throughout the event.

Now that you’ve provided value and built a relationship, you can offer your 1st tier product or service. This is a medium-priced item, such as a child’s bike.

By providing a quality product or service and delighting the customer, you’ll build a stronger relationship which will lead to a 2nd tier offering. This could be a mountain bike for mum and dad.

Finally, you reach the highest rung of the ladder – the loyalty offer. This could be selling e-bikes to mum and dad with a full service programme.

You’re unlikely to be able to sell your highest cost offering without first building a relationship with the customer. Start at the bottom of the ladder and build a stronger relationship each step of the way, offering only the products or services which the customer finds value in.

Need help building stronger relationships with customers to increase sales in your business? Get in touch!

The Value Ladder is based on the theory documented in Russell Bruson’s book, Dotcom Secrets .

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The difference between directing and leading

Sun, 05 Dec 2021 13:45:00 GMT

There are 10 departments in every business, no matter how small. These are:

Many business owners control multiple departments. Imagine each department has a hat – worn by the single leader of each department. Many business owners wear multiple hats. The secret to the success of your organisation structure is to understand the key differences between the departments (and their responsibilities), to understand which hats you’re wearing, and most importantly, to make sure none of your hats are being neglected.

So, what’s the difference between wearing the Director hat and the Leadership hat? In a nutshell, Director is a strategic role and Leadership is an operational role.

Eight key differences between Directors and Leaders:

Getting your structure right and developing your strategy are critical foundations for achieving business success.

Understanding the difference between the Director hat and the Leadership hat is fundamental. The Directors set the plan and the Leader engages and empowers the team to deliver on that plan. After all, it’s your team who must be engaged in your plan for it to become a reality.

How well you are living into the Director hat? And, what three things could you do better as a Leader? Finally, what support do you need to lift your business performance to the next level?

We can help you build a sustainable, scalable, and ultimately, saleable business. Get in touch for more information.

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32 Ways to Get the Maximum Value out of your Business

Wed, 24 Nov 2021 10:26:00 GMT

The post 32 Ways to Get the Maximum Value out of your Business appeared first on Fortuous .

My Own Maximising Extracting Value Tax Diagnostic

Mon, 22 Nov 2021 09:39:00 GMT

For a number of years now I’ve been operating across a range of businesses. Therefore when I look at the 32 ways I’m looking at it in that context.

For me, money management is not about the money you earn, but the money you keep . That’s why I love tax consultancy so much. It focuses on this mantra.

Household Income

It’s important to me that we maximise our household income in a tax efficient manner. The way we do that seems to have changed so much over the years as we’ve gone from care free pre-kids to responsible parents (ish) post-kids! Currently, this involves my Mrs being employed by the business, she’s an financial chartered accountant so we might as well use her! This suits the business as we have an important function covered. It suits my wife who wound down slightly from her career after we had kids. It also suits our household income because we are taxed across the two of us, not just me. This means we benefit from maximised personal allowances, lower level tax bands and the company can make a national insurance saving.

I needed a dividend for extra expenditure

Not the norm for me, but the current year was a bit of a spending year – ouch! Thankfully, they only seem to happen once every ten years as I’m such a tight arse! But this year we had some extensive work done our home…which seemed to go on forever! Plus, we had a few lovely holidays as me and the Mrs had been married for ten years. We took the family to Disneyland Florida over Xmas and New Year which is something I’d always wanted to do. Me and the Mrs went to Paris on our own, which we’d not done since before Oscar was born…now 8 long years ago! To do this, I took out a dividend, the £2K tax free amount, plus a little more to keep the clan in a happy home and enjoying our ten years married celebrations!

Building retirement investments

My years of frugality in extracting money from the company paid dividends a few years back when I set up a SSAS which bought the office premises. Nice little arrangement which ensures the guaranteed rent is paid back into my pension tax free! Purchase of commercial property No 1 has wetted my appetite for more, so I’ll always invest as much as I’m able into this arrangement with a view to eventually planning the next investment. I’m a bit of a nerd so these kind of things excite me! I think it’s because I feel in control with it…firstly it’s a very tax efficient way to put money aside as you pay no income tax or national insurance when the money is paid in (subject to the limits). You also get a corporation tax deduction on the money paid in. Plus I get to dream…plan a future commercial property empire…long way off but hey, dream big! When I retire, which is probably never as I’ll get bored…so when I reach retirement age …I’ll take 25% tax free with the remainder being taxed but spread across multiple tax years, making the most of the personal allowances and tax rates. I want to live a highly active but extremely comfortable work / life retirement…I just can’t see myself retiring…but let’s see!

I’m not that into Cars, but…

I’m not massively into cars. I’ll be honest enough to say, I want something that looks decent, but not too flashy. One of the businesses had done really well so it was a bit of a no brainer to go for an electric vehicle when the time came around last year. Reason being we got 100% corporation tax relief against profits in that year, plus there is no BIK on me. It’s all the extra running cost aspects I was able to put through the business and take advantage of as well like installing a charging point at home, charging tax free at the office, car insurance and servicing which all normally add up to a pretty penny. I did have my eye on also putting a personalised number plate (GWIL-I-AM TAX) through the business (which is allowable) but Mrs D said she would divorce me! Quite right as well!

Company Loans

Way back when I lent money into the companies to get some started and the company paid me a commercial rate of interest back on that money which allowed me to take out £1K from the business tax free. However, the circumstances have changed, that money has now all been repaid to me and a few years back I instead took out a £10K tax free loan from the business. I didn’t need it, I just took it because the company had spare cashflow and you can take the loan of £10K tax free. My thinking here was to simply invest this and make more back, it’s a strategy that’s worked and I’ve made a fair amount on investing that £10K well.

Maximising business expenses paid for personally

Running a business takes grit, it’s hard to switch off and you are always working because it’s your passion. That’s why for me, it’s vital to maximise business expenses wherever possible. That means ensuring claiming travel expenses on trains/flights, mileage allowances, when travelling for business. Also subsistence expenses when eating & drinking when on travelling on business as well.

I also ensure I double bubble the benefits by spending in a points reward card. My favoured card is Amex as they have a points rewards system connected to Airmiles. In the last year doing this I’ve built up enough points to travel to Paris 1 ^st Class for £2. Then to Florida family of 4, 2 free tickets and upgraded to 1 ^st class there and back. All because of the points I built which enabled me to do this!

Employee Benefits

The tight arse in me ensures I maximise the hell out these with all the following being put through the busines at every opportunity:

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New bicycle & weight loss.

It’s something that I’ve been aware of for a while, but never got round to doing. I used ‘Salary Sacrifice – Cycle to Work Scheme’ to purchase an expensive road bike, pre-tax, and in instalments. This reduced my tax liability on income & NI, plus it gets me a dream bike, without a surprise mammoth expense. Most importantly, it’s gets me exercising. Sexy bike. Sexy body. Tax is sexy!

Future intention

I would like at the right point to start exploring a family investment company.

For me this is about retention of earnings for me, my family and the business.

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Book a Tax Diagnostic Review

To make sure you’re getting all the benefit from the tax saving opportunities available to you and your business, book a tax diagnostic review with us.

Get peace of mind you’re aware of all the tax advice relevant to you.

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You’re not getting the tax advice you need

Sun, 21 Nov 2021 16:10:00 GMT

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4 things to consider before expanding your service offerings

Mon, 18 Oct 2021 10:00:00 GMT

If you’re looking to grow your business, you might consider expanding your service offerings. Adding additional services is a good way to increase your profitability, diversify your income and expand your market. But there are important things to consider before adding to your income streams.

Here are 4 important things to keep in mind when you consider adding to your services.

1. Does the expansion complement your business?

The best way to expand your service offerings is to add value that complements the work you’re already doing and is attractive to your current client base. While it takes more effort to bring new customers in, adding something that your current clients need and that you already have the capacity for is an efficient way to increase your profits.

If you already offer lawn maintenance, find out what other yard work your clients need done, for example. It might be fairly simple for you to offer those services to your clients, and they’d probably be happy for you to do it rather than hiring someone new.

2. Is your profitability consistently high?

Spending money to hire new people and buy more equipment if your business isn’t consistently profitable is risky. It might be tempting if you make a lot of money in one year to jump into offering a new service, but hold back until you’ve got a couple years of high profits behind you. That allows you to save money to cover the increased expenses and ensure that the one year wasn’t an anomaly.

Invest in your business, but expand your services when your profits are consistently up, not when you’ve had one really good period.

3. Is there a potential partnership or merger that makes sense?

There are times when forming a partnership or otherwise merging businesses makes sense. Is there someone out there who works in a similar capacity that you could work well with? Maybe they are great in their field but need help running a business. Explore a partnership or a buy-out.

For example, if you offer immigration consulting and you know someone who offers relocation services, you might form a partnership so the new company can offer both immigration help and relocation services. That can lead to new clients for both you and your new partner.

4. Are you doing it for the right reasons?

There are many good reasons to add new services, but there are also reasons that can increase your risks. Competition, for example. While competition can drive innovation, it’s not the only reason to add a new service—and doing so just to beat your competitors can lead to mistakes being made and money being lost. Rushing to expand is when companies find themselves in trouble for adding services there’s no market for or without a fully-formed plan.

Final thoughts

Expanding your business is exciting, but it’s important to consider some issues before you commit your time, energy and financial resources. If you’re adding new services, do so because it makes sense, you’re in a financial position to do so, your clients want it and you have the capacity for it.

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4 ideas to manage customer wait times without hiring more people

Fri, 15 Oct 2021 17:35:00 GMT

Balancing customer experience against your budget is a difficult task. You need the right amount of staff working to keep customers happy, but not so many people that workers are standing around looking for things to do.

If your customers have long wait times, that’s good news for you initially—it means your business is popular. The bad news is customers won’t wait around forever for you to fix your time management issues. If they like your goods or services, they’ll be a bit forgiving, but too many long waits will send them to your competition.

If you need to manage customer wait times without hiring more people, here are some ideas that can help you.

1. Encourage customers to come in at quiet times

Every business has busy times and slow times. One way to lessen wait times is to shift customers from the busy periods to the slower ones. Offer incentives for coming in during quiet hours. For example, you could offer 10% off for customers who come in between 11 and 1, if that’s your quiet time.
Some retail establishments even encourage customers to schedule an appointment to come in, rather than just walking in. This can also help you manage customer flow and shift people to less busy times.

2. Have a separate stand for complicated transactions

Complicated transactions take more time, and they force your other customers to wait longer for service. Have a special station where returns are taken, online purchases are picked up or loyalty program sign-ups are processed, for example. These transactions are not only more complex, they happen less frequently so moving them out of the regular line doesn’t add significant work to your staff, but decreases customer wait times overall.

3. Streamline the queue

See if there are ways to streamline your queue, so customers aren’t waiting a long time to be helped by one person. For example, you could have one employee greeting people, another asking if they need help, and someone else ringing up the purchase. Or you could have mobile point of sale software that allows your staff to help customers anywhere they are—inside or outside the store. Point of sale (POS) software enables staff to search information, find items, close transactions, accept payments and even print receipts, saving your customers from long waits in line.

You can even invest in technology, so customers can check-in with you online before coming to your business. Their wait time overall may still be the same, but they’ll spend part of it at home, so it won’t feel as long to them.

4. Under promise and over deliver

At some point, your business will be so busy that customers will be stuck waiting for service. In those cases, under promise and over deliver. If you know something will take 3 hours, tell the customer it will take 4 hours. Customers are happier if something takes less time than expected than if it takes more.
This tactic also buys you time in case of unexpected delays. The worst thing in this situation is that you have to repeatedly tell customers their wait will be longer. That frustrates them and makes them less likely to come back.

Final Thoughts

Line-ups and wait times are inevitable, but they don’t necessarily mean you need more employees. There are solutions available to you that enhance the customer experience without you hiring more people.

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4 WAYS SMALL START-UPS CAN TAKE ON ESTABLISHED COMPETITORS

Fri, 08 Oct 2021 05:38:00 GMT

Starting a business means you’ll be in competition with other companies that already exist. It’s actually a good thing if you have competition to go up against. Competition pushes you to be innovative. It also means there’s an established market for your goods or services.

The key to benefitting from competition is knowing how to effectively take on competitors so your company earns a profit. Here are some ways to get ahead of established companies and grow your business.

Large businesses have weaknesses. The bigger they are, the less personalised and responsive their service is. They market themselves to a wider audience and, because their overhead is higher, they have to bring in more clients to cover their costs.

In this respect, your size is an advantage. Fewer customers means more personal service. That opportunity for relationship building will entice customers who are looking for extra attention.

Examine what people love about your competitors but also what frustrates them. Build your business to address those gaps. If you find early on that something isn’t working with your customers, don’t be afraid to shift. Be innovative in responding to market changes and customer demands. You’ll have an easier time making that change early than once you’re more fully established.

Your business offers something different from the established brands. If you didn’t have something unique, you wouldn’t be starting a business. You’re different from what’s already out there—and that’s what makes you attractive to your target market.

Do you offer goods that are only locally produced? Products that are ethically sourced? Do you have special knowledge or expertise in your industry? Are you offering a service that has a new component, such as a technological advantage? Does your product fill an existing gap in the market? Whatever it is that makes you different, market that. Make sure people know why and how you’re unique.

If there’s already established competition in your industry, that’s a good thing. It means someone has already done vital research on your customers’ needs and pain points.

You can learn from the knowledge that already exists by studying your competition. Look at their website, social media and review sites. Take note of how they sell their goods or services. Are they using tactics relevant for you? Are their strategies effective? Are there weaknesses in their marketing or offerings that you can address?

Rather than spending your money doing your own research, learn from the businesses that have gone before you.

There’s room enough in most industries for competition. While it’s a good idea to know who you’re up against, ultimately your customers are your priority. Focus your efforts on providing goods and services that are meaningful to them, that address their pain points and that make their lives better. Market yourself to make those aspects clear. Show them why you’re the ideal company for them to buy from.
Final thoughts

By using these 4 strategies you can effectively take on the competition and help your start-up business be successful.

The post 4 WAYS SMALL START-UPS CAN TAKE ON ESTABLISHED COMPETITORS appeared first on Fortuous .

5 FUNDING OPTIONS FOR START-UPS

Mon, 20 Sep 2021 17:27:00 GMT

Starting your own business requires enough capital to ensure you can pay your bills until your company turns a profit. Depending on the type and size of your business, you may need thousands of dollars monthly to cover overhead.

If you’re wondering where to find business start-up funding, there are a variety of options available to you. Each of these options has its advantages and disadvantages, and it’s important to pick the funding that meets your needs and works for your business.

Here are 5 funding options for start-up companies.

Also known as bootstrapping, personal investment means you put your own assets into your company. Banks and other funders want to see that you’ve invested financially in your business—this suggests to them that you’re committed to the venture.

If you can fund your business personally without risking your financial future, it might be worthwhile. Funding your business means you don’t have to give up control or allow others a say in how you run things. Doing so, however, means your finances are on the line if things don’t go as well as expected.

If your friends and family have capital to invest, you can turn to them for funding. They loan you their capital that you repay when your business makes a profit. The interest rates are usually much better than you would get at a financial institution and the repayment terms are more flexible.

The issues arise with borrowing money from loved ones. Friends and family rarely have capital to invest and they may want equity in your business. If you face financial problems down the road, they’ll be affected, which can strain your relationship.

Your business might be the right model to take on either venture capitalists or angel investors. Both inject much needed start-up capital into a business, but each requires some form of control.

Venture capitalists invest in companies with high-growth potential, and they expect a healthy return on their investment. You’ll give up some ownership or equity in your company in exchange for their financial backing. If you go with venture capital, make sure the investors you bring in have relevant experience in your industry.

Angel investors often invest in small start-ups and help people by contributing financially and with their expertise. They may not expect high returns for their investment but they may want a managerial role in your company.

Also known as accelerators, business incubators provide financial support and logistical resources to new companies—for example, they might offer a laboratory so your new business can develop its products before starting production. Once the business enters a production phase, it leaves the incubator.

Government agencies and financial institutions offer grants, loans and subsidies for start-ups. The competition for grants and subsidies is high, and the amount you receive varies. Many grants require you to invest your own money or prove you have funding from other sources.

Bank loans require you to prove you have a solid business idea and are capable of repaying the loan. If you’re a new entrepreneur, you may have to provide a personal guarantee that the money will be repaid.

Final thoughts

There are numerous funding options for your start-up, each of which has advantages and disadvantages. Knowing how much money you need to cover your initial costs, how long it will take to turn a profit and how much control you’re willing to give up in exchange for funding will help you choose the option that’s best for you.

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SUCCESSION PLANNING: A WILL FOR YOUR BUSINESS

Wed, 08 Sep 2021 18:06:00 GMT

The unfortunate reality is most business owners don’t take proper holidays. Usually this is because their business relies on them and they don’t have the support to keep the business running without them.

As a business owner, have you ever considered what would happen to the business if you had to take a six months break because of a serious illness or injury?

Would the business survive? How would the bills get paid? And while it might not be nice to think about, if you were to die, are you sure your business partners would give your loved ones a fair deal? For these reasons, and many more, it’s important for all business owners to have a detailed succession plan. A succession plan is like a will, but for a business. Although there are often a wider range of scenarios and options to consider.

Just like your will, a good business succession plan can vary from one business to the next. But there are some key areas that should always be considered, which you can find below. Chat to us if you want advice on future-proofing your business.

Business Structure

In the event of death or retirement, the ownership and control of the business may need to be transferred to the owner’s family or to the surviving business partners. How easily this occurs will often depend on how the business operates, such as through a trust, or a company, or without a separate entity at all.

Succession agreements

If something happened to one of the business partners, would their spouse or children take over the control of that share of the business? If the answer is no, then a succession agreement can assist the other business partners to continue business operations whilst allowing for compensation for the former partner’s family.

Managing risk

Just like personal insurance, business insurance can provide a range of protection such as temporarily meeting the normal costs of running the business (business expenses cover) or paying for a short-term replacement manager (eg. trauma or disability cover). A life insurance policy linked to the succession agreement that provides the deceased partner’s family with suitable compensation for the transfer of business ownership to the surviving partners may also be a good idea.

Powers of Attorney

Most small businesses struggle to do much without the advice and authority of the figurehead or main key decision-maker. That’s why a Power of Attorney is integral to a good succession planning process. It helps the business to physically operate if the owner is incapacitated because of illness or injury.

There is a range of people who may need to be involved in setting up a succession plan, including a financial adviser, lawyer and accountant. We can help you find the right team for you.

Even if you have a plan in place already, it is important to review agreements and insurance policies so they’re up to date and reflect the current value of the business.

Need a succession plan?

Chat to us to get started. We’re here to help you run a successful business and protect your assets, now and in the future.

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How To Prepare For The Cis Vat Domestic Reverse Charge

Fri, 09 Apr 2021 14:17:00 GMT

After several delays, the VAT domestic reverse charge for construction services is due to come into effect on 1 March 2021. If you’re not sure what this means for your business, read on for more information.

What is the Domestic Reverse Charge?

First announced in 2017, the Domestic Reverse Charge is HMRC’s way to fight VAT fraud in the construction industry. Also called Carousel Fraud or “missing trader fraud”, some contractors collect VAT and then disappear before the time comes to pay HMRC.

Under the old scheme, those supplying the construction services will have to account for the VAT. With this new policy, the customer will account for the VAT and it will be considered input tax for them as if they’ve made the supply to themselves.

In other words, sub-contractors will require the contractor employing them to handle and pay the VAT directly to HMRC for the services they provide.

The payment received will be for the cost of the work and materials used, net of any CIS deductions for the National Insurance and tax, but no VAT will be paid on the invoice.

This change will affect all CIS-registered businesses working as contractors and the recipients of their services.

What you need to do to prepare

With just weeks to go until the VAT domestic reverse charge for CIS comes into effect, how can you prepare? Here are some ways:

If you need help in ensuring your business is prepared for the CIS VAT Domestic Reverse Charge changes, get in touch with us and we’ll work out a plan.

The post How To Prepare For The Cis Vat Domestic Reverse Charge appeared first on Fortuous .

Can Residential Property Fund Your Retirement?

Thu, 01 Apr 2021 14:09:00 GMT

Thinking about retirement can be stressful. You need to plan for how long you think you’ll be retired, what lifestyle you’ll want to lead, and approximately how much you’ll pay to maintain your cost of living plus any additional expenses. There are a lot of unknowns and “what ifs” that you might not be able to anticipate, and many of them can affect your finances.

Many people ask whether residential property can fund a retirement. It can, but you have to be smart about it. As with any investment there are risks, and real estate costs money upfront, regardless of how much you ultimately make. So before you invest in residential property, you’ll need to think a few things through.

Here are some tips to getting the most out of a real estate investment to fund your retirement.

1. Understand your current financial state

There’s no point in deciding how beneficial real estate will be if you don’t have a clear picture of your current financial state and your goals. If you’re only two years from retirement, investing in real estate could be risky as you’ll have a low tolerance for losses and less time to reap the rewards. If you’re early in your career the value of the investment property will have time to grow. That said, there are always fluctuations in the market and a sudden drop in housing prices could affect your investment no matter how long you have it.

You’ll need to know what you can afford to pay right away, too. You’ll have to cover a down payment and property taxes. Additionally, if your property is a rental, you’ll still have to pay the mortgage even if you have no renters. Depending on how long you own the property you may have large bills to maintain the premises.

2. Know the area you want to buy in

Knowing where you want to buy is vital to a more stable investment. Even in market downturns, there will always be areas of a city that are in demand. Research the area and find out where housing prices are stable or increasing, where there are desirable features nearby—parks and schools, for example—and where people tend to want to live.

Buying without that information can result in investing in property in a less desirable area which will make renting the unit or selling it that much more difficult.

3. Know your strengths

There are a variety of ways to invest in residential property that can earn you an income if you know how to leverage them best. Buying with the purpose of renting something out and holding onto it for a long time can earn you money, as can purchasing land and flipping it quickly. You may know contractors (or be a contractor yourself) and find it convenient to purchase a rundown home in need of remodeling and then sell it when you’ve fixed it up. Each of these strategies has its benefits and drawbacks. Knowing which works best for you based on your financial profile and your talents will help you make the decision that’s best for you.

Final thoughts

Residential property can definitely help fund your retirement. The key is choosing a strategy that meets your needs and helps you attain your retirement goals. If you’re not sure about your financial needs in retirement or what your tolerance for losses are, talk to a financial planner who can answer your questions about retirement savings and help you develop the best solutions for you.

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Choosing How To Value Your Business To Prepare It For Sale

Fri, 26 Mar 2021 13:43:00 GMT

Knowing the value of your business is vital should an unexpected buyer come along, and the timing is right for you to sell. You’ll want to get the best price you can so make sure you have an accurate idea of your business’s worth.

A business’s value is taken from both tangible and intangible factors, with tangible assets a lot easier to assess.

Your business is worth what someone is prepared to pay for it – and what you’d be prepared to sell it for. Based on this fact, the only way to really value your business would be to put it on the market to see what a buyer may offer.

However, you’ll want a ballpark figure of how much your business is worth, so you can be sure you’re asking for and receiving, a fair price when you sell.

Choose your method of valuation

There are a few common methods used to value a business. They can give you a general idea of how much your business is worth plus a starting figure for negotiations.

Earning valuation method

An earning valuation method assumes that your business’s true value is in its ability to create wealth in the future. You may find that using only one method isn’t enough to come to a fair selling price – consider using a combination of the following methods.

Capitalising past earning

Here, a valuator uses your business’s past earnings to determine an expected level of cash flow. Unusual revenue and expenses are considered then a capitalisation factor is multiplied against the expected normal cash flows.

The capitalisation factor reflects the rate of return an average buyer would expect, plus it measures the risk of expected earnings not being achieved.

Discounted future earnings

The only difference with discounted future earnings is that an average of the trend of predicted future earnings is used rather than your business’s past earnings.

Asset-based valuation

An asset-based valuation considers all the investments in your business. There are two approaches you can use to value your business using this method:

Going concern

A going concern asset-based valuation will list your business’s net balance sheet value of all its assets, subtracting the value of all its liabilities.

Liquidation

A liquidation asset-based valuation establishes the net cash that will be obtained if all your business’s assets are sold and its liabilities paid.

Market value approach

A market value approach aims to compare your business to comparable businesses that have sold lately. For this method to work there will have to be other businesses like yours to compare with.

It’s possible to reach different results with these valuation methods, so ideally get your business valued by more than one valuator.

Calculate your business’s goodwill

Determine your assets’ resale value

Calculate the resale value of your business’s fixed assets such as property, vehicles, office equipment and machinery. For some of these assets such as property, the value of them may increase over time. For others, like work vehicles, the value of them will decrease as time passes.

To ensure the values of your fixed assets are accurate, use depreciation to reduce their values annually.

Examine the market

Valuing your business accurately is critical if you don’t want to risk leaving money on the table or losing potential buyers.

You’ll have to take a good look at your market to get a clear idea of how similar businesses are performing and the prices they’re selling for when put up for sale.

Who do you want to sell to?

Have an idea of what kind of buyer you want to sell to. It’s important to understand where the value lies in your business, so you can try to maximise its worth.

Take into consideration your method of valuation, the goodwill in your business, the resale value of your fixed assets and the current state of similar businesses selling on the market, to come to a fair value for the sale of your business.

The post Choosing How To Value Your Business To Prepare It For Sale appeared first on Fortuous .

5 Personal Finance Hacks To Start Now

Thu, 25 Mar 2021 16:01:00 GMT

Having total control over your finances can give you an amazing sense of freedom.

However, it takes a lot of discipline and hard work for you to be able to achieve this. In this article, we will share some of the most useful tips that you can start now to live a better financial life.

Build multiple sources of income

Whether it’s through your business, a side hustle, or investing, building your income network can help you secure your financial future. Starting early means you can compound over a longer time period and can take on more risk as you have more time to recover from mistakes.

Grow your savings

Understand your cash inflows and outflows so you can work out how much can be set aside as your savings. It is recommended to set realistic goals and a concrete plan to reach your targets. If you’re not yet ready to make investments, at least have your current affairs sorted.

Avoid bad debt

Bad debt is something that leeches money from you over the long-term, including credit card debt or interest for late bill payments. It is also important to note that too much bad debt can impact your credit score and prevent you from borrowing in the future.

Set aside an emergency fund

Your rainy day fund, which could be around 6 months worth of your living expenses, should be one of your priorities. Even just saving 10% of what you get each paycycle can eventually get you to that target amount.

Live below your means

Living below your means requires suppressing your desires at a certain point. This is probably the most underrated personal finance skill, but one that actually works.

You may be tempted to show off your peacock feathers to keep up with your peers. However, those who enjoy enduring financial success have a propensity to not care about what others think or what others are doing with their lives.

Expert Financial Planning

You may find some of these personal finance hacks challenging to do, but no one said the road to financial freedom is going to be easy. Once you’ve adopted good money habits and learned how to discern what works and what doesn’t for you, you’ll see that all your efforts are worth it.

If you want to chat more about financial planning or growing your income streams, drop us a message so we can schedule a one-on-one consultation.

The post 5 Personal Finance Hacks To Start Now appeared first on Fortuous .

£9000 Grant Announced By The Government For Retail And Hospitality Firms Hit By Third Lock Down

Sun, 21 Mar 2021 19:22:00 GMT

The post £9000 Grant Announced By The Government For Retail And Hospitality Firms Hit By Third Lock Down appeared first on Fortuous .

Key Drivers To Boost Profitability And Cash Flow

Fri, 19 Mar 2021 13:16:00 GMT

It’s important to identify and monitor the key drivers of your small business to boost profitability and cash flow.

Boost profitability by recognising your key drivers

Identifying the key drivers of your business is critical to boosting profitability. A key ‘driver’ is something that has a major impact on the performance of your specific business.

A whole range of factors can affect the performance of every business. The secret is to focus on a handful of drivers that:

Make use of benchmarking

Use past figures as a benchmark for current performance. Figures for last year or last quarter provide hard facts and established patterns that expose potential problems and opportunities.

Also try to compare your business with other similar businesses, especially competitors. Your accountant, bank manager or industry association may be able to supply industry benchmarks.

What are some of the key drivers in business?

Critical drivers vary from business to business, and they include:

Even direct competitors may have different drivers. A prime location is not a key driver for an Internet-based electronics business but it is for a ‘bricks and mortar’ competitor that relies on well-located retail stores.

Some of the following drivers might be relevant to your business.

Converting leads into sales

The number of leads (information requests or quotes given) provides early warning of any peaks or troughs in your sales. If you have an established leads-to-sales conversion ratio and know the size of an average sale, you can use the pace of leads to forecast sales.

Monitoring sales figures can show:

Keep your costs under control

Maintaining a healthy gross profit margin is critical. If your gross margin percentage is falling, take swift corrective action. The causes could include higher input prices, a changing product mix, production inefficiencies or excessive discounting.

If you run a service business that bills out time, it can be useful to treat consultants’ salaries as a variable rather than overhead costs because this makes it easier to work out who is making you money.

Collecting receivables efficiently

Your accounts receivable collection period (the number of days on average to collect payments from customers) is an important driver to monitor. Try to improve on your past performance and at least match the industry standard.

If the standard is 35 days, and you’re taking 45 days on average to receive payments from customers, then improve your collection activities immediately. Bill promptly and highlight overdue payments for prompt action.

The key is consistency – late payers should know that you’ll unfailingly contact them.

Optimal inventory levels

Your inventory turnover rate is the ratio of cost-of-sales to inventory. Most businesses aim for a high inventory turnover rate because it indicates an efficient use of capital resources. If the ratio decreases, find out why.

For example, you may be over buying or purchasing inventory that you cannot sell. The more you can break down your inventory figures into separate product categories, the easier it will be to pinpoint problems.

Hours billed

A management consulting firm had a disappointing level of monthly sales for years until the owners realised that hours billed per consultant per week was the key driver.

Once they began monitoring this, they could see which consultants were earning the revenue. Attitudes changed overnight and sales increased significantly. The firm was then able to target small improvements that were manageable – such as billing 30 minutes more a day each.

Turning over staff

A travel agency recognised that staff turnover was their driver. An experienced sales person was found to be three times more productive than a new recruit. The recruitment and training process for new salespeople was also a major burden on the business.

To reduce staff turnover, the travel agency introduced a long-term incentive element into salary packages. It also introduced quarterly performance reviews.

Defective goods

An engineering company found that the defect ratio was a driver. Defects led to goods being returned, extra time wasted on rework, delays in payment, and lower profit for the business. The company reorganised the workforce into ‘quality cells’ and productivity increased significantly.

Identifying the five key drivers you need to focus on

What are the key factors that enable your small business to outperform its competitors? Try to identify the five key drivers you need to focus on.

The questions you need to ask yourself are:

For most small businesses, the key drivers include major cost-efficiency items. For example, two important drivers for a chicken processing company were employee costs and yield (the weight of meat taken from each chicken). Both had a major impact on the gross margin.

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Seven Ways To Improve Workplace Productivity

Fri, 12 Mar 2021 13:21:00 GMT

The success of any business, large or small, depends largely on nurturing an efficient, productive workplace. While improving employee productivity should be always be a priority when the ultimate goal is a sustainable and profitable business, the process is easier said than done. Below are some of the most effective methods of managing a productive, happy workplace while increasing output.

Establish Accountability

Productivity depends on every employee understanding that the jobs they do come with specific responsibilities, and that their actions have consequences. Employees that lack accountability are more likely to slack off, procrastinate, or blame others for their shortcomings. Establishing accountability from the beginning results in higher-quality work output and an increased focus on informed, efficient action.

Avoid Excessive Micromanagement

There is no denying that management is absolutely crucial, but too much of a good thing can have adverse effects on productivity. Excessive micromanaging creates employees that feel as if they are not trusted and that their decision-making processes are not valued. Instead of encouraging employees to put forth their best efforts, it results in an eventual dependence on micromanagement that can sink productivity levels.

Recognise Success

Just as employees must be held accountable for their actions, they should also be recognised for their success. Even small efforts, such as verbal recognition or occasional awards, can encourage employees and make them feel like their hard work is being rewarded. For businesses that can afford it, larger rewards, such as holiday parties, improve morale and create camaraderie in the office, all of which leads to happier, more productive employees.

Break Out of Ruts

While it is generally advisable to assign tasks based on an employee’s particular competencies, keep in mind that doing the same tasks repeatedly over an extended period of time can make even a skilled employee feel as if their work has become monotonous. If possible, it may be useful to expose employees to other tasks and even other departments. This renews motivation, offers new skills to learn and apply, and grants the employee a broader understanding of how the company operates.

Cut Down on Meetings

Oftentimes meetings serve as nothing more than temporary breaks from productive work. If a meeting does not have a specific purpose, an organised agenda, and a plan of action, it will probably only function to diminish productivity. Meetings can be a great way to share ideas and establish goals, but don’t let them get in the way of delivering actual results.

Embrace Technology

While many workplaces still see new technology as unnecessary or even distracting, the simple truth is that they can have a significant positive impact on productivity. Updated hardware, software, and machinery ensure that work can be performed in less time and with minimal error. While it may not seem like a big deal, even minor issues such as temporary connectivity problems or hardware breakdowns can quickly add up through the course of a fiscal year.

Think Outside the Box

Studies have revealed several productivity-boosting techniques that may seem counter-intuitive at first glance. While social media has been demonised in workplace settings, data shows that allowing occasional breaks to access such sites can boost workplace productivity by nearly 10%. Likewise, allowing employees to listen to music while working – when it doesn’t interfere with the job, of course – can also improve efficiency. Providing such perks can pay off tremendously if it means happier, more motivated employees.

Balancing the needs of a business is never an easy job, but a focus on increased productivity can have a positive impact on nearly every other facet of the workplace. By using the techniques above, it is possible to eliminate unnecessary pitfalls and ensure that employees are personally invested in efficient, quality work output.

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Are You Falling Behind By Not Automating These Business Activities?

Fri, 05 Mar 2021 15:01:00 GMT

The daily processes and transactions involved in operating a business can mean long hours of repetitive tasks and occasional oversights due to human nature. Automating these tasks can result in significant savings in resources and eliminate mistakes caused by human error. The key, however, is to know which tasks should be automated and which ones warrant staff intervention and guidance. Let’s take a look at some of them.

Here are six activities that you should definitely be automating for your business.

1. Abandoned Online Carts

Not following up with visitors who’ve abandoned shopping carts on your site is just leaving money lying on the table. They’ve already expressed interest in your products. Automated engagement touch-points can create the perfect follow up to prompt them to finish their purchase. Exit pop-ups and follow-up emails are great devices to use when reaching out to visitors who’ve abandoned carts on your site.

2. Lead Capturing, Nurturing, and Scoring

Automating your lead development process can do wonders for your company’s conversion rates. Both hot and cold leads require attention and targeted engagement in order to convert into paying customers. Using automation software can help sales reps to strategically guide prospects to end of the sales cycle, and it can also direct you towards the leads that will convert the fastest.

3. Engaging New Contacts

Entrepreneurs meet new contacts all the time. Whether it’s a potential business partner or prospective customer, automating your engagement with them can help you forge a solid rapport after your initial contact. There are several CRM options that’ll allow you to group contacts by event, type, company, and location, amongst other settings to ensure that your business card collections don’t go to waste.

4. Personal Direct Mail

Outreach efforts with a personal touch tend to garner higher engagement rates, which explains why businesses send out birthday cards, calendars, seasonal greetings, and other materials to customers. With the right software, you can set up automated, sequenced events to gather customer personal data and incorporate it into specific marketing activities.

5. Hiring Processes

Automating your hiring process is one of the best things that you can do for your business. Everything from receiving applications and interviewing to setting up drug tests and completing new-hire paperwork can easily be done with automation. First, outline what your hiring process looks like. Next, determine staff member roles and duties within your process. And lastly, establish time frames that each activity should fall within. There are tons of HR software programs that can make automating your hiring process a breeze.

6. Word-of-mouth marketing

Numerous marketing studies show that consumers are more likely to buy from companies if they’ve been referred by a friend. Encourage customers to give referrals about your products by simply asking for them. There are several ways to automate this, including adding referral mentions to order confirmations, discount offerings, and email outreach campaigns.

Set aside a week or two to take a look at any processes that can be automated within your business. Automating repetitive and tedious tasks can aid you in uncovering hidden cost-savers and potential sales opportunities for your business.

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Gain Customer Loyalty And Retain Them For Life

Fri, 26 Feb 2021 10:59:00 GMT

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FIVE EFFECTIVE RISK CONTROL STRATEGIES

Fri, 12 Feb 2021 16:50:00 GMT

Dealing with risk is an inherent aspect of business management. The way you prepare for risk is the most important factor in determining the longevity of your enterprise. Businesses of all sizes have to contest with the possibility of unexpected events occurring, but it’s how you plan for and react to such scenarios that influence your handling of them. These five methods of controlling risk will provide you with the options needed to better control the fallout from unplanned events or scenarios.

1. Avoidance

Avoidance of risk is a naturally occurring precaution taken by most businesses when they’re aware of the possibility of a perilous or unpredictable event unfolding. The key to avoiding risk is forward-thinking and comprehensive planning. If you can gain access to information that identifies risk in a timely manner, you can often avoid the situation altogether.

Plan ahead and conduct extensive research to ensure you have access to all the relevant information that could inform you of impending risk. When it comes to avoiding risk, knowledge really is power. By identifying risk early, you can alter your plans and pursue a course of action that steers well clear of unnecessary exposure to volatile situations.

2. Acceptance

The acceptance of risk is also built on a base of knowledge and information. If your research suggests the risk involved in a given scenario is relatively minuscule when compared to the possible benefits, then accepting the risk may be the best course of action. Accepting risk should only be advised when you’ve conducting sufficient research and identified the relative potential of problems occurring.

Commit resources to calculate the pros and cons of accepting risk in every individual scenario and make a decision based on objective data. Once you’ve ascertained the potential negative effects of a decision, don’t proceed unless your business can definitively handle the situation if it goes wrong.

3. Mitigation

To mitigate risk is to take steps to minimise the impact of a negative event occurring through careful planning. If you can’t avoid the risk altogether, or you can’t afford to accept it entirely, then mitigation is the next logical step. Precautions like insurance are common methods of risk mitigation. If the negative event does transpire, you have provisions in place to reduce the severity of the impact.

Other ways of mitigating risk include additional staff training and the formulation of contingency plans. By teaching your staff to work more safely and efficiently, they will be better prepared to handle the fallout of a negative situation. Fire safety drills are a common and often mandatory form of risk mitigation.4. Transferal

Risk transferal involves shifting the risk to an entity that you perceive to be more resilient or better equipped to handle the situation. If you identify an impending risk, delegating the task of dealing with it can help to transfer the risk to a department or staff member that is better qualified or more experienced.

Transferring financial risk among several separate entities reduces the chance of a company being irrevocably damaged by unforeseen losses. The key to effective risk transferral is knowing which entity would be the best equipped to deal with the situation. Diversify your revenue streams and ring-fence your most lucrative departments in order to more effectively transfer risk.

5. Exploitation

Risk and opportunity often go hand-in-hand. One of the best methods of controlling risk is to look for ways to exploit the situation. Assess each example of risk for any opportunity of which you can take advantage. Every financially volatile situation brings with it the chance to make money. The best way to exploit risk is to find a way to leverage the situation to your own ends. Obviously, each scenario is different but if you assess each example with a critical eye, you may be able to improve your financial performance.

Controlling risk is a difficult task but it is immensely profitable if done correctly. The money a business could lose from uncontrolled risk could put the long-term health of the enterprise in jeopardy, so it makes sense to attempt to control it at every opportunity.

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TEN MARKETING PRIORITIES WHEN YOU START YOUR BUSINESS

Fri, 12 Feb 2021 13:00:00 GMT

1. Build credibility quickly

Why should people buy from a new business? Your first challenge is to overcome their doubts by building trust and credibility quickly. Some tips:

2. Focus on solving pain points

Identify and then focus sharply on solving the customer’s challenge, whether it is a problem, a desire, or fear.

Try building a story around your product or service that the customer can relate to. Be specific and monetize your solution if possible. For example, how much does double glazing save an average house in heating costs? Wrap the savings story around other payoffs, like a more comfortable and healthy living experience – warmer in winter, cooler in summer.

Look for the ‘hidden’ pain points in your industry. Service businesses often have a reputation for being late. If you offer services, can you guarantee to arrive on time?

3. Promote your point of difference

Boil down your customer solutions into a compelling point of difference that will overcome customer hesitation. Refine this competitive advantage into a memorable slogan or a few short sentences at most. Run the result past your advisers and some small business owners. Once they approve, promote your point of difference vigorously on your website and in all your marketing material. Make sure staff can also confidently communicate it to customers.

4. Develop a strong website

A website can be a powerful marketing tool. Some priorities:

5. Use low-cost promotions first

Try the low-cost tactics first.

Direct mail and telemarketing can still be cost-effective for higher priced services or products. Small-scale runs can give you an indication of demand and allow you to experiment with different options.

Blogs and profiles on social media such as business-focused LinkedIn or people-focused Facebook and Twitter are useful ways to develop conversations with customers or potential customers.

If you are new to the social media world, then do some research first on online etiquette.

6. Start with a splash

Can you come up with some newsworthy event or gimmick to launch your business with a splash? Study how other businesses launch. Can you do better? If you can’t afford to hire a PR firm, ask a retired journalist with media contacts to help you put together some press releases.

The media are always hungry for good stories. Can you invite celebrities, influencers or well-known business people to your launch? Some innovative thinking can lead to free publicity in the local (or national) media.

7. Build a customer database

A good customer database is worth gold. It is easier and cheaper to sell more to existing customers than it is to find new customers. Start capturing customer information (with their permission) from day one and decide what details you need to include that will help you build repeat business.

For example, you can record what customers buy (and have not yet bought), how often they buy, how much they spend and when their purchases of services are likely to need renewal.

Your database will help you build a more complete profile of your customer types, so you can focus on finding more people like your best customers.

8. Network vigorously

Business is all about people. The more people you know, the better, so make an effort to get out there and meet others in the community. Join your industry or professional association and local organization such as small business networks, the chamber of commerce and community groups such as Rotary or Lions

Being able to pitch your business confidently is also important. Organizations like Dale Carnegie and Toastmasters International can help you communicate more confidently.

9. Focus on referrals

Word-of-mouth referrals are the most cost-effective way of gaining new customers because you don’t have to spend anything on advertising or marketing. Research has repeatedly shown that referrals have a higher conversion rate (enquiries to sales) and end up spending more than other customers People simply have more confidence in a business that friends or colleagues have recommended.

Referrals will happen naturally if you provide excellent service and good value, but you can improve your referral rate through an active program of incentives.

10. Measure to improve

Give preference to marketing you can measure to avoid the mistake of many businesses who don’t measure marketing results. You may be talked into some radio or newspaper ads but if you don’t measure what happens, you’ll never know if your investment was wise or a waste.

Measuring can be anything from adding a clip-out coupon or code to simply asking customers ‘By the way, how did you find out about us?’

The results may surprise you but will also empower you to focus your marketing budget on what really works.

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TIPS FOR UPDATING YOUR BUSINESS PLAN

Mon, 08 Feb 2021 15:15:00 GMT

Think of your business plan as a roadmap designed to point the way to your current destination, knowing that where you land may not be your ultimate endpoint.

After all, things are constantly changing in a healthy, thriving business. Market fluctuations, new competitors, changes in staffing or your sales figures may nudge you in a direction you wouldn’t have previously dreamed of, requiring new goals and strategies to achieve them.

Of course, a change in plans may also require refinancing – another important reason to keep your business plan up to date. These tips will help you revise your plan painlessly, so you’re best positioned to stay on course and impress a potential lender when applying for funding.

Schedule adequate time

Most likely, it took several weeks – possibly even months – to do the initial research, data organization, goal setting and number crunching when you drafted your first business plan. An update will be a lot less time consuming, but you’ll still need to set aside adequate time in your schedule to review your company mission and goals, analyze new data, consult with your accountant and decide on the most profitable strategy moving forward.

It’s recommended that you review and update your business plan at least once a year. While many business owners update their business plans at year-end, it may make more sense to time your update with your income tax cycle, to take advantage of the latest financial data available.

Do your homework

Before you sit down to revise your plan, spend a few hours reviewing the latest market research as well as your business metrics. This exercise will help you brainstorm ideas, set goals and make better decisions on how to achieve them.

Specifically, look at any untapped opportunities your business can look into as you review:

Know your numbers

Want to save time as you update your business plan? Schedule a meeting with your accountant to discuss your company’s current financial health and what you can do to maximize profits going forward. After all, your financial data is only as useful as your ability to analyze it and act appropriately. Accountants are trained to look at the facts and give you a clear-eyed view of actual results – something many business owners aren’t naturally skilled at.

Final Tip

As you prepare to update your business plan, take note: the most compelling piece to a lender, investor or any other reader is the Executive Summary. The key is to draft the Executive Summary only after you’ve completed the other sections of your business plan. That way you’ll have all the information you need to succinctly describe your company’s mission, direction and goals for success. For more useful tips on how to write an Executive Summary, take a look at this helpful post from Entrepreneur.com .

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HOW TO GET YOUR BUSINESS NOTICED ON A SHOESTRING BUDGET

Mon, 08 Feb 2021 12:49:00 GMT

Very few small businesses have a huge marketing budget to work with. Fortunately, there are a number of simple, free, and low-cost ways to get the word out about your company that are also highly effective.

These tips will show you five simple ways to promote your local business without breaking the bank.

Get free press

Advertising rates for local newspapers and radio stations can be way too costly for a small business. Instead, think about how you might generate a story the media will want to share. For instance, a grand opening, anniversary, community fundraiser or special event can be the perfect opportunity for an interview on local TV or radio. Likewise, get in touch with your local newspaper to see if they’d be interested in an article about your latest product launch or move to a new location.

Cross-promote

Partnering up with another local business for a product release, new project, or service bundle can exponentially increase exposure for your company. Brainstorm non-competing, complementary businesses in your area – then think about how you might work together to attract new customers. Cross-promotion creates an opportunity to reach out to each other’s mail lists, add each other’s business name to any mail-outs, post information about your partner’s company in-store, and team up on an event you can invite all of your customers to.

Support a cause

Start or get involved in a local fundraiser. Giving back will raise your community profile and provide free advertising while creating goodwill as you help an individual or organization in need. Schools, libraries, hospitals, and not-for-profits all benefit from volunteerism and community fundraisers. And if that isn’t reason enough, customers want to support businesses that care. Demonstrate that your company is interested in improving the wellbeing of your community and you’ll instantly gain new fans.

Host a workshop

Contact your local library, Chamber of Commerce, or small business bureau to arrange a free educational talk on a topic of interest to your target customer. Providing valuable information is a great way to build credibility, trust and initiate customer relationships. Consider a prize draw for a free product or service – and be sure to have promotional available to take away, including information on your loyalty program to entice new leads to make the first purchase.

Run a contest

Offering a prize giveaway is a fantastic way to generate buzz online and in your community. It’s also a great way to build a mailing list you can send promotional information to (with permission, of course). You can work together with other local businesses in your area to extend your reach when promoting the contest, with each company donating a prize to the basket. Without much investment, you’ll be able to offer a much more valuable prize this way – and reach many more potential customers with every business doing their part to get the word out.

Final tips

Marketing your business locally needn’t cost a lot of money, but it does take a regular time commitment. Build free promotional activities into your annual business plan, get strategic about timing your marketing.

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THE WORST BUSINESS ADVICE TO FOLLOW

Tue, 02 Feb 2021 15:35:00 GMT

When you’re a small business owner, you get used to people giving you advice. Sometimes you seek out their insights while other times they share whether you want them to or not. While the advice is almost always well-intended, it’s not always good. In fact, sometimes it’s downright awful.

Here are some tips that well-meaning people give to small business owners that definitely should not be followed.

1. Never turn down a paying customer

Money is a good thing. But that doesn’t mean you should say yes to everyone who comes through your door. Not every person who approaches you is good for your business. If your gut tells you something is off—maybe the person is very demanding or constantly questions your prices—it’s in your best interests to say no.

It’s not necessarily about the client, either. You might be very busy, and taking on another project means you’ll be giving them subpar service or using up your valuable personal time.

If possible, turn them away graciously by explaining that you’re very busy and cannot give them the attention they deserve. Consider recommending another business for them that they could turn to.

Don’t say “yes” to everyone who walks through the door just because they’re a paying customer.

2. The customer is always right

It’s often in your best interests to ensure an unhappy customer is addressed and their needs are met. But there are clients out there who will never be happy, no matter what you do. It’s okay to try to make things right with them, but you also run the risk of word getting out that you’ll bend over backwards to make customers happy. That just encourages more unhappy people to come your way. Or it encourages people to find reasons to be unhappy so they can get additional benefits from you.

If it’s a normal part of routine that customers are constantly complaining and getting some sort of reward, you need to examine your business. If the customers are truly right, then it’s time for some changes. If they aren’t right, stop treating them like they are.

3. Do what you love

In an ideal world, we’d all have jobs we love and make endless money with no added stress, all without giving up any of our personal time. That’s not how the world works. Just because you love something doesn’t mean there is a market out there for it.

It’s more important that you find something you are okay with doing—don’t take on something you hate—that fills a need. And it has to be something enough people would be willing to pay for.
That’s how you make money in business.

Final thoughts

Everyone has advice about running a small business, even if they have never run one of their own. Some of the advice is helpful but much of it is harmful. Listening to that advice can lead a small business owner down the wrong path.

When someone offers you advice on your small business, ask what credibility they have to share their insights. Have they owned their own business? Do they have knowledge of the industry you work in? Have they learned lessons you could learn from? Was their business similar to yours?

Remember, just because someone is offering advice doesn’t necessarily mean their advice is relevant to you. And just because they offer the advice—or just because the advice is a common saying—doesn’t mean you have to follow it.

Got a question about your business? Please don’t hesitate to get in touch ?

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USING SMART GOALS TO ACHIEVE MORE

Wed, 27 Jan 2021 15:04:00 GMT

As a small business owner, you’re likely always looking for ways to achieve more. Maybe you made a New Year’s resolution about it. You might have resolved to make more money, find more clients, or grow your business. It’s fantastic to have an idea of what you want to do, but how will you know whether or not you’re successful?

That’s where SMART goals come in. SMART goals help you identify what you want to do when you want to do it by, and how you’ll get it done. They give you a systematic way of deciding what goals are important—and realistic—and evaluating whether or not you’ve attained them.

SMART goals help you plan for success. They turn your resolution into action.

What are SMART goals?

SMART goals stand for goals that are Specific, Measurable, Achievable, Realistic, and Timely.

Here’s an example of a goal that is not SMART: “I want to grow my business.”

Why isn’t it SMART? It says nothing about how the business will grow, how long growth will take, how it will be attained, or how success will be measured. It’s vague, so you have no idea if you’ve been successful.

Growing your business is a great starting point for a SMART goal because you know there is something you want to achieve.

Now you need to use SMART goal setting to layout your plan.

How to use SMART goals

To use a SMART goal setting you need to ask yourself important questions. Let’s take the above example of growing a business.

Specific : Ask yourself how you want your business to grow. Do you want more clients? More revenue? More employees? What does “growth” mean?

Measurable : How many more clients do you want? How much more money do you want to earn? How many more employees do you want? Numbers work best here.

Achievable : How do you plan to reach your goal? Do you have the resources to make it happen?

Realistic : Do you currently have one client but want 100 within a week? It’s great to have goals that challenge you but asking yourself to do the impossible sets you up for failure.

Timely : How long will you give yourself to find new clients or employees? Be specific with deadlines. Don’t just say you want something done ASAP or within the year. Set a reasonable, firm deadline that gives you a chance to review your goals and determine how successful you’ve been.

Here’s the same thought above, but written from a SMART perspective:

By March 31, I will have signed three new clients for my services by purchasing advertising in the local newspaper, attending networking events, and posting on my blog once a week.

As your deadline approaches, you’ll know to review your client list and see if you’ve signed three new clients. If you have, great! If not, review your action plan and see where changes could be made.

Final thoughts

It’s great to have an idea of what you want to do, but without SMART goals all you have is an idea.

The great thing about SMART goals is you’re not limited to one goal at a time. Let’s say you want to grow your business both in terms of clients and employee size. You can set SMART goals for both those areas and work toward both at the same time.

Once you’ve achieved your goals, you can look forward to setting additional successful goals for yourself in the future.

Get in touch with us to find out how we can help you reach your business, financial and lifestyle goals.

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IDEAS FOR BUSINESS GOALS THIS YEAR

Tue, 26 Jan 2021 16:59:00 GMT

The start of the year is the perfect time to dust off last year’s business plan and set some new goals for the future.

While some entrepreneurs love planning, others feel overwhelmed by the process. How do you decide on just a handful of goals that take priority, with so many moving parts that make up a business?

These tips can help you get started brainstorming how your company can plan for greater success in the years ahead.

Redefine your brand

Is the elevator pitch you used a year ago – even six months ago – still accurate? Unless you are crystal clear on who you are as a company, whom you’re here to serve, and what you hope to achieve in the next one to three years, it’s going to be hard to come up with meaningful goals.

Take a look at your company vision, mission statement, and core values. If they need tweaking to reflect where your business is today and where you want it to go, start there. Then you can move on to setting some useful long and short term goals.

Big picture planning

Entrepreneurs dream big—and they should! Thinking big can lead to ground breaking products and services that become the foundation of innovative, successful companies.

When it comes to goal-setting, thinking big is great, too. But in order to make those big ideas like “increasing market share” or “growing profits” happen, you need to break them down into smaller, specific goals and strategies tied to a budget and timeline.

For instance, while your overarching objective may be to “grow profits by 50% by December 31”, your smaller goals might include:

The key is to define goals that are measurable and achievable.

Define smaller goals

Thinking through how you’ll achieve your larger objectives can be a fun exercise – one you can turn into a group activity, including your entire team. Sit down and discuss what you know about your customers. Review your historical sales data and look over your up-to-date budget and forecasting.

With all the relevant information at hand and everyone at the table, you can come up with strategies that align with your company vision, assign deadlines, and get buy-in on what everyone needs to do to see your ideas through to completion.

Final tips

It’s worthwhile to take some time to reflect on your personal goals as you think through your business goals. Maybe you’ve been wanting to get involved in mentoring, improve your networking skills, or attend more conferences. Self-development is, in a sense, professional development – and vice versa, so include them in your plans.

Of course, coming up with business goals is just one part of the equation. You’ll also need to monitor your progress, noting milestones and sharing your company achievements with your team on a regular basis. Tracking your results will help your employees stay motivated – and it also gives you the chance to adjust your goals and strategies in time to achieve the best possible results by year’s end.

Get a free a business performance benchmark report here first to help you set the right Objectives and Success Measures.

All free from Fortuous

‘We solve business problems’

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Growing Your Business Without Borrowing

Mon, 18 Jan 2021 05:05:00 GMT

Taking out a business loan may be your first plan of action for financing business growth. But there are excellent reasons to consider other options for finding capital to expand your business.

For one, it can be very difficult for a small business to secure financing, especially in the early days. You’ll need to prove to a lender that you aren’t a high risk, with financial documentation that shows your company has been profitable for a few years.

When you take out a loan you’ll need to consistently make payments toward the principal, interest, or both, depending on your agreement. If for some reason you can’t make your payments, the problem can snowball from losing the assets you pledged as collateral to more devastating losses, including bankruptcy.

Consider these four ways to finance growth without approaching a lender for money.

Ask for pre-payment

This option is as simple as asking your customers to pay you in advance of receiving your products or services. Explain that you are changing your payment policies and your new terms are that you receive payment on the first of the month, at the beginning of a project—whatever works for you. As the owner of your business, you get to decide when and how much you need to be paid in order to deliver your products and services.

On a related note, you might consider using a subscription model for a new income stream. Some possible subscription-based services with a recurring pre-paid fee are:

Try Crowdfunding

Crowdfunding campaigns connect individuals with a community of willing donors via a platform such as Kickstarter, Fundable, or Indiegogo in exchange for some reward.

In addition to providing an inexpensive source of financing, crowdfunding allows entrepreneurs to gain market validation for a new idea before overinvesting—and provides an opportunity to market to potential new customers. You’ll be able to start selling before your new product or service is ready so you can continue to avoid the small business debt trap.

Form an alliance

Partnering with other businesses is mutually beneficial: each company can increase their sales by introducing each other’s products and services to their own customers at no added cost. You can potentially attract brand new customers, too, by increasing your range of offerings by way of your alliance.

Likewise, a marketing alliance is a simple strategy where two companies agree to spread the word about each other’s products and services with their customers. Each partner would earn royalties on sales to the other partner’s customers, bringing in easy growth revenue without any additional marketing or advertising costs.

Final thoughts

As you move forward with your next phase of business growth—no matter how you fund it—be sure to touch base with a business advisor . Seeking the guidance of experienced business experts who can help you update your business plans, and choose the best strategies to cut costs, increase profits, and achieve your short and long-term goals, will lead to greater success.

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How Accounting Mistakes Can Hurt Your Business

Mon, 11 Jan 2021 17:45:00 GMT

Many small business owners tend to handle their own accounting and bookkeeping, especially when they’ve just started out. However, keeping track of the finance-side of the business– everything from income to expenses to tax compliance– can be overwhelming.

Unorganised Records

It takes excellent organization skills to be able to do your bookkeeping and accounting right. You would need to keep a record of every transaction, keep receipts or digitise them for future reference, calculate taxes accurately, and more. If your records are not kept organized and updated, it is highly likely that you’ll miss something out, which could get you into trouble during the tax season.

No Accounting Schedule

As a business owner, there are surely a lot of other things that you need to attend to and accounting can easily be pushed to the bottom of your seemingly endless To-Do list. Yet, it is extremely important to set an accounting schedule to add your recent income and expenses into your records. If daily updating is not possible, at least dedicate some time once a week to do your accounting.

Unreconciled Accounts

Regularly check if your bank account reflects the same balance as you record your cash flow and other financial data into your books. If you find a gap, there is likely a mistake somewhere that you need to find or even a fraudulent transaction. Taking immediate action will help you prevent worse problems further down the line.

Failing to Take Into Account Small Transactions

It can be easy to forget about minor transactions such as the office supplies that you picked up on your way to the office or the freebie that you sent a loyal customer. However, no matter how small you think the transaction is, it’s important to keep a record and get a receipt. In case of a tax audit, you will need to be able to present records of ALL business expenses, even these small ones.

Not Backing Up Data and Using Accounting Software

Imagine if the laptop where you store all your financial data was stolen, lost, or broken beyond repair and you don’t have a backup. You would need to redo everything from scratch, which could be a huge waste of time.

If you’re still using a spreadsheet or paper ledger to keep track of your business finances, you might want to consider upgrading to cloud-based accounting software such as Xero , QuickBooks , and SAGE . By migrating to the cloud, you will be able to easily back up your accounting data and even access them wherever and whenever you need to.

These cloud-based accounting systems also integrate well with your bank account and other powerful business apps. The results are streamlined processes, less manual work, enhanced efficiencies, and better overall business performance.
Spend Less Time on Your Books and More Time on Your Business

While being aware of these common accounting mistakes could help you avoid them, the most convenient and efficient approach to stay on top of your business finances is still to entrust your accounting to the experts. Our team of experienced accountants in Ilford can integrate the most suitable cloud accounting software for your business and even train your in-house staff on its proper implementation.

Let us take charge of your books, while you focus on growing your business. Get in touch with us today!

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£9000 grant announced by the Government for retail and hospitality firms hit by third lock down

Tue, 05 Jan 2021 11:09:00 GMT

Businesses in the retail, hospitality and leisure sectors will receive a one-off grant worth up to £9,000, the Chancellor has announced, as England enters its third coronavirus lock down.

Chancellor Rishi Sunak has announced new emergency support for non-essential businesses as England enters its third coronavirus lock down. A one-off grant of up to £9,000 will be available to retail, hospitality and leisure businesses, including local businesses such as florists and salons which have been ordered to close until at least February 22.

The Treasury said the new support grants will offer companies up to £9,000 through to March as part of a £4.6billion package “to support businesses as protect jobs”.

This will start at £4,000 and increase in line with the firm’s rateable value.

In total, an estimated 600,000 properties are expected to benefit, however, many groups warned they will be excluded from the new support, despite mandated closures.

The Chancellor said a further £594million will be made available to councils and devolved nations to support businesses not covered by the new grants.

“Throughout the pandemic we’ve taken swift action to protect lives and livelihoods and today we’re announcing a further cash injection to support businesses and jobs until the Spring.”

“This will help businesses to get through the months ahead – and crucially it will help sustain jobs, so workers can be ready to return when they are able to reopen.”

The grants will be provided on a per-property basis to support businesses through the latest restrictions. It will be available in addition to the furlough scheme which has been extended until April this year.

To apply for support, businesses should contact the local authority in which their business is based.

The one-off top-ups will be granted to closed businesses as follows:

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Prepare a business plan for COVID-19 recovery

Sun, 13 Dec 2020 08:00:00 GMT

You probably didn’t factor a global pandemic and national lockdown into your business plan! So now is definitely a good time to revisit your business plan for the next year. We know that writing a plan can feel like a big effort so we have created a template to make it easier. Please get in touch if you’d like to talk about your plan – especially the financial parts like cash flow.

What is a business plan?

Your business plan is a management tool, designed to suit the structure and needs of your particular business. There is not a one-size-fits-all business plan, or a set formula that you have to follow.

This leeway to design your own business plan can feel quite daunting at first, but this is easy to solve if you identify the reasons why you need a business plan. These could include setting business goals and objectives, establishing performance requirements and assessing whether these have been achieved, or communicating messages to people inside or outside your company.

The structure of your business plan

A business plan usually serves a number of purposes. It is a good idea to identify the purposes you’d like your business plan to achieve because this could affect how you choose to structure and write your plan. For example, you’re likely to focus on different information depending on whether your plan is intended as in internal document for management to refer to, or for raising finances from an external source. There is no set way to structure a business plan, the format is one of personal preference.

If you’re writing your business plan as part of the process of applying for a loan, it is a good idea to include a one-page cover letter. The cover letter should include the following.

If you are applying for a loan, you will probably also need to include more detailed personal information, including your tax returns, bank account statements, assets, liabilities and other business interests.

Writing your business plan

Keep your business plan as short and simple as possible. Use simple language and short sentences so that it is easy to understand and edit your draft to remove unnecessary words. Use bullet points or tables if this makes ideas easier to read or understand.

Present your facts and information so that they flow logically rather than jump around, and make sure that the information presented in different sections supports each other. You don’t want to present information that does not add up or raises questions about the accuracy of your plan.

Do not give in to the temptation to overstate the truth, and bear in mind that the figures you present will need to back up the words in your business plan.

Start by jotting down points and ideas under each of the headings you plan to include in your business plan. Then sort these ideas so that there is a logical flow. At the same time, look out for any gaps or weaknesses and fill them in with the necessary research.

Start writing your business plan as soon as possible. Feel free to use our template to get started. Keep editing and refining your work to keep it clear and concise.

Writing your executive summary

Your executive summary is a very important part of your business plan. It is the first section people will read and provides a brief but complete overview of your entire business plan. Because it contains reference to the entire business plan, the executive summary is usually written towards the end of the business plan writing process.

Your executive summary should be less than three pages, simply written and to the point, with an emphasis on the key issues of your business plan and a focus on the areas that will make your business successful in a competitive market. Use your plan’s table of contents to map out your summary and elaborate on the areas that are important. It is a good idea to end your executive summary with a short statement of why your business is poised to be a success.

The table of contents

The table of contents will appear before or after the executive summary. It is a list of headings with page number references that help your reader locate specific information in your plan. The numbering of the headings in your table of contents is one of the last things you will do when completing your business plan.

The presentation of your business plan

The presentation of your business plan could be one of the first impressions someone gets of your business. It is a good idea to include a cover page and to bind your business plan with a cardboard or plastic front and back cover so that it is professionally presented.

It is also important that the layout is neat and professional looking and that the pages are numbered. Spend a little extra time on the presentation of your business plan to ensure it presents your business in the best possible light.

Does my business plan need an external review?

Your business plan does not need to be approved or verified by anyone, but it is a good idea to let a few people read your draft business plan before you finish it and print it out.

Paying to have your business plan professionally proof read will ensure that it is free of spelling and grammatical errors. Asking our advisors and a few business acquaintances to read through your plan will also help to identify any inconsistencies or gaps in the information.

Writing your business plan will give you ideas

Taking a step back from your business to really examine its weaknesses, true financial position and growth goals, as well as looking at what is happening in the market, will give you a some great ideas. More often than not this process helps you see things in a new light

Got a question about your business plan? Get in touch with us.

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Battling Through COVID-19: Finance Tips for Business Survival

Sat, 12 Dec 2020 14:11:00 GMT

We’ve heard this before: the COVID-19 pandemic is an unprecedented global health and financial crisis that has caught many off guard. While the threats to human life are very real, the damage to the health of businesses is really just starting to show.

The seriousness of the disease and the lack of a vaccine (at the time of writing this) have prompted governments around the world to impose strict measures to contain the virus. These restrictions in people’s movements and the temporary shutting down of non-essential services have definitely taken a toll on businesses.

While there has been a lot of talk on how to avoid contracting the virus and how businesses can operate safely to adapt to the current conditions, this article will focus on helping you manage the financial aspects of your business to survive COVID-19. Read on for our tips on cushioning the impact on your business.

Update your financial records.

The first step in planning your course of action in such a difficult environment is getting a crystal clear understanding of the financial position of your business– this means updating your financial records and keeping them in order. Knowing things such as your cash position and assets that can be sold quickly will go a long way in helping you make informed business decisions. Good records build a solid foundation for a successful business. They’re also really important when applying for government grants.

Examine the financial health of your business.

Following on from the first item, it is important to get a good grasp of your business’ current financial health through a careful analysis of your books and statements. By looking at key financial figures, you will get an idea of how your business is doing. You can see fundamental factors such as the liquidity and solvency of your business which will help you decide on the best steps forward as you deal with the crisis and the aftermath. Chat to us for help with these financial pieces.

Improve your cash flow.

A lot of businesses across the world are facing cash flow problems at the moment. You are certainly not alone. However, the key here is not letting the problem worsen.

Preparing a cash flow forecast should give you some forewarning before issues even arise and will allow you to address them early on. By quantifying your forward bookings, forward orders, and work in progress, you will get to identify future cash flow and plan accordingly.

You can also take the following measures to boost your cash flow:

Increase online sales where possible.

With the government implementing stricter restrictions to prevent the further spread of the virus, you should find ways to move your products and services online – if you can – and continue to serve existing and new clients. The situation that we are in is forcing business owners to re-imagine their business and re-evaluate their business models. You’ve got to adapt and be resilient. It’s those businesses that will survive.

Survive 2020 by Managing Your Financials

It’s safe to say not many of us factored a global pandemic into our 2020 business plans. Although there is no foolproof strategy to get through what’s proving to be a turbulent 2020, the finance tips shared here should be able to give you some guidance on minimising the risks on your small business.

Want some more help? Our team of advisors love to help businesses. We’ll help you develop a plan to weather the headwinds of the coming months, while saving you time and money along the way. Contact us today and we’ll work through it together.

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The top 10 time wasters

Thu, 03 Dec 2020 15:43:00 GMT

What are your biggest time wasters? Identify your top three and take ownership and responsibility to minimise them today!

“Regretting wasted time is wasting more time.” – Anon

Get in touch to find out how we can help you plan more effectively!

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Are accountants a cost or an investment?

Tue, 01 Dec 2020 15:30:00 GMT

As accountants, we’re always helping our clients find ways to reduce their overhead costs – one of the seven ways to grow your business. Did you know that your accounting fees are an overhead cost? Should you be cutting this cost? Or do you view us as an investment?

Expenses are a necessary evil; we can’t avoid them and often view them as a grudge purchase with little value add.

An investment, on the other hand, is about the return on your spend – what you get back as benefits; more cash, more discretionary time, or simply peace of mind that everything is done as it should be.

The true purpose of an accountant is to provide enduring value to you and your business. It’s no longer just about annual accounts and tax. We believe that all our clients should have, at a minimum:

• An annual Business Plan
• An annual Cashflow Forecast
• Ongoing accountability coaching

Clients who are investing in these services are reaping the rewards. They know where they want their business to go and have identified the goals they need to achieve to get there.

If you consider what you spend with your accountant to be a cost, then cut that cost; if you consider it an investment, you need to invest now more than ever.

“The biggest expense is an opportunity cost.” – Anon

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Small Business Rate Relief and other Grants

Wed, 18 Nov 2020 13:39:00 GMT

As you can imagine as a result of recent announcements, we at Fortuous are extremely busy and we are trying our very best to assist as many of the business as possible.

The majority of the calls are in relation to the recent central government announcements about the grant and other business funding support which is being delivered in the main through either Local Authorities, HMRC, employers, various funding institutions. Having looked at your enquiry this would fall into these categories and therefore I am outlining below the most recent announcements as well as suggestions for links to sign up to which will keep you up to date with the latest news etc.

Latest COVID 19 Announcements

Businesses and Employers Bulletin can be obtained via this link

Latest Guidance

Guidance on closing certain businesses and venues in England:

For an updated list of business venues which must close or operate on a restricted basis (e.g., takeaway only) during the lockdown in England can be found here .

Guidance for venues:

If your venue can stay open during the national restrictions put in place on 5 November 2020 in England, you must follow the guidance on maintaining records of staff, customers and visitors in order to support NHS Test and Trace. For more information, click here.

Guidance for food businesses

Guidance for food businesses in England on how they operate during Covid has been updated to reflect the national restrictions in place from 5 November. Click here for further information.

Guidance for aviation

Further guidance on Safer travel and working principles for airports and aviation operators in light of England’s national restrictions in place from 5 November is available here.

If unsure whether you can be open please contact your Local Authority

Job Retention Scheme

The Chancellor of the Exchequer announced on Thursday 5 November 2020, t he extension to the Coronavirus Job Retention Scheme (CJRS) , also known as the ‘furlough scheme’, to the 31 March 2021. For claim periods running to January 2021, employees will receive 80% of their usual salary for hours not worked, up to a maximum of £2,500 per month. The policy will be reviewed in January to decide whether economic circumstances are improving enough to ask employers to contribute more. The Job Support Scheme is postponed.

For more information, click here.

Check to see the updates on:

For information on claiming for wages through the scheme click here .

Self Employed Income Support Scheme

The Self-Employment Income Support Scheme grant extension, that provides critical support to the self-employed in the form of grants, has been extended and made available for 3-month periods covering November 2020 to January 2021 and February 2021 to April 2021. The grants will increase from 55% to 80% of average profits – up to £7,500. For more information about the scheme click here.

Timing: HMRC will pay this more generous grant sooner than planned and in good time for Christmas – the window for claiming a grant will open on 30 November, two weeks earlier than previously announced.

The Government has already announced that there will be a fourth SEISS grant covering February to April. The Government will set out further details, including the level, of the fourth grant in due course.

Guidance to clarify the eligibility conditions for Universal Credit and New Style Employment and Support Allowance, to add Pension Credit, New Style Jobseeker’s Allowance and the Test and Trace Support Payment as other financial help that can be claimed, is available here.

Job Retention Bonus

The JRB will not be paid in February and we will redeploy a retention incentive at the appropriate time. The purpose of the JRB was to encourage employers to keep people in work until the end of January. However, as the CJRS is being extended to the end of March, the policy intent of the JRB falls away.

Cash Grants for Business

Business Grants:

Business premises forced to close in England due to local or national restrictions will be eligible for the following:

Local Authorities will also be receiving funding to support other businesses via a discretionary grant.

In addition to this-

Backdated cash grants for businesses in Tier 2/3 areas in England. Businesses in the hospitality, leisure and accommodation sectors that suffered from reduced demand due to local restrictions introduced between 1 August and 5 November will receive backdated grants at 70% of the value of closed grants up to a maximum of £2,100 per month for this period.

As these have only just been announced please be patient whilst your Local Authority puts the processes and procedures in place in order to deal with this new money.

We would strongly recommend that you sign up to receive business newsletters/e-bulletins/alerts from your Local Authority to make sure you don’t miss out on any funding . It is likely they may put applications online via their website.

Investment in Green Recovery

The government are investing £134 million in UK businesses to support innovative green businesses during the coronavirus pandemic and to encourage a green recovery. For more information, click here.

Tax Cuts and Deferrals

The temporary 15% VAT cut for the tourism and hospitality sectors will be extended to the end of March next year. In addition, business who deferred their VAT bills will be given more breathing space through the New Payment Scheme, which gives them the option to pay back in smaller instalments.

Self-assessment taxpayers will be able to benefit from a separate additional 12-month extension from HMRC on the “Time to Pay” self-service facility, meaning payments deferred from July 2020, and those due in January 2021, will now not need to be paid until January 2022.

Business rates relief for hospitality, retail, leisure and nurseries until the end of March 2021

Flexed Loan Schemes

The Prime Minister announced on Monday afternoon that the government’s three Coronavirus business interruption loan schemes – the Coronavirus Business Interruption Loan Scheme (CBILS), the Coronavirus Large Business Interruption Loan Scheme (CLBILS) and the Bounce Back Loan Scheme (BBLS) – and the Future Fund will be extended to 31 January 2021.

It was also announced that eligible businesses will be able to ‘top-up’ existing Bounce Back Loans should they need additional finance.

The top-ups are only available from a borrower’s existing BBLS lender. A borrower can apply for a top-up that is for the lesser of £50k or 25% of the annual turnover the borrower certified in their original successful BBLS application form, minus the value of their original loan.

Worked examples

Under the Bounce Back Loan Scheme top-up, if a borrower had certified an annual turnover of £100,000 in their original application and taken a Bounce Back Loan of £20,000 (20% of that certified annual turnover), they can ask to borrow an additional £5,000 (5% of that certified annual turnover), taking their Bounce Back Loan to the maximum 25% of their originally certified annual turnover.

Bounce Back Loan Scheme top-up features

How to apply

A short form template application form will be available from the Bounce Back Loan Scheme accredited lenders. Borrowers must complete this application form to be eligible for a top-up.

The top-up application form will require borrowers to indicate the amount of the top-up requested and re-provide certain declarations set out in the original Bounce Back Loan application form.

Further details and conditions are available on the Bounce Back Loan Scheme page on the British Business Bank website. The British Business Bank Press Notice can be accessed here .

Further information on the changes to the four schemes will be available on the British Business Bank website in due course.

Insolvency

Measures put in place to protect businesses from insolvency will be extended to continue giving them much-needed breathing space during the coronavirus.

We would also recommend you contact ICAEW

Universal Credit Update

£500 payments for those on low incomes in England who are asked to self-isolate for 14 days, and £500 million Hardship Fund for local authorities to use to help the most vulnerable.

Struggling to pay essential bills?

If you are struggling to pay key commitments please see the new government guidance and support

Mortgage payment holidays will continue to be available for homeowners in the UK. Borrowers who have been impacted by coronavirus and have not yet had a mortgage payment holiday will be entitled to a 6- month holiday and those that have already started a mortgage payment holiday will be able to top up to 6 months without this being recorded on their credit file. The FCA published draft guidance setting this out on 2 November.

Payment holidays will also continue to be available for consumer credit products such as personal loans and car finance . As with mortgages, borrowers impacted by coronavirus who have not yet taken a payment holiday on that product can ask for one of up to 6 months and those that currently have a payment holiday will be eligible to top up to six months without this being recorded on their credit file. Borrowers with high-cost short-term credit products such as payday loans will continue to be entitled to a maximum monthly payment holiday. The FCA published draft guidance on this on 4 November.

Also, we would recommend that you sign up to the Martin Lewis website.

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Furlough Scheme extended in UK

Mon, 02 Nov 2020 15:33:00 GMT

Over the weekend, Boris Johnson announced a second national lockdown to take effect from this Thursday until 2 December.

In light of this, the furlough scheme, which was due to end on 31 October, has been extended for the period of lockdown. We are still awaiting full details of the scheme and how it will differ from previously, but what we know currently:

Questions remain, including whether new written agreements will need to be entered into, or whether existing ones can be rolled over, and also whether employees recently made redundant can be re-employed and furloughed.

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The Invisible Force That Brings Disorder

Fri, 30 Oct 2020 14:03:00 GMT

So many things are wrong in any business at any time and how ever well managed it may be, the phenomenon of ‘entropy’ sets in immediately.
(Entropy is sort of like Murphy’s Law applied to the entire universe. Put simply, it’s a measure of disorder. This fun article brings it to life https://science.howstuffworks.com/entropy.htm )

So, don’t beat yourself up when things don’t work as they should, but expect it, and build that into the way you work.

Entropy or its consequences hit your business daily, from the marketing that brought you great inquiries that didn’t turn into orders, to the reliable customer that left you without warning, the great IT system that collapsed, the app that stopped working, the people who didn’t show up, the cash flow that went into reverse and a promising investor who ghosted you.

And don’t tell me that none of that has ever happened to you! You couldn’t foresee any of these, so the best you can do is to plan for things going wrong. But that’s hard to do if you’re a start up with no resources, and irrelevant if you’re an established business that’s going well and thinks that will continue.

However, both businesses can be wiped out by an ‘entropic event’ from an unseen or disconnected source, like COVID19 wrecking world economies or the sudden demise of your big customer who got taken over and changed suppliers without warning.

So, to what extent can the expectation of entropy and its consequences be incorporated into the reasonable planning and management of any business?

It’s important to accept at the outset that things will go wrong every day, often invisibly at first, however well planned you are. And to accept that the role of management is to fix these as they occur. But if that’s all you are doing, it becomes firefighting instead of controlling events.

The best you can hope for is to anticipate what you can, plan to minimise the impacts, and hope to survive. But how does one do that when so much can go wrong and from so many unanticipated angles? I suggest…

The simple and well-established safeguard of SWOT analysis on a regular basis, assessing your business as follows:

For your meeting agenda, ask everyone to consider what is happening or coming at you right now under the PESTLE headings:

After you’ve written all their answers on the wall, vote for the priorities under each (1-2-3 is enough). This exercise takes 2 hours, every quarter and only costs you a sandwich lunch for the key people around you eg: 1 each of – staff, partner, supplier, customer. The outputs are always brilliant, provided you ban all judgements and criticisms of what anyone says during the meeting (otherwise you will kill creativity).

I guarantee one world beating idea each time you make this tiny investment.

By doing so quarterly you will stay on top of the waves that runs through the local and national economies that are the forecasters of entropic effects on your business.

Where do I begin?

If you are already firefighting you will feel you don’t have the time or energy to organise a SWOT session. If you are in a great place right now, you won’t feel the need. In both cases you are already affected by entropy. The process of decay has hit the firefighter and caused complacency in the ‘great business’

But do I need really need to bother?

Well, as a business advisor / consultant I’ve worked for over 1000 businesses and all of them called me in after something had gone wrong. I cannot think of one that said “give me a health check because I want to see if I’m OK or heading for ‘Not OK’”

Mostly, I was able to save or turn around those businesses, but the costs were dire because of the damage already done before I got there, plus my fees for having to put in so much time. I always ask the boss “why didn’t you call me a year ago?” and the ever-loving answer was “I thought I could work through it myself”

So, the culprit was entropy. The business was decaying and so was the owner’s resilience to fix it.

Is there a quick and easy way to entropy-check any business?

Yes. Technology can do it in 15 minutes. How? it’s a matter of identifying the key drivers for any business and comparing these to the performance benchmarks of the top third in its industry sector. The gaps identified can then expressed in terms of lost sales, profits, capacity and value as an incentive to take action. From these, the system will work out which areas are most suffering from entropy and suggest remedies.

Schedulde an appointment with Fortuous Limited to see that in action.

It doesn’t cost anything and brings you a comprehensive report that is yours to implement and overcome entropy.

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Getting the support you’re entitled to during Covid-19

Mon, 26 Oct 2020 15:03:00 GMT

With so many small business owners struggling to access support, we wanted to make finding information easier. Now you can answer 11 quick questions and government support checker will tell you what you’re eligible for.

Find coronavirus financial support for your business

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Job Support Scheme in UK

Mon, 26 Oct 2020 14:15:00 GMT

The Job Support Scheme (JSS) will open on 1‌‌‌ ‌November and run for six months, until 30‌‌‌ ‌April 2021. The government has said it will review the terms of the scheme in January 2021. There are two variations to JSS – JSS Open and JSS Closed .

JSS Open

This scheme will provide support to businesses that are open where employees are working shorter hours due to reduced demand. Your employees will need to work at least 20% of their usual hours. You will continue to pay employees for the hours they work, and the UK government will pay a contribution of 61.67% of the usual pay for hours not worked, up to a maximum of £1,541.75 per month. You will pay 5% of the usual pay for hours not worked, up to a maximum of £125 per month, and can top this up further if you choose. This means employees should receive at least two-thirds of their usual pay for hours not worked.

The caps are reduced according to the proportion of hours not worked. Further guidance on this will be available on GOV‌‌‌‌.UK shortly.

You will need to cover all employer National Insurance and pension contributions.

JSS Closed

It will provide support to businesses whose premises are legally required to close as a direct result of coronavirus restrictions set by one of the four governments of the UK. This includes premises restricted to delivery or collection-only services from their premises and those restricted to providing food and/or drinks outdoors.

For JSS Closed, the UK government will fund two-thirds of employees’ usual wages for time not worked, up to a maximum of £2,083.33 per month. You will not be required to contribute, but you can top up the government’s contribution if you choose to. You will still need to cover all employer National Insurance and pension contributions.

You’ll be able to make your first JSS claim in arrears from 8‌‌‌ ‌December, for pay periods ending and paid in November. We’ll let you know more about how to make a claim by the end of this month.

Your employees will be able to check if you have made a Job Support Scheme claim on their behalf through their online Personal Tax Account. Employees can set up a Personal Tax Account on GOV‌‌‌‌.UK, by searching ‘Personal Tax Account: sign in or set up’.

Job Retention Bonus (JRB)

You’ll be able to claim a one-off payment of £1,000 for every eligible employee you furloughed and claimed for through the Coronavirus Job Retention Scheme (CJRS), kept continuously employed until at least 31‌‌‌ ‌January 2021 and who meets the other eligibility criteria. You do not have to pay this money to your employee.

You will be able to claim the bonus between 15‌‌‌ ‌February and 31‌‌‌ ‌March. To do this you must have submitted PAYE information for the period up to 5‌‌‌ ‌February 2021 on time.

Further information on eligibility and when you can claim can be found on GOV‌‌‌‌.UK by searching ‘Job Retention Bonus Guidance’ and further guidance on the claim process will be published by the end of January 2021.

Coronavirus Job Retention Scheme – closes on 31‌‌‌ ‌October

Please note that this scheme closes on 31‌‌‌ ‌October and you will need to make any final claims on or before 30‌‌‌ ‌November. You will not be able to submit or add to any claims after 30‌‌‌ ‌November .

From 1‌‌‌ ‌October , the UK government has paid employers 60% of usual wages up to a cap of £1,875 per month for the hours furloughed employees do not work.

You continue to pay your furloughed employees at least 80% of their usual wages for the hours they do not work, up to a cap of £2,500 per month. You need to fund the difference between this and the CJRS grant yourself .

The caps are proportional to the hours not worked. For example, if your employee is furloughed for half their usual hours in October, you are entitled to claim 60% of their usual wages for the hours they do not work, up to £937.50 (half of £1,875 cap). You must still pay your employee at least 80% of their usual wages for the hours they don’t work, so for someone only working half their usual hours you’d need to pay them up to £1,250 (half of £2,500 cap), funding the remaining portion yourself. For help with calculations, search ‘Calculate how much you can claim using the Coronavirus Job Retention Scheme’ on GOV‌‌‌‌‌.UK.

You’ll also continue to pay employer National Insurance and pension contributions from your own funds.

You must keep the records that support the amount of CJRS grant you have claimed in case HMRC needs to check it. You can now view, print or download copies of your previously submitted claims by logging onto your CJRS service on GOV‌‌‌‌.UK.

Protect yourself from scams

Stay vigilant about scams which may mimic government messages as a way of appearing authentic. Search ‘scams’ on GOV‌‌‌‌‌.UK for information on how to recognise genuine HMRC contact. You can also forward suspicious emails claiming to be from HMRC to phishing@hmrc.gov.uk and texts to 60599.

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Claim tax relief for your job expenses

Thu, 15 Oct 2020 14:41:00 GMT

Working from home

You may be able to claim tax relief for additional household costs if you have to work at home on a regular basis, either for all or part of the week. This includes if you have to work from home because of coronavirus (COVID-19).

You cannot claim tax relief if you choose to work from home.

Additional costs include things like heating, metered water bills, home contents insurance, business calls or a new broadband connection. They do not include costs that would stay the same whether you were working at home or in an office, such as mortgage interest, rent or council tax.

How much you can claim

You can either claim tax relief on:

You’ll get tax relief based on the rate at which you pay tax. For example, if you pay the 20% basic rate of tax and claim tax relief on £6 a week you would get £1.20 per week in tax relief (20% of £6).

Elgibiligy checker

Check if you can claim tax relief through this scheme

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Getting ready to exit your business? You’ll need a strategy

Mon, 14 Sep 2020 15:00:00 GMT

If you are looking to exit your business or have a future plan to do so, you need a strategy. When you sell up, you want your business to have as much inherent value as possible – so you get a good price, a great return on your investment and the best possible payout.

So, how do you take yourself ‘out of the business’ as the founder, add the best value and set up an effective and financially beneficial exit strategy?

Adding value to the company

The more attractive the business looks in the market, the better the price you’ll achieve, or the better the yield you’ll see on selling your company shares.

To drive that value:

Talk to us about exiting your business

If you’re looking to sell up, you need a plan. Come and talk to us about creating a workable exit strategy, with a clear focus on driving value and delivering a solid return on your investment.

Get in touch to build your exit strategy.

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Are you eligible for a grant through the Kickstart Scheme?

Thu, 10 Sep 2020 08:00:00 GMT

The UK Government is continuing to offer support to businesses as they wrestle with the aftermath of the ongoing Coronavirus pandemic and their latest offering is the Kickstart Scheme. This scheme is perfect for employers looking to create job placements for young people, let’s explore this in more detail.

What is the Kickstart Scheme?

Available in England, Scotland and Wales, businesses can use the Kickstart Scheme to create new 6-month job placements for young people who are currently on Universal Credit and at risk of long-term unemployment.

Applications must include a minimum of 30 job placements and funding is available for National Minimum Wage for 25 hours a week, plus associated employer National Insurance contributions. In addition to this, there is also £1,500 per job placement available for things such as set-up and support costs.

Sounds great, what are the requirements?

Any organisation can apply for funding providing:

If your business is unable to offer the minimum requirement of 30 job placements, you can partner with other organisations to reach this.

How to apply

If your organisation is creating more than 30 job placements as part of the Kickstart Scheme, you can submit your application directly.

Start your application

Contact Fortuous

To learn more about managing your small business finances, contact Fortuous today and speak with an experienced London accountant who can answer any questions you might have. Be sure to click this link to Get An Instant Quote today!

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Does your business have a CRM tool?

Fri, 04 Sep 2020 15:06:00 GMT

Having clean, up-to-date information and data about your customers is a vital part of running your business. But recording, tracking and accessing this customer information can be tricky if you don’t have the right tools to get the job done.

Client relationship management (CRM) tools offer a fast and effective way to manage all of this customer information. A CRM solution provides one central hub for recording all your customer data. This data could be the basics of customer name, address and contact details, notes from meetings, records of sales activity or information on the customer’s marketing preferences.

So, how does having a CRM tool help you do business? Let’s take a look…

A centralised hub for managing your customer relationships

Without a CRM system in the business, your sales and marketing team have to rely on manual, organic processes to manage the company’s customer information. It’s likely that you’ll be relying on multiple spreadsheets, diary reminders and scribbled notes to manage your customer and prospect relationships. And in this day and age, that’s just not an efficient or productive way to keep on top of your customer data.

With a CRM system in place, you can:

A simple CRM tool can make your business more efficient; give you better control over sales and help you to support existing customers.

We are experts and will take care of all your accounting headaches, from bookkeeping & vat through to annual accounts, tax and company secretarial. our lean processes are state of the art, giving you a hassle-free experience.

Talk To Our Team Today

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How to get £5,000 Small Business Technology Grant

Fri, 07 Aug 2020 15:42:00 GMT

If your business has fallen on hard times due to the ongoing coronavirus pandemic, you are definitely not alone. New research shows that almost one fifth (17 per cent) of small-and-medium- sized enterprises (SMEs) are unsure if they will survive the pandemic. We have seen mass redundancies, longstanding businesses suffer closures and even big corporations take a loss in profit. The retail and hospitality sectors have suffered the worst hit and almost three quarters (73 per cent) of small firms experience a drop in their income during lockdown.

Those who have suffered the worst by far is SMEs. With more than 16.5 million people employed by SMEs, it’s definitely a worrying and uncertain time for a lot of businesses.

Government Intervention

Fortunately last month, the government announced that they will be providing £20m worth of grants for small businesses to upgrade technology. SMEs are now able to access a small business technology grant between £1,000 and £5,000.

The purpose is to help small businesses upgrade technology, equipment and even hire professional advisors.

Administered by the Government’s 39 regional growth hubs, here’s a few things you can focus on with the grant:

You can find the list of growth hubs where you apply for the new £1,000 to £5,000 small business technology grants here .

SMEs are at the centre of the economy, they provide employment and opportunity for many. They contribute significantly to local economies and community. It is great to see the Government both recognise and support this. Hoping for a much-needed boost and motivator for the country’s small businesses, this new funding should help aid businesses in recover, rebuild and, of course, adapt following the fallout of the coronavirus pandemic. It is also a chance to access new equipment and perhaps upgrade procedures and technology too.

Contact Fortuous Limited

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5 Tips To Managing Your Small Business Finances

Tue, 14 Jul 2020 11:21:00 GMT

In many countries all over the world, small businesses are crucial to the economy. That is more prevalent now than ever in the wake of the COVID-19 crisis. Now that lockdown measures have been lifted and businesses throughout the UK are reopening, many small to medium businesses are struggling with their cash flow. Studies show that a large percentage of small businesses end up closing their doors after just a few years of operation. When unexpected external problems happen, they typically don’t have the cash they need to make up for the unexpected losses and they need external help to manage their finances. This is where accountants for small businesses in London can be especially useful.

Having said that, let’s take a look at some ways that small to medium and enterprise level businesses can manage their finances more effectively in today’s post- COVID-19 world. Let’s get started:

5 Tips To Managing Your Small Business Finances

Speed Up Receipt Of Cash- sluggish cash flow can hurt many small businesses, especially if they don’t have enough cash reserves to operate. It’s important for any business to send out invoices immediately and shorten payment terms. Offer small discounts if certain customers are willing to pay early and always be ahead of the agreed schedule to further speed up payments.

Maximise Earning From Sales- updating your pricing structure regularly is a good way to maximise your earnings without selling more products. Your prices should always match your target profit margins.

Slow Down Outgoing Cash- businesses can maintain a steady cash flow just by slowing down their outgoing cash. You can do this by using low-interest business credit cards to pay for supplies and equipment.

Control Spending- every business should perform regular financial evaluations to look for any possible ways to reduce their overhead. Use less paper, rely on digital documents, reuse, and repurpose items, negotiate for discounts and ask for extended payment terms.

Hire An Accountant- accountants for small businesses in London can help your small business maintain control over your finances and forecast future profits to ensure long term sustainability and growth.

Contact Fortuous

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Dealing With Uncertainty – Tips For Business Owners

Mon, 22 Jun 2020 15:59:00 GMT

Whether you’re in full lockdown, restricted trading conditions or back to ‘business as usual’, there’s still real uncertainty for London business owners. We are trading in challenging times at the present, and knowing what step to take next is a key worry of many London SMEs. We know that you invest more than simply time and money into your business, and that it is much more than just a job, but a part of your identity.

So, how do you get more clarity around your future plans? And how do you work on the short-term future of your London small business when sales, income and cash are in short supply?

Focusing Your Efforts In The Right Places

Planning the next business move is difficult at the best of times, but it’s doubly problematic when we have so little clear idea of what a post-COVID19 business world will look like. This is where an experienced London accountant can help. By ensuring that your London small business finances are accurate, you can have a much more sustainable business in the long term.

It’s difficult to plan when we don’t know what will be possible. What regulations will be in place once you can begin trading? Will the market have changed dramatically? Will you be able to trade over borders and continue to be an international operation? Will you have enough cash to actually operate?

As a London SME owner, you’ll be continually thinking of new business-critical issues to add to this list – but the reality is that you CAN’T control all these elements. This sense of mounting uncertainty is likely to raise your stress levels and make you more anxious. So, how do you overcome these worries and find a practical solution?

Try to focus on the things you can control:

It’s can become very overwhelming to try and work on everything at the same time. Instead, try to focus on just one thing that you can achieve each day. This can include:

Review Your Overheads And Costs- one way to reduce your cashflow worries is to reduce your spending. Look at your controllable overheads and see if there are ways to negotiate better terms with suppliers, cut down on expenses or pause any subscriptions.

Talk To Debtors And Creditors- if you can bring down your aged debt, that will help your overall financial health. Talk to any late-paying customers and agree when these debts will be paid. And talk to suppliers about extending payment terms, if possible.

Consider Alternative Revenue Streams- if your current London SME model doesn’t work well in lockdown, are there other online services that you could diversify into? Any new revenue streams will help to bolster your income and cash position.

Update Your Website And Marketing- having a great online presence is vital during this crisis, when most goods and services will be purchased online. Give your website a refresh and make it easy for potential customers to find and buy your services.

Catch Up With Your Team- maintaining contact with your employees is vital if you’re going to nurture team spirit. The more engaged your team is, the easier it will be to embrace change together.

Talk To Us About Other Strategies For Dealing With Uncertainty

If you’re uncertain about the impact of COVID-19 on your London SME , please do come and talk to us. A London accountant will help you get in control of your finances, prioritise the right elements of your London small business and find a strategy that prepares you for trading in the post-coronavirus market.

Contact Fortuous

To learn more about Cash Versus Accrual Accounting for your small business, contact Fortuous today and speak with an experienced London accountant who can answer any questions you might have. Be sure to click this link to Get An Instant Quote today!

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Cash Versus Accrual Accounting Explained

Wed, 17 Jun 2020 09:02:00 GMT

The difference between cash basis and accrual basis accounting comes down to timing. When do you record revenue or expenses? If you do it when you pay or receive money, it’s cash basis accounting. If you do it when you get a bill or raise an invoice, it’s accrual basis accounting.

Cash Basis Accounting

Small Business (or SMEs) that use cash basis accounting recognise income and expenses only when money changes hands. But because this doesn’t take upcoming expenses into account, it could leave you with the idea that you have a higher balance than you actually do and your financial reports could be inaccurate.

Accrual Accounting

Small business that use accrual accounting recognise income as soon as they raise an invoice for a customer. And when a bill comes in, it’s recognised as an expense even if payment won’t be made for another 30 days. This means you have to watch invoices, not just your bank account, and this why you need a professional tax accountant

Hybrid Accounting

Some types of small businesses use a hybrid accounting system. There are lots of rules around who can and can’t do this. Speak to Chartered Certified Accountant find out what applies to you.

Contact Fortuous

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What Can You Do To Prepare Now, For A Return To Business?

Mon, 08 Jun 2020 13:51:00 GMT

In the context of the Covid-19 outbreak, the duty to remove or minimise health and safety risks in your London small business has become increasingly difficult. When lockdown measures ease, London SME s will need to have a plan on how they will manage their finance risks and protect workers and customers before they start operations.

Keeping Your Workplace, And The People You Work With Safe

Many London small business owners are still unable to operate or are required to work from home. If you are one of the London SME s that are able to return to work, you will need to think about the following safety measures:

Strict Hygiene Measures- disinfecting surfaces and allowing people to have easy access to soap and water and/or sanitiser so they can maintain high levels of hygiene. Reminding staff with posters about how to reduce risk will be important too.

Social Distancing For Employees- the goal is to limit the interaction between people. Can you set up split-shifts for staff or ensure that only essential workers come to the workplace in order to reduce interactions?

Social Distancing For Customers And Suppliers- offering online purchase and contactless delivery. If people come into a London small business , have a plan for a managed entry system, with space for people to maintain a safe distance from others.

Contact Tracing- you may need to record who is working together and any other people such as suppliers, customers, or a tradesperson who you have contact with.

Providing Protective Equipment, If It Is Required- you may not need PPE equipment but if it is necessary, you’ll need to be able to supply workers with the items they need.

Have A Plan To Respond To Suspected Infection- make sure everyone can identify symptoms (fever, cough, sore throat, and shortness of breath). Unwell people should stay home.

Employee Engagement- work together to discuss and agree the new working arrangements.

Have A Plan For Managing Employee Absences- who is essential to your business operation? Have a plan in place if staff are unable to work.

Communication With Customers- you’ll need to consider how you will communicate with customers.

Your workplace will need to operate consistently with public health guidance. For more information on which London small businesses and venues that must remain closed visit the Government website.

Contact Fortuous

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Local Restrictions Support Grant (LRSG)

Mon, 01 Jun 2020 14:26:00 GMT

The Local Restrictions Support Grant (LRSG) supports businesses that have been required to close due to temporary COVID-19 local lockdown restrictions imposed by the government.

The Local Restrictions Support Grant (LRSG) supports businesses that were open as usual, providing services in-person to customers from their business premises, but which were then required to close for at least 3 weeks due to local lockdown restrictions imposed by the government.

It is for businesses that pay business rates on their premises. Local councils may at their discretion also provide funding for businesses that don’t pay business rates.

Eligibility

Your business may be eligible if it:

For example, this could include non-essential retail, personal services or cafes/restaurants that operate primarily as an in-person venue, but which have been forced to close those services and provide a takeaway-only service instead.

Eligible businesses will get one grant for each property liable for business rates within the lockdown zone.

Businesses that are required to close but do not pay business rates may be eligible for funding at the discretion of the local council, as may businesses not required to close but which are severely impacted.

What you will get

If your business is eligible and has a property with a rateable value of less than £51,000, you will receive a cash grant of £1,000 for each 3-week period your business is closed.

If your business is eligible and has a property with a rateable value of £51,000 or above, you will receive a cash grant of £1,500 for each 3-week period your business is closed.

The grant will be extended to cover each additional 3-week period, so if your business is closed for 6 weeks it will receive £2,000 or £3,000, depending on the rateable value of the property.

Grants will be based on the rateable value of the property on the first full day of local lockdown restrictions.

Discretionary funding

You may receive a grant of up to £1,500 at the discretion of your local council if:

Your local council will publish details of discretionary funding on their website.

Exclusions

How to apply

Visit your local council’s website to find out how to apply:

Find the website for your local council .

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The Benefits Of Creating A Holding Company

Mon, 01 Jun 2020 14:17:00 GMT

Once your small business gets to a certain size and turnover, there’s real value in assessing the company structure and learning how to make things more tax-efficient. Setting up a holding company is one way to start creating an ordered and effective group structure. And by moving any surplus cash up from your trading company to your new holding company, you protect your profits and can, potentially, reduce your tax liabilities.

Separating Your Trading And Investment

When all your surplus cash, profits and personal shares are wrapped up in one single small business, that can often cause problems further down the line. With all your eggs in one basket, there’s an inherent risk built into your company structure and, in a worst-case scenario, if the business fails, you could end up losing everything.

But with separate trading and holding companies, held within a defined group structure, you can begin to protect your company and your own personal interests.

To Start The Process Of Creating A Group Structure:

Create A New Holding Company- a holding company is the ‘parent’ at the top of your group structure. This entity is entirely separate to the trading business where your shares are held and will sit at the very top of the structure, with your trading company and any other subsidiaries beneath it.

Transfer Your Trading Shares- the next step is to transfer your existing trading company shares over to the holding company, in exchange for shares in the holding company. This gives you control over the holding company, but also enough share rights to also control the trading business as well.

Move Your Profits- excess cash can be moved from the trading company to the holding company in a tax-efficient manner, which protects any profits by ring-fencing them within your newly created holding company. And if the trading company were to fail, for whatever reason, these profits are protected and safe.

As your interests grow, you can add further subsidiary companies to this basic group structure, presenting an organised structure to the local revenue office and also reducing the potential risk within the wider business.

Talk To Us Setting Up A Group Structure

If you want to protect the long-term future of your business and investments, an experienced Chartered Certified Accountant can help you create a robust group structure – safeguarding the future of your business and the profits you’ve built up.

Contact Fortuous Limited – Accountants in East London

To learn more about the benefits of creating a holding company for your small business, contact Fortuous Limited today and speak with an experienced accountant who can answer any questions you might have. Be sure to click this link to Get An Instant Quote today!

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Understanding Your Statement Of Cash Flows

Wed, 27 May 2020 10:17:00 GMT

The statement of cash flows, (also known as the cash flow statement), shows how your business has generated and used cash (and cash equivalents) within a specific time period. For each of the finance reporting categories, receipts and payments are listed (money in and money out), and this is reported as a net increase or decrease in cash held for that category.

The net change in all categories is added to the amount of cash on hand at the start of the reporting period to arrive at the current cash on hand figure at the end of the reporting period. It is another important financial statement to understand in conjunction with the Profit and Loss statement and the Balance sheet. These three reports provide your tax accountants with a good understanding of the financial position of your SME business .

How Does It Work?

The cash flow statement integrates the information provided by the profit and loss statement and the balance sheet into a current cash position. The cash flow statement is reported on a cash basis, while your other financial statements are usually reported on an accrual basis. Accrual income (from the profit and loss statement) is converted to cash by calculating the changes in the balances of asset and liability accounts.

Report Categories

The statement of cash flows is organised into sections that report on different types of business activity.

Operating Activities- all small business income, expenses, assets, and liabilities (except for those assets and liabilities reported in investing and financing activities).

Investing Activities- the purchase and sale of long-term investments, property, plant, and equipment as well as security deposits paid to suppliers or received from customers and dividends received.

Financing Activities- the changes in balances of equity accounts, for example, issuing and repurchase of stocks and bonds and payment of company dividends if applicable. Loans are also included in finance activities.

Formal financial report packages usually include notes to the finance statements. The notes contain supplemental information that explain significant items or activities that did not involve cash transactions. The notes may also include detailed reporting of categories that may have been reported as summary totals only in the profit and loss, balance sheet and statement of cash flows. Other items such as taxes, employee provisions, risk management or related party transactions may also be detailed in the notes.

Why Is It Useful?

The statement of cash flows gives you a valuable measure of cash flow in and out of your small business owners over a given period. It shows the ability of the business to pay its bills and fund its operating activities. This gives you a picture of overall performance.

It also shows the relationships between assets, liabilities, equity, and cash accounts. It shows changes and movements over time, whereas the balance sheet and profit and loss reports show account values at a single point in time.

The statement of cash flows gives you vital information on your business:

If you’d like to understand your financial statements, cash position and future outlook in more depth, arrange an advisory session today. We’ll help you identify and appreciate the strengths of your small business.

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Small Business Tips for Exiting Lockdown

Thu, 21 May 2020 18:08:00 GMT

In recent weeks the direction of discussion surrounding the COVID-19 pandemic has turned to the measures and strategies for coming out of lockdown and what this means for businesses. For many businesses, of all sizes, the lockdown was challenging, forcing a lot of brick and mortar businesses to close temporarily, and many offices to learn how to work from home. Leaving lockdown and the hope of going back to normal is exciting and a positive thing for businesses, but there is understandably some anxiety around what the new normal will look like and how business founders can ensure success when they reopen. Here are some small business tips for exiting lockdown successfully.

Staff Briefing

We all know that it’s the staff that make the businesses a success or not, and it’s important to make sure that everyone feels safe and comfortable going back to work. Support your staff by hearing their concerns, implementing their feedback and providing them with information and resources. Keep them up to date with government advice, ask about their health and wellbeing and ensure they don’t work if they show symptoms of illness. Remind them to give each other space and not share items such as pens, keyboards or drinks to limit unnecessary contact.

Social Distancing

Though the rules and restrictions may change in the long-term, it is wise to assume that social distancing will be necessary for a while yet, and potentially, as attitudes change, people may adopt more personal space than before. Small businesses should plan for their customers to want more space and ensure their shops are set up to meet their needs. It’s crucial to put the customer’s needs first and ensure they feel comfortable and happy in your business. The British Retail Consortium has suggested that businesses limit the number of people in store and potentially barrier the walkways to protect social distancing measures.

Hygiene

Most people’s attitudes surrounding hygiene and cleaning has changed for having this experience, including customers and your staff. It’s important that everybody feels happy and safe and that includes your team! Where possible, minimise face to face contact among staff and implement no-contact deliveries. Provide hand sanitiser and anti-bacterial soap in staff and customer bathrooms as well as the front of store for customers to use at their will. If your small business has baskets or trollies, provide a sanitation station to disinfect and wipe down handles. Small businesses would also do well to note other touch points such as doors, keypads and handrails and increase the rate of cleaning and disinfecting in those hot spots too.

By staying alert, being proactive and implementing new changes, your small business can open safely after lockdown and can get back on its feet. If these changes require extra budget or you need finance help to assess what support might be available to your business, don’t hesitate to get in touch to get a quote from our team at Fortuous. Get an instant quote here .

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Small Business Rate Relief (SBBR)

Fri, 15 May 2020 15:13:00 GMT

The government has announced small businesses that already pay little or no business rates will
be eligible for a one-off coronavirus grant worth up to £3,000.

For a commercial property with a rateable value of £12,000, this is one-quarter of its rateable
value, or comparable to three months of rent.

The government will also review the long-term future of business rates, a property tax which
many say is unfair given the rise of online shopping and out-of-town retail parks.
The discount that pubs receive on their business rates will increase from £1,000 to £5,000.
This comes on top of the government announcing in the 11 March Budget that companies in the
retail, leisure and hospitality sectors with a rateable value of less than £51,000 will not pay any
business rates this year.

However, the £3,000 coronavirus grant only applies to small business in England. Business rates
in Scotland, Wales and Northern Ireland are set by their devolved administrations.

The additional £2.2bn of funding for local authorities is part of a package of fiscal measures to
help small business survive the coronavirus pandemic.

Around 700,000 businesses in England currently eligible for Small Business Rate Relief (SBBR)
or Rural Rate Relief can apply for the emergency funding.

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Preserving Your Business Through Lockdown

Mon, 11 May 2020 10:52:00 GMT

After the shock of going into lockdown and either temporally closing or moving business operations to working from home, it’s time to consider your business’s next steps. How you support your customers and suppliers now will impact how you work together in future. We’re all in this together and now is a time for empathy, communication, and collaboration to get the best outcome for all.

Supporting And Maintaining Strong Customer Relationships

Communication is vital; keeping your customers up to date with what’s happening in your business will let them know that you are still in business. If you’re still operating, ensure that your customers are informed of any changes or disruptions that could affect their service.

Some customers will be struggling with cashflow so consider offering payment term flexibility. Be sure to agree upon payment expectations before providing your products or services.

If your business is unable to operate, consider how you can keep your customers engaged. Increased traffic on social media platforms is a great opportunity to capture their attention. Utilise videos to engage your customers and a wider audience. For example, a café might share popular recipes to make at home; a builder may share how-to videos for basic DIY or projects for kids; a retailer could share product reviews; a hairdresser could show how to create different hairstyles.

If you’re a retailer and you don’t currently sell online, now is the time to tackle this project. Even if you can’t start selling until the lockdown has been lifted, get it set up and ready to go.

Contact Us

To learn more ways to support and maintain strong customer relationships, or how Fortuous can help your business become sustainable during the COVID-19 crisis, contact us today for an instant quote .

Working With Your Suppliers

Call each of your suppliers to understand how they’re impacted and how this will flow on to your business. If your business is still running, discuss their supply chain and measures they’re taking to continue supply. Review your contract, paying particular attention to your obligations, the supplier’s obligations, payment terms, cancellation of orders, and whether there are any clauses which change the terms in times of crisis.

Honestly is crucial, if you simply don’t have the cashflow available to pay them; ask if you can spread the cost over a longer time period or work together to agree on an achievable payment arrangement. Review all of your contracts, including supplier contracts and contracts with lessors of premises, vehicles, and equipment. You may need to renegotiate significant terms to reduce your cash outflow.

Contact Us Today

To learn more about working with your suppliers, or how Fortuous can help your business during the COVID-19 crisis, contact us today for an instant quote .

Managing Your Cashflow

Managing your cash should be a key focus right now. Take the below steps to manage your cashflow:

It’s not too late to make a plan for business continuity. The sooner, the better. Contact us today for an instant quote to learn more.

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The Value Of Cashflow Forecasting During A Crisis

Mon, 04 May 2020 10:23:00 GMT

During the ongoing corona virus crisis, many sectors are seeing income either disappear completely or drop to dangerous levels. To be able to navigate the future path of your cash flow, you need to start forecasting. This will enable you to better map out your financial position over the coming months and take the appropriate actions to safeguard your cash position.

Sound confusing? Let one of our financial advisors assist you and answer any questions that you might have. Contact us today for an instant quote to learn more.

Forecasting Your Future Cash Pipeline

Projecting your cash flow pipeline forwards during a crisis is vit al. Having access to detailed forecasts helps you to scenario-plan, search for cost-savings and look for strategies that will preserve your cash flow position.

Remaining in control of the cash coming into (and going out of) the business is the real focus. This will enable you to accurately predict your financial position and resolve any issues.

If you are looking for ways to more effectively forecast your future cash pipeline, contact us today for an instant quote to learn more.

Key Ways To Get More From Your Forecasting

Run Regular Forecasts- The financial landscape is changing on a daily basis at present. A cash flow forecast is not a document that remains static. Variables and external drivers are literally changing each day, so it’s vital that you run frequent forecasts and react swiftly to any projected cash issues as they become apparent.

Use The Latest Cash flow Forecasting Apps- cash flow forecasting apps, like Fluidly, Float, or Futrli, integrate with your Xero accounts, giving a drilled-down view of how your cash inflows and outflows will pan out over the coming months – information that will inform and justify the decisions you make during these extremely challenging times.

Explore The Right Revenue Streams- most sectors will have seen their face-to-face sales drop to absolute zero since quarantine restrictions came into place. To overcome this, there’s a real imperative to explore revenue streams and new opportunities for income. An example of this is coffee shops that now sell roasted beans online (this will depend on lockdown restrictions). The idea is to find ways to increase the money that’s coming in the door and balance out your unavoidable expenses.

Get Proactive With Cost-Cutting- if you can reduce cash outflows to a minimum, that will have a real impact on the health of your future cash flow. Pare back your operations and aim to reduce things like unnecessary software subscriptions, or over-ordering of basic supplies. Negotiating cheaper rates with suppliers, if possible, will also help.

Review Your Staffing Needs- now’s not the time to make anyone redundant, but you can look at ways to reduce the costs of staffing and resourcing. Reducing working hours or redeploying staff in different roles are all options that reduce payroll costs, while also looking after your staff’s welfare.

Run A Variety Of Scenarios- changing the financial drivers in your forecast model allows you to scenario-plan different strategies and options. Many of these will be in a long-term plan when restrictions ease. Effective scenario-planning lets you answer questions and will give you some hard evidence on which to base your decision-making and strategic outlook over the coming months.

Look At Various Ways To Access Funding- if forecasts show a giant cash flow hole coming up, you’re going to need additional funding to get through this crisis. We can assist your business to investigate funding opportunities from grants, banks, loan providers, alternative lenders, and crowd-sourcing funders.

Talk to Fortuous Limited about setting up Cash-Flow Forecasting

Forecasting is an important step to give you the business intelligence you need to support your decision making. Get in touch to improve your control over cashflow and for an instant quote to learn more.

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Bounce Back Loan scheme

Tue, 28 Apr 2020 14:08:00 GMT

Supporting small and medium-sized businesses during coronavirus

This scheme will help small and medium-sized businesses affected by coronavirus (COVID-19) to apply for loans of up to £50,000

This scheme isn’t available yet and will launch on 4 May 2020.

Loans between £2,000 and £50,000

The Bounce Back Loan scheme is designed to support small and medium-sized businesses looking to borrow between £2,000 and £50,000.

Flexible terms available

Loan terms will be up to 6 years.

100% government backed

The government will guarantee 100% of the loan and there won’t be any fees or interest to pay for the first 12 months.

Is your business eligible?

You can apply for a loan if your business

Ineligible businesses

The following businesses aren’t eligible to apply

Important information

You can’t apply if you’re already claiming under the Coronavirus Business Interruption Loan Scheme (CBILS) .

If you’ve already received a loan of up to £50,000 under CBILS and would like to transfer it into the Bounce Back Loan scheme, you can arrange this with your lender until 4 November 2020. We’ll share more details about this as they become available, so please keep checking for more information.

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Are You Paying Too Much Tax?

Mon, 27 Apr 2020 13:36:00 GMT

Paying Tax Is An Inevitable Part Of Doing Business

The more your income grows, the more tax you’re liable to pay. You’re rewarded for your success with a bigger tax bill. While we don’t want our clients to avoid paying tax or evade the tax department, we do want them to pay only the amount of tax they are legally liable for. If you want to significantly lower your tax bill, contact one of our personal or business tax professionals today for an instant quote.

Many Business Owners Don’t Understand The Tax Deductions And Other Benefits Available To Them

We want to help you arrange your financial affairs to you can minimise your tax and pay only what you should. Tax legislation is constantly changing. Our team of experienced tax professionals are up to date with any changes and understands how those changes can affect our clients. It is our goal to reduce your tax bill using the most effective methods possible.

Changes to your personal circumstances can also affect how much tax you need to pay. There could be a better way to structure your affairs, so you pay less tax. Contact us today for an instant quote to learn more.

Some examples of areas where you could reduce your tax bill include:

We Can Assess Your Tax Situation And Save You Money

We can review your financial reports and identifying potential tax saving opportunities in your business to determine the most appropriate tax structure for your circumstances. We can also advise you on the financial implications of your current and planned arrangements.

We won’t just make recommendations; we’ll ensure you understand your tax obligations and give you peace of mind that you’re compliant with all tax legislation.

Knowing exactly how much tax you’ll have to pay means you can set aside the right amount of money on a regular basis, so you’re prepared for the bill and won’t incur penalties or interest. Contact us today for an instant quote to learn more.

“The only thing that hurts more than paying an income tax is not having to pay an income tax.” – Thomas Dewar

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Coronavirus Business Interruption Loan Scheme (CBILS)

Tue, 21 Apr 2020 14:27:00 GMT

How you access this scheme?

CBILS is available through the British Business Bank’s 40+ accredited lenders, which are listed on the British Business Bank website here .
Note: Not every accredited lender can provide every type of finance listed.

In the first instance, businesses should approach their own provider – ideally via the lender’s website. They may also consider approaching other lenders if they are unable to access the finance they need.

Decision-making on whether you are eligible for CBILS is fully delegated to the 40+ accredited CBILS lenders. These lenders range from high-street banks, to challenger banks, asset-based lenders and smaller specialist local lenders.

Note: if the accredited lender can offer finance on normal commercial terms without the need to make use of the scheme, they will do so.

Additional application notes:

Given there is likely to be a big demand for facilities once the scheme goes live, we ask you to please:

What types of finance are avaialble and who offers which type?

CBILS supports a wide range of business finance facilities, including:

Note: Not every lender can provide every type of finance listed.

CBILS is available through the British Business Bank’s 40+ accredited lenders, which are listed on the British Business Bank website here .

Am I elgible for finance under CBILS?

The scheme is designed to support smaller businesses (SMEs) who don’t meet a lender’s normal lending requirements for a fully commercial loan or other facility, but who are considered viable in the longer-term.

To be eligible for a facility under CBILS, your business must:

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UK Furlough Scheme, who can claim?

Wed, 15 Apr 2020 14:01:00 GMT

Who can claim

Any UK organisation with employees can apply, including:

You must have created and started a PAYE payroll scheme on or before 28 February 2020 and have a UK bank account.

Employees you can claim for

Furloughed employees must have been on your PAYE payroll on 28 February 2020, and can be on any type of contract, including:

If your employee is on unpaid leave

If your employee does volunteer work or training

If your employee is on Maternity Leave, contractual adoption pay, paternity pay or shared parental pay

Individuals who are on or plan to take Maternity Leave must take at least 2 weeks off work (4 weeks if they work in a factory or workshop) immediately following the birth of their baby. This is a health and safety requirement. In practice, most women start their Maternity Leave before they give birth.

If your employee is eligible for Statutory Maternity Pay (SMP) or Maternity Allowance, the normal rules apply, and they are entitled to claim up to 39 weeks of statutory pay or allowance.

Employees who qualify for SMP, will still be eligible for 90% of their average weekly earnings in the first 6 weeks, followed by 33 weeks of pay paid at 90% of their average weekly earnings or the statutory flat rate (whichever is lower). The statutory flat rate is currently £148.68 a week, rising to £151.20 a week from April 2020.

If you offer enhanced (earnings related) contractual pay to women on Maternity Leave, this is included as wage costs that you can claim through the scheme.

The same principles apply where your employee qualifies for contractual adoption, paternity or shared parental pay.

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£330 billion worth of loans during pandemic

Wed, 18 Mar 2020 10:05:00 GMT

The UK government will guarantee £330 billion of bank loans to firms to stop them from going bankrupt during the coronavirus outbreak, Chancellor Rishi Sunak has said.

Speaking at a press conference alongside Boris Johnson, he said the government would guarantee the lending package — which is equivalent to 15% of the UK’s GDP — in order to support both large and small businesses struggling to pay rent and salaries. Further money will be available if businesses demand it.

“Today I am making available an initial £330 billion of guarantees, equivalent to 15% of our GDP,” he said.

“That means any business who needs access to cash to pay their rent, their salaries, suppliers, or purchase stock, will be able to access a government-backed loan or credit on attractive terms. If demand is greater than the £330 billion I am making available today, I will go further and provide as much capacity as required.

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Coronavirus government statutory sick pay – how to apply for it

Tue, 17 Mar 2020 14:40:00 GMT

The government will meet the cost of coronavirus statutory sick pay (SSP) for small businesses with up to 250 employees for 14 days, providing over £2 billion for up to two million businesses.SSP will now be available for eligible individuals diagnosed with coronavirus or those who are unable to work because they are self-isolating in line with government advice.
The weekly allowance for SSP will increase from £94.25 to £95.85 on 6 April.
This is in addition to the change announced by prime minister Boris Johnson that SSP will be payable from day one instead of day four for affected individuals.

Coronavirus help for self-employed

For more information about coronavirus government statutory sick pay, go to the Department for Work & Pensions website .

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How do I get the government £3,000 coronavirus grant?

Tue, 17 Mar 2020 14:29:00 GMT

The government has announced small businesses that already pay little or no business rates will be eligible for a one-off coronavirus grant worth up to £3,000.For a commercial property with a rateable value of £12,000, this is one-quarter of its rateable value, or comparable to three months of rent.

This comes on top of the government announcing in the 11 March Budget that companies in the retail, leisure and hospitality sectors with a rateable value of less than £51,000 will not pay any business rates this year.

However, the £3,000 coronavirus grant only applies to small business in England. Business rates in Scotland, Wales and Northern Ireland are set by their devolved administrations.

The additional £2.2bn of funding for local authorities is part of a package of fiscal measures to help small business survive the coronavirus pandemic.
Around 700,000 businesses in England currently eligible for Small Business Rate Relief (SBBR) or Rural Rate Relief can apply for the emergency funding.

We will update you as more information from the government and local authorities become available.

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Remote working: how to get your business ready

Tue, 17 Mar 2020 14:13:00 GMT

In a crisis, the ability for your staff to work remotely could, quite literally, be a lifesaver.But how do you set up your team to become remote workers? And what are the key considerations to think about when working remotely in the cloud?

Key considerations of remote working

61% of global companies currently have some sort of remote working policy for their staff, according to a 2019 survey. But for remote working to be effective, your business needs to put some serious thought into the infrastructure, security and culture around home-working.

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Covid-19. Information for UK Businesses

Mon, 16 Mar 2020 16:31:00 GMT

Whatever your business, it’s likely that COVID-19 will be impacting you.

You may be dealing with stock shortages, exporting issues, disrupted travel plans or a sales downturn due to tourist drop off. The key now is to plan ahead for this disruption.

Planning for business disruption

The UK government has provided guidance for employers and businesses.This includes:

You’ll want to have a plan on how to look after or protect your staff, how to manage sick leave and self isolation, plus consider issues around privacy. Setting up remote working is another option – allowing employees to self-isolate, if deemed necessary, and continue working.

Coronavirus support from the Chancellor’s Budget 2020

The Chancellor of the Exchequer, Rishi Sunak, has announced a number of coronavirus-related measures in his first Budget on 11 March 2020

A £12 billion package of targeted COVID-19 measures was announced to help the National Health Service, support UK businesses and fund continued research into the virus.

Key business measures include:

Talk to us about reducing COVID-19 disruption.

Read the UK Government advice on COVID-19 for employers and businesses .

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8 key things restaurant owners struggle with everyday

Mon, 11 Mar 2019 10:33:00 GMT

It’s a shocking truth, especially for new restaurateurs: Food and labour costs usually range between 62%-68% for every pound in revenue, with profits only reaching between 2%-6%.

With razor-thin profit margins, restaurants can’t afford for accounting problems to throw off their finances. One missed entry could spell a recipe for disaster.

Avoiding some of the most common restaurant accounting problems can help you keep your finances in line so you can stay in business:

1 – Monthly financial statements don’t provide a big picture look at your restaurant

Hopefully, you’re looking at monthly financial statements to gauge your restaurant’s performance. But if you’re looking at monthly income alone to make business decisions, you could be missing out on increasing your profitability.

In many cases, your monthly financial statement isn’t available until halfway through the next month. at that point, it’s harder to adjust employee schedules or food purchasing in order to control costs. These decisions must be made immediately if you want to give you a restaurant the best chance of survival.

You should consider setting up automatic management reports that allow you real-time information so that you can manage a restaurant proactively. Ideally, you can view weekly summaries of your costs and sales, including the following:

● Sales by category

● Labour costs by role

● Cost summaries

● Customer totals and average check size

● Break even points

2 – Payroll reports don’t help you to manage labour costs

Payroll reports and labour costs are two different things, but they’re commonly treated as interchangeable. The problem with looking at payroll reports alone is that it doesn’t provide the level of detail restaurant managers need to properly manage their labour costs.

This is too important a detail to overlook, as labour can make up more than a third of total revenue. Knowing this, your hiring and scheduling methods can be critical factors in determining your restaurant’s success.

Your payroll reports should include enough information to support effective decision-making. You can break your payroll reports down into job-related categories, such as front of house and back of house staff and their respective subcategories. This can help you improve your scheduling methods and even affect the way you higher and compensate your employees.

In addition, detailed reports can help you better identify Trends within each category. as a result, you may be able to anticipate or identify problem areas where profits are leaking and take action immediately.

3 – Inefficient accounts payable

If you’re spending all day preparing checks, logging invoices, and chasing signatures, you’re killing your profits.

Automation and technology have come a long way, especially for restaurants. Many food and beverage vendors now allowed you to download your invoices electronically instead of keeping paper copies. You can import them directly into your bookkeeping software, code them with a few simple clicks, and send payment without hassle.

This cuts out unnecessary time chasing down approvals, managing hard copies, and potentially losing important information. Plus, you can include fail-safes and customizable functions to mitigate issues.

4- Menu items not priced accordingly

If you’re setting your menu prices based on what your competitors charge their customers for similar items, you could be sabotaging your profits.

Each item on your menu should be costed to gauge its profitability and support your menu prices. Your accountant can help you calculate the true cost of each menu item by using the food prices set by your vendor and converting that cost to how you use each item in your recipes. Keep in mind that this process will need to be performed each time your vendor changes the price that you pay for items.

In addition, your accountant can set up a menu profitability system that takes into account each item’s gross profit and its popularity. This can give you an idea of where your best sellers are and how much you should be charging.

5 – Inventory isn’t prioritized every accounting period

If you’re wondering why your food and beverage costs are so volatile, you may need to take a long, hard look at your inventory procedures.

It’s important to perform physical counts and adjustments of your inventory every accounting period. Without routine inventory, your food and beverage costs will be largely an accurate.

Other than labour, food and beverage costs are restaurants’ largest expense, ranging from 30 to 36% of every pound of revenue. The good news is that food and beverage costs are also your biggest expense that you can control. You may not be able to operate without a minimum staff, but you can exercise control over food and beverage cost regardless of how many patrons you serve in a day.

However, it’s impossible to make business decisions the impact these costs if you’re not performing regular physical inventory. If you’re not adjusting for changes in your inventory, your financial statement will only show how much food you’re buying, not how much are using.

6 – Food and beverage costs are not properly categorized

Are you struggling to identify accounting errors? It could be due to the fact that your costs don’t provide enough detail. Otherwise, how can you know whether the problem is related to food, wine, or a combination of the two?

Consider creating separate food and beverage accounts for each category so that you can better identify problems as they arise. For example, you may have separate categories for food, wine, beer, and non-alcoholic beverages, and break each of these categories by sales, inventory, and purchases. You can also break down food into more specific categories, such as meat, bread, and produce.

7 – Excessive errors in your restaurant bookkeeping aren’t resolved

It’s not uncommon to find an error in your restaurant bookkeeping, but what do you do when these errors keep appearing? Or worse, additional errors continue to crop up at an alarming rate?

Take a look at a few of the most common errors that restaurant experience in their bookkeeping:

● Daily cash on hand is reported as income

● Meal discounts aren’t properly documented

● Sales tax isn’t accurately recorded

● Gift certificates are recorded as income, not liability

● Payroll taxes paid by the employer is logged as wages

This isn’t a comprehensive list by any means, but it should give you an idea as to the scope of errors that could occur in your restaurant bookkeeping.

Work with your accountant to perform accurate bank reconciliations and review all entries, including daily sales activity, inventory changes, sales tax, gift cards or certificates, and capital usage.

8 – Monthly accounting periods don’t fit the restaurant’s ideal schedule

The days in every month very, and it could explain why your profitability fluctuate so much.

Going by monthly financial periods result in income statements that never seemed accurate. Rather, many restaurants use a 13 Period Accounting Calendar, which breaks down into 4-week intervals. This allows you to better compare your performance to previous periods since each period has the same number of days.

In addition, each period contains the same number of each day. For example, there are four Mondays, four Tuesdays, etc., so restaurants can get better visibility into their performance.

Fortuous shares technical details and resources via articles like this. We intend to keep our visitors informed and educated as much as possible.

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Tax Years and the 9-month Golden Rule

Thu, 26 Jul 2018 11:54:00 GMT

Financial years vary from country to country as per their existing taxation laws.

In the UK, the tax years are different for individuals and companies.

Individuals

Start Date: 6 ^th April of the current year End Date: 5 ^th April of the following year

Companies/Corporate Structures

Start Date: Anniversary of the Company Incorporation Date in the current year

End Date: Normally 12 months long, except in the first year when the period runs from the date of company formation until the end of the same month the following year.

Why it is important to be aware of your tax year?

Individuals – Individuals who are registered for self-assessment for any purpose (either self-employed or directors of Limited Companies) must file their tax returns within 9 months of the financial year end. In the UK, the date everyone remembers is 31 ^st January: You must submit your tax return before 31 ^st January of the following year.

Example for Financial Year 2017-18 for an individual:

Mr X is a self-employed person. Being self-employed, it is important that Mr X is registered for self-assessment and submits a tax return to HMRC. Mr X’s current financial year runs from 06 ^th April 2017 to 05 ^th April 2018. He must declare all earnings from all sources in his 2017-18 tax return and submit it to HMRC before 31 ^st January 2019.

Limited Companies

Example for Financial Year 2017-18 for a limited company: Limited company X has a financial year from 1 ^st July 2017 to 30 ^th June 2018. Assuming this is not their first trading period, their submission deadline will be 31 ^st March 2019. The best practice will be to submit to HMRC at the same time, along with the tax return.

Don’t companies have an additional 3 months to submit their tax returns to HMRC?

Yes, they do but why put your organization at risk? Responsible and professional accountants will prefer to submit the company tax return and the company accounts to HMRC at the same time they are submitting to Companies House.

I can easily bore you with a technical debate of 9 vs. 12 months and the different deadlines for Companies House and HMRC, but there’s really no need. For simplicity and ease of understanding, please remember the golden rule of 9 months to submit your accounts to both Companies House and HMRC.

In sum…the 9-month rule applies to both individuals and limited companies.

At Fortuous Chartered Certified Accountants , we believe in helping ensure the simple and basic understanding of taxation and accounting rules. Hence, our articles. Our aim is not to indulge in technical debates or confuse businesses further with complex taxation and accounting laws.

We believe that as a successful business owner, you should be aware of this information about submissions and deadlines. True, your accountants are responsible for keeping you and your business in full compliance with accountancy & taxation laws. Yes, it’s the accountant’s job to ensure your accounts and tax returns are filed with the relevant authorities in time. However, we give you important information, so you can follow up and be on the safe side.

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Late Filing Penalties by HMRC

Mon, 18 Dec 2017 04:02:00 GMT

Not Filing tax returns to HMRC

At time we have observed that people get themselves registered for self employment for one reason or another without realising that it becomes compulsory for them to file tax returns to HMRC every year with out failing. Most of the time , people think as they have not earn any income or have not really engaged in self employment activities so there is nothing to declare. But this is where the burden start increasing and late filing penalties kick in.

If you fail to submit the tax return before 31st January, even though you have nothing to declare, HMRC imposes automatic late filing penalties. You’ll get a late filing penalty of £100 if your tax return is up to 3 months late. You’ll have to pay more if it’s later. Interest is charged on both unpaid tax and unpaid penalties.

Most of the times, these penalties are incurred mainly due to ignorance and as the years pass by, the amounts start accumulating and become very scary. We have seen it on numerous occasions and have presented the case to HMRC and successfully won many many appeals. The image to this post is real live example of the client where we have won the appeal on behalf of our client and saved thousands of pounds.

Reasonable Excuses

You can always appeal against late filing penalties, if you have reasonable excuse like

The Solution

The above may or may not apply to you and there could be other mitigating circumstances that can be looked into. If you for any reason find yourself in this position, always refer to tax adviser and seek professional help. That can save you money and undue stress.

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Beauty Salon turns to cloud accounting to gain control

Tue, 12 Dec 2017 06:31:00 GMT

Mary runs a small beauty salon in east London with a small team, offering first class hair, beauty, grooming and aesthetic treatments . As the business started to grow, Mary had neglected the financial aspect of her business and found that although sales were increasing, profitability was not.

The problem

At her year-end accounts sign-off meeting, it was clear from a discussion around a three-year business performance review for Mary’s operations that she was making bad decisions around pricing because she did not have access to meaningful numbers to help her with those decisions.

The Solution

As a result of that discussion, Mary agreed to move onto a cloud accounting solution. Once set up and configured, she was then able to quickly reconcile all of her bank transactions every morning, see what was in the bank and what was due to come in and go out and also track important gross profit margins for her main products and services. In turn, we are able to keep an eye on those numbers with our accountants’ access to the live accounting file and be alerted when anything goes off track so that we can send Mary a note if need be.

The Result

Mary now feels in control of her business and as a result of having timely and accurate information, she has been able to adjust prices so that she makes the margins she needs to achieve her profitability goals. Interestingly, as a result of increasing her prices, her team has become even more focused on creating value for clients, resulting in a true win-win situation.

If you feel moving to a cloud accounting solution could be helpful for your business, contact us at the link below and we’ll be in touch to discuss how we can help.

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Wholesale paint supplier and accountant working together

Mon, 04 Dec 2017 11:18:00 GMT

A local wholesale paint supplier had been a client of their accountant for eight years. The relationship had traditionally been around year end tax and compliance. Two years ago, the accountant discussed the idea of business growth with her client.

She said she had been thinking about the business and had run some numbers to take a look at the potential in terms of profit and cash flow improvement. She demonstrated to the client that by achieving some small improvements in a range of different areas, sales could be increased by 20%, the majority of which would drop straight to the bottom line.

The client was excited about the opportunity and decided to work with the accountant to make it happen. Each month, they focused on the following key performance indicators:

The client was the implementer; the accountant helped set up the systems, monitored the results, compared actual results to budgeted targets and held the client accountable.

Ultimately, the accountant facilitated a workshop with the client’s sales team to help come up with a sales ‘playbook’ – one, best practice way of selling the business’s product. By measuring sales conversion rates (by person), constantly raising the bar on targets and being the sounding board and accountability ‘buddy’ that the client needed, the sales potential growth of 20% was overachieved in year 1. The client is delighted and considers his accountant as an integral part of his business’s advisory team.

Because of our strength with numbers, we can work with you to put together a similar plan. Contact us if you’d like to discuss how we might help you.

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What Is A Self Assessment Tax Return and Do I Need One?

Mon, 27 Nov 2017 12:11:00 GMT

You have probably heard of a self-assessment tax return. But what is it, and how do you know if you need one?

Many people have trouble figuring out if they need to file a tax return .

However, your first experience with filing a self-assessment tax return doesn’t have to be hard. So we made it easy for you.

If self-assessment tax returns confuse you, and you want to find out whether you need to submit one, keep reading. This article will answer all off your questions, so let’s dive right into it!

What is Self Assessment?

Self Assessment is the system used by the Her Majesty’s Revenue and Customs ( HMRC ) to collect income tax.

The vast majority of employees pay taxes through the Pay As You Earn (PAYE) system. This system deducts your taxes automatically every time you receive a paycheck from your employer.

But not everyone gets their paycheck through an employer. Also, some people must submit tax returns for other reasons.

Who Needs to Submit a Self Assessment Tax Return?

As a general rule, anyone outside of an employer’s PAYE system must file a self-assessment tax return. This includes people who are self-employed or doing freelance work.

So, if you don’t have an employer that deducts taxes from your paycheck, you will have to submit a return.

But don’t think you’re out of the blue just yet. You may also need to submit a tax return if:

How to Send Your Tax Return

You have the option to send a paper form. However, the HMRC encourages people to do it the fast and easy way: submit your return online.

Don’t forget to create a Government Gateway account. Find your unique tax number (UTR) first.

Once you make an account, the HMRC will send you an activation code through the post. The code will likely take several days to arrive. When you receive it, you can log in to your account.

New self-employed businesses must register with the HMRC. You can do this online, post, or phone.

Make sure you don’t leave any of this until the last minute, as it can take several weeks for the entire process to finish.

The tax year starts and ends in the first week of April. You will owe a fine of £100 if your return is less than 3 months late. You can use a calculator to estimate your penalty if you are more than 3 months late.

Conclusion

There you have it: the self-assessment tax applies to workers who are outside of an employer’s PAYE system.Submitting a tax return isn’t that hard—especially if you are well organized. You can even do it from the comfort of your own home.

Just remember that if you ignore this tax, you will receive a fine. So do not delay the process. There are ways to reduce your bill, and you may be eligible for an exception. If you need any professional tax advice, or if you have any questions, feel free to contact us .

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Retail store finds one way to bring success

Sat, 25 Nov 2017 10:51:00 GMT

Sarah and Tim own an independent home entertainment retailer, selling televisions, music systems, phones, computers, games and consoles and other consumer electronics. Having completed their year-end accounts and tax work, the accountant presented the couple with a three-year business performance review, which highlighted three key issues:

Working together with their accountant, Sarah and Tim discovered some important numbers about their business that they had not previously considered. They started off by looking at average transaction value and monitored that number daily. Next, they moved onto the number of transactions per day. As they were thinking about that number, the accountant recommended they attempt to track a sales conversion rate. They decided that this would be a measure of the percentage of people buying something divided by the number of people entering the store.

They invested in an electronic people counter so that they knew exactly how many people entered their store each day. Their till told them how many transactions were rung up and they discovered that their conversion rate was 24% – in other words, just less than quarter of the people entering the store bought something.

Armed with this information, the accountant wondered if there was any difference in the conversion rates experienced by different sales assistants. So they started to measure the conversion rate by sales assistant and also the rate where no assistant intervened. As a result of this measurement, they found that one particular sales assistant had a conversion rate significantly higher than the rest – over 40%, in fact.

The obvious question then was, how did this happen? It transpired that there was no standard approach for when to approach a customer and how to start a sales conversation with them. The accountant ran a workshop with Tim and Sarah’s sales team to transfer some of the skills in the head of the star sales person and create a systematised approach to helping customers. They found that the overall conversion rate increased by five percentage points, which in and of itself completely turned around the business results.

If you suspect you have something similar happening in your business, contact us and we’ll be in touch to set up a free initial consultation to discuss how we might be able to help you.

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Brexit and your Business

Wed, 15 Nov 2017 11:41:00 GMT

It is perhaps the biggest political shakeup of the UK since World War 2, but while there are many words discussing hard Brexit, soft Brexit, politician’s performances and failings, what does it really mean for UK businesses today?

While trade barriers will affect businesses in different ways depending on the kind of markets they operate in, the consequences of Brexit are likely to be much farther reaching that import/export costs and bureaucracy. The government continue to present vague ideas of what Brexit will ultimately look like, but currently it would appear that to preserve border controls, for at least an interim period, tariffs for external trade to and from the EU will be put in place.

This will likely take the form of the World Trade Organization system of tariffs, and could last for several years while new trade deals are organized. The wider effects from this are likely increased food costs and a continuing decline in sterling. This, of course, will have an effect on the majority of businesses, reducing available spending locally as well as the effects on international trade.

Whether any of us agree or disagree with either the vote itself or the government response is largely irrelevant, the task is to deal with the situation presented to us now. Look beyond the rhetoric of both sides, and what we have is a manageable situation for most small businesses. With the falling value of sterling, imports will be more expensive, in particular fuel and energy costs could rise. It is essential for every business to make plans to accommodate this increase in overheads early. Efficiency savings or alternative energy suppliers can help overcome such cost increases if plans are in place early. Now is the time to think about external overheads and how to minimize the impact of any further currency devaluation or tariffs.

The other important aspect of Brexit that will affect more businesses is funding . One of the industries facing the largest risk of disruption is the financial services industry itself. While where head offices and trading rooms are located makes for a political hot potato due to tax revenue risk, from the perspective of a small business in the UK, what is significant is how this will affect lending policy. The danger to businesses throughout the UK should things become difficult for the financial industry is that they will become even more risk averse than they currently are, and obtaining the kind of funding that start-ups and other SME’s need to grow and survive could become more difficult to obtain.

For any small business, this is perhaps the biggest challenge that Brexit may bring, EU grants will obviously disappear, and so the need for bank funded investment could be increased at a time it becomes more difficult to obtain. In addition, one of the Bank of England’s major tools to respond to the fall in value of sterling is to raise interest rates. While there is no sign of that yet, such a move would increase the cost of funding for business and make loans more expensive. Looking to fixed rate loans, they are still out there if getting rarer, can offset that risk somewhat, but that is no solution for those that do not need funding right now.

There will be some options, some smaller lenders in the industry are entirely UK based and will remain so, unaffected by the external market, they may offer a better value funding option should the worst-case scenario appear, but in reality, simply being aware of the likelihood of increased funding costs when planning for the next five years can help you factor in such issues and avoid being caught out.

Planning for the main issues likely to effect UK based businesses does not have to be a doomsday scenario, with much still an unknown quantity, there is room to manoeuvre. The best piece of advice for all business owners at the moment is to avoid the overreactions from the political commentaries and simply make common-sense allowances for what will likely be the outcome in future planning.

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Claim a Super-Deduction of 230% From Taxable Income

Wed, 15 Nov 2017 11:39:00 GMT

The R&D Tax Credit Scheme was introduced in year 2000, the idea behind it to encourage investment in research in UK based companies and attract new, innovative businesses to the country. The scheme allows a business to reclaim significant tax relief on qualifying money spent on research and development for their business.

The exact scheme that a business can claim such tax relief through is largely dependent on the size of the business itself. The Small or Medium-sized Enterprise (SME) Scheme for instance, applies to companies that have less than 500 employees and either a balance sheet of under €86 million, or an annual turnover under €100 million. For qualifying businesses, the scheme offers valuable incentives for both tax-paying and loss-making SMEs. For businesses in profit that pay tax, they can claim a super-deduction from taxable income of 230% of the qualifying total of the funding spent. For loss-making businesses, usually start-ups, they are potentially given the option to surrender that super-deduction for tax credits, which can be worth up to 33.35% of the qualifying total money spent.

However, despite the scheme being in place for 16 years, few companies are claiming the full amount they are entitled to, and many are claiming nothing at all from the scheme. In fact, several surveys have revealed the extent of this and it makes for stark reading. A Baker Tilly survey of 750 SMEs showed that just 15% were even aware of the R&D Tax Credits scheme, while HMRC’s own figures show that less than 45% of eligible businesses claim at all.

This shows that there are an alarming number of businesses either unaware of the opportunities available to them, or failing to take full advantage of the tax advantages R&D investment can bring. However, one of the major reasons for SMEs failing to take advantage of the scheme is that it has complex rules that are difficult to get to grips with. The upshot of that is that many simply ignore the scheme altogether

Much of the confusion comes from the description of the kind of R&D funding that is actually eligible for the scheme. The HMRC guidelines for the scheme state that qualifying projects “must seek to achieve an advance in overall knowledge or capability in a field of science or technology through the resolution of scientific or technological uncertainty”.

The problem here is that many organisations simply think that this means creating a viable fusion reactor or some other example of world changing technological advancement. However, that is not really the case, the criteria are actually much broader, most new products require research and development, and a very large portion of them will actually qualify. The key phrase people get caught up on is the mention of highly innovative. The thing is, if your new product is filling a need that others simply have not met, or meeting that need in a better way, if it is increasing sales against the competition, then that is innovation. You do not have to be changing the world, advancing your product is innovation in itself.

The other thing that the various data points revealed was that of those businesses who did make a claim under the scheme, many failed to claim everything they could. This seems initially unusual, taking the trouble to make a claim, most would make sure they maximised that effort. However, the problem here is the scope of the costs of R&D. We tend to underestimate just where those costs end. For instance, software research and development will include a team of software engineers, and you may claim for the cost of those engineers’ salaries as your R&D costs. But what about their equipment, the energy costs associated with that team, management costs of organising and maintain the team and so on. R&D costs cover such a broad scope it is perhaps easy to see why many fail to claim for everything.

The R&D tax credit scheme is a great idea, encouraging investment and innovation, but it is only of use if businesses take advantage of what is on offer. Making sure you claim if you can, and take into account the entirety of the expenses incurred through R&D activity can make a real difference to your product development planning in the future

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Keeping on top of your tax liabilities

Wed, 15 Nov 2017 11:38:00 GMT

Running a small business is hard work, much harder than anyone ever gives you credit for. It requires you to master many skills and take responsibility for so many aspects of running a company, it can be easy to get swamped. With the day to day running of any business taking up so much time, keeping track of taxes can be a challenge, but there are things you can do to ensure you keep on top of everything.

Keep track of your key accounting events

One of the most crucial things you need to do when dealing with tax is to submit paperwork and payments on time. HMRC issue fines for any delays, whether it is payment of owned taxes or documentation itself. It is, unfortunately, surprisingly easy to forget to send something in when you are under pressure with work deadlines or other aspects of your business.

To avoid this, the first thing to do is create a list of the various important tax related dates for your business. You can do this manually, or through software. Google’s own calendar software is free and available online to any connected device you have and is a popular choice, while many use Microsoft’s Outlook which is part of the Office software package. Either one, or the many alternatives, not only keeps the dates visible for you, but can send you email messages as deadlines approach to ensure you never miss a submission again.

A good accountant will be able to help you with this, not only the dates, but preparing your submissions as well.

Get Organised

The key to having control of your tax situation is to be organised. Keep all tax related documentation, including invoices, expense receipts and so on well organised and easily accessible. For the ultimate security, scan each document and store them all in a cloud storage solution for offsite peace of mind. Dropbox is great for this, but they have several competitors now, and seeking out the best offer available can bring significant savings.

This is doubly important for VAT registered businesses because of the need to keep all receipts safe and searchable so you can reclaim VAT from your expenditure. Again, digitised documents can help administration, but the physical documents must always be stored safely as well.

Make the most of your allowances

If you do any work from home, you can be eligible to recover a portion of household costs as a business expense using the home-office allowance. Your accountant can help you with the details of your own specific situation.

That is not the only allowance available to you, personal allowances matter as well. Specifically, the personal marriage allowance available to both married couples and civil partners. Here, if one of you is earning less than £10,600 and the other is paying tax at the basic rate, you could receive up to £212 in a tax-free personal allowance.

For salary and other payments to yourself, it is always worthwhile to consult your accountant for best advice. With a myriad of options including salary, dividends and so on, an accountant can direct you to the most tax efficient way of receiving your money from your business.

Take Control

While any business owner knows that there never seem to be enough hours in the day for all the things that are required in a successful company, keeping on top of tax issues is really important. Not just for ensuring your business meets its legal requirements, but to save on stress and can even save money long term. Instead of letting everything build up, following these guidelines each week can help you avoid tax problems, and with the help of a good accountant can make the tax side of your business a stress free experience.

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8 ways an accountant can help small businesses

Wed, 15 Nov 2017 11:28:00 GMT

On the off chance that you are bootstrapping, or beginning an independent venture on a constrained spending plan, you have presumably invested some energy attempting to make sense of where you can cut business costs and accomplish more all alone keeping in mind the end goal to extend the assets you have accessible. Dealing with your own particular accounting framework mistakenly can hurt your business now, as well as in the long haul.

Here are ways that an accountant can help your business. Survey the rundown painstakingly, particularly in case you’re still uncertain why an accountant might be a decent asset to add to your private venture group.

Before enlisting an accountant, set aside opportunity to consider what your business needs. In case you’re a little start-up that needs a considerable measure of handholding, don’t decide on a firm that has some expertise in bookkeeping for multi-nationals. Make an analysis of the considerable number of things you’d anticipate that your accountant will help you with, and after that look for the firm/person that best suits your organization’s needs. An accomplished accountant, for instance can exhort an independent company on issues, for example, satisfactory working capital, great stock control and invoicing.

A decent accountant will survey your business’ whole money related structure for where upgrades are required. They will take a gander at active costs, overheads, and work expenses, and see where cuts or reserve funds can be made. Maybe you’ve been overpaying providers, or perhaps there are less expensive other options to a few costs you’re not mindful of. The more they can spare, the greater your overall revenues will be.

Accountants aren’t there essentially to deal with your cash. They can likewise guide you in the right bearing for extra back without putting your business at hazard, taking a gander at alternatives, for example, applying for a new line of credit, expanding an overdraft or issuing offer capital. They can likewise help you offer partakes in your business, crowdfund or discover ‘holy messenger speculation’.

Accountants can set up a strong monetary arrangement for your business that is moved down with practical information. This depends on a precisely inquired about projection of what your business is able to do, and incorporates objectives and points of reference. Having an arrangement to work which gives your business more noteworthy center and security. It means you are not scrambling to remain operating at a profit but rather can get ready for development with clarity.

Few individuals can say they’re really on top of tax collection standards and directions; however that is exactly what your accountant is there for. An accountant will review your business with the utmost attention to detail and verify that you’re making full utilization of any expense stipends and reliefs you can assert.

When you’re chipping away at the bleeding edge in the quick and enraged everyday running of a private venture, it’s simple for money related records to be sporadic and put together. A accountant will sort out every one of your books and set up a simple reporting framework. This will permit you to quickly see your accounts at any given time and get a reasonable thought of where your business is at. They can likewise set up a budgetary timetable for solicitations, expenses and obligation installments so all your imperative money streams are constantly obvious.

Debts are typically an integral part of any independent venture. An expert in accounting will survey every one and recognize which are the warning debts that are genuinely influencing your primary concern. They will then concoct an arrangement to dispose of the most noticeably awful debts, and methodologies to pay off debts quicker so your business isn’t caught in an debt paying cycle.

A definitive objective of all small business is to extend. In any case, development should be precisely overseen and arranged. In the event that you become too rapidly as far as deals and clients that can be perilous in the event that you don’t have the staff and foundation prepared. Similarly, you would prefer not to begin expanding your active spends before income is coming in, else you’ll hit a serious shortage. A decent accountant will help you carefully anticipate development and guarantee you’re prepared to meet development as far as staff, coordination and base.

In this way, hence, accountants are really imperative to the achievement and suitability of any small business or a private company. They can make your business significantly more effective, help you save money on expenses and increment benefits, and help you get to the following level.

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HMRC plans to move paying your tax online by 2020

Wed, 15 Nov 2017 11:27:00 GMT

HMRC can now confirm that under Making Tax Digital :

Source: HMRC

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Who must file a tax return?

Wed, 15 Nov 2017 11:20:00 GMT

The tax year is from 6 April to 5 April the following year.

You’ll need to send a tax return if, in the last tax year:

Certain other people may need to send a return (for example religious ministers or Lloyd’s underwriters) – you can check whether you need to . You usually won’t need to send a return if your only income is from your wages or pension.

If you are still unsure, it never hurts to get advise from professional accountants in East London .

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Questions to Ask When Looking for Accountants in London

Wed, 15 Nov 2017 11:18:00 GMT

Whether you are starting your own business or looking for a new accountant , the search can be frustrating.After all, when it comes to handling money, you need someone that you can trust. Experience and skills are also essential.But even if you know what you’re looking for, it can be tough to figure out whether potential accountants have those skills.

With more than 45,000 businesses related to finance and insurance in the UK, many of them dealing with accounting, the choices can be daunting. Before you start searching for accountants in London, check out these questions that you can use to help narrow down your search.

Have you ever worked with small businesses in my industry?

As with any business, you have needs that are unique to the industry that you work in.Maybe you work online and deal with electronic invoices. Or you have a cash flow that is very heavy during certain times of the year and much lighter during others.

Choosing an accountant with experience in your industry helps prevent a learning curve. They can help you make decisions you aren’t familiar with. They can also offer advice if you’re starting a business.

How can I communicate with you?

There are hundreds of free and paid accounting services available online. But while they have their perks, they don’t offer the same benefits as an actual accountant . One of those benefits is the ability to speak to an actual person when you need help or advice.

When you’re just starting out and have questions, you should be able to email or call your client to ask them.Later on, the accountant that you choose will become familiar with you and your business. They’ll be able to answer even more questions and concerns.

Some people have preferences in the way that they communicate. If you’re one of those people and prefer calling over email or vice versa, communicate this. If you find the accountant is reluctant to tell you how or when to contact them, you should continue your search. Open, easy communication between client and accountant is essential to smooth business operation.

What services do you offer, and how much do you charge for them?

Accounting services range from payroll services to tax filing. Different accountants in London offer different services.You’ll want to choose an accountant that offers plenty of services. But you may not need all of those services right from the start.

That’s why it’s important to find out if you can pay only for the services that you need. Whether you find that you can or not, having an accurate cost in mind will help you compare the value of those services with others.

How can you help my business, and why should I choose you over other accountants in London?

Some accountants in London will be a better fit for your small business than others. Sometimes figuring out whether they are the right choice isn’t something that you can ask with a specific question. Instead, let your potential pick tell you why they would be a good fit for your small business.

Asking how they can help your business and why you should choose them over others allows the accountant to tell you about any specialties that they may have. It also gives you a chance to see where they place emphasis and what their approach to helping you would be.

When you ready to start searching for accountants in London, be sure to give yourself plenty of time. By devoting time and effort to asking these questions and deciding whether the partnership would be a good fit, you’ll be much happier, and more successful in the long run.

It can be a long process, but in the end, finding the right accountant for your small business will always be worth it!

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How Accountants in London Can Help Your Business

Wed, 15 Nov 2017 11:16:00 GMT

There are over 340,000 accountants in London today. Have you considered hiring an accountant to help your business? If so, how do you know you’re making the right choice, and how can you find a firm you trust?

In this post, we’ll discuss three of the numerous benefits of hiring accountants in London to help with your business. Then, we’ll close by telling you where to find the best firm for your business.

1. Accountants In London Help Your Company Develop A Realistic Business Plan

Whether you’ve just started a new business, or if you’re trying a new financial tactic to get your company out of the red, hiring accountants in London will make sure your business plan is sound. A business plan will clearly outline how much money you’ll need to function, grow, and achieve your business goals over the years.

An accountant can help you accurately calculate this to avoid overspending.You’ll also have something to present to investors when you’re attempting to raise capital or to show the bank should you need to ask for a loan.

Accountants will be able to point out potential ways to save on operating costs, as well as advise you on risky investments or identify what’s draining your capital.

2. Accountants in London Will Assist You With Tax Planning

Of course, this is an enormous benefit to working with accounting firms.

An accounting firm can help to lower the total cost of your business’s current tax bill. They are up-to-date on the latest possibilities for tax breaks and can see if your business can take advantage of any of them. They can also ensure that you’re compliant with any changes to the tax law, or that you’re paying the amount you need to after recent growth and revenue increase.

Instead of spending several days trying to work out your company’s tax bill on your own, hiring a professional accounting firm will save you time and money.

3. They Know The Latest Software

Like any profession, accountants in London take advantage of the best software and analysis programs. However, accounting software can be particularly difficult to figure out on your own if you’re not familiar with it.

If you try to work them out on your own, you’ll most likely miss valuable break opportunities, and may even miscalculate your expenses.

These software programs can help streamline your business’s revenue and tax management. You’ll get your financial reports faster, receive statements more frequently, and they’ll help you to better comprehend your overall financial standing.

Popular programs include Quick Books and Microsoft Dynamics GP.

Where Can You Hire Accountants In London?

More and more companies are hiring accountants in London. In fact, the accounting industry is growing by about 1.5% every year. But where can you find reliable, affordable, and meticulous accountants that will go above and beyond for your business?

That’s where we, Fortuous Limited – chartered certified accountants, come in. As one of the top accounting firms in London, we’re ready to help you create a better financial plan for your business, and save you money in the process.

Feel free to contact us to set up an appointment , and always stay up-to-date with our blog .

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Deciding Which Accounting Services You Need

Wed, 15 Nov 2017 11:14:00 GMT

The human brain is a magnificent organ, capable of storing an estimated 2.5 petabytes . Petabytes are bigger than gigabytes.

Yet, no person can remember everything–especially when it comes to tax laws and how to accurately report and file–which is why companies and private citizens alike seek out the help of an accountant.

When many people think of accountants, they think of taxes, but the truth is that many firms offer a variety of accounting services in addition to tax preparation. Some of these services include:

These additional services can save a company a lot of money by combining offerings that would otherwise have to be covered by a payroll department, a legal department, and more.

Ready to dive in and see which of these services you might need?

Accounting Services for New Businesses

Starting a new business is exciting. Your product or service can make a positive impact on the lives of many, as long as your business succeeds.

There’s the rub–getting a new business launched so that it will perform. With business planning services, you can hit the ground running knowing that no stone’s been left unturned.

Just because you’re running the show doesn’t mean you can’t make good use of some friendly, helpful advice.

If you’re looking to start a new business, this might be an extra service you seek from your new accountant.

Who doesn’t love payday?

Whether your business is growing too large to manage payroll in-house, or your business is new, payroll services from your accountant might be able to take the burden of managing payday off your shoulders.

In the UK, there were 31.85 million employees in the first quarter of 2017.

Payroll regulations can be complex, with high penalties for not meeting them. Payroll services offered by the right accountant can save your company time and money.

Save on Legal Services

There are some combinations that make sense. Legal services and accounting services create one such combination.

Sometimes you need a contract or agreement drawn up for new employees, shareholders, and other business partners.

Solicitors’ services can be prohibitively expensive, especially for newer or smaller businesses.

An accounting firm that offers legal services through partner agreements can not only save you money but provide you the legal assistance you need from within an already trusted relationship.

Financial Services

When you’re running a business, you have to make countless decisions that could affect the financial health of your business.

Some accounting firms offer everything from financial advice to helping you secure a mortgage. If you don’t want to go it alone, look for a firm that offers financial services as a benefit to clients.

These are just a number of extra accounting services you might find available. Others might include providing you or your business with:

When searching for the right accountant, so much of your decision will be spent on finding the right services to meet your unique needs. To learn more about accounting services, contact us .

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Four common Financial mistakes Small Businesses make

Wed, 15 Nov 2017 11:06:00 GMT

Many small business owners are entrepreneurs who went into business seeking freedom, a better lifestyle, more money or simply because they wanted to run their own show. Financial acumen is rarely high amongst the skills possessed by such people. As such, it is only to be expected that business owners make financial mistakes which can jeopardize their dreams. Here are four of the most common mistakes and how business owners can avoid them.

Few small businesses have a working budget and cash flow forecast which is rolled over on (at least) a quarterly basis. As a result, they make decisions based on guesswork and have no idea whether their business’s actual performance is better or worse than what they expected. A solid budget requires the following information, ideally seasonalised and presented on a month by month basis:

Once you have developed a budgeted profit and loss account, you should then create a cash flow forecast. This differs from the profit and loss budget because it is looking at the cash inflows and outflows. As such, it needs to take account of how long your customers take to pay you, how quickly you turn over inventory, how quickly you pay your suppliers, any loan repayments due and any forecasted capital expenditure that will not appear in the budget profit and loss account.

For a thorough budget that could be presented to a bank for the purpose of raising finance, you should also complete a budgeted balance sheet.

As a general rule, and to the extent that it is possible, it is good practice to cash flow the lifetime of a purchase. By that we mean this: if you are buying stock to sell in the short term, then finance it out of your day to day working capital. But if you are buying a large piece of machinery with a ten year life, then you should look to finance it over ten years. Similarly, don’t fall into the trap of many small business owners where you have a good quarter and go out and buy yourself a flash new car – out of cash flow. Unless you are confident (and have evidence to back it up) that your strong sales will continue, you could find yourself in a cash flow bind if you empty the bank account to buy new assets every time you find you have a bit of surplus cash.

Form a strong relationship with a bank manager and keep them up to date with your plans. Often, the banks will be happy to lend when times are good for your business and you should take advantage of that to properly finance any capital expenditure required to expand your business. Similarly, the best time to secure an overdraft is when you don’t need it. The banks will be more willing and able to help you out and then if you hit a rough patch, you have a safety net.

When considering how to improve profitability, many business owners resort to hacking at costs. That’s all very well, but there is a finite limit to which expenses can be cut – zero. And then you have no business. On the other hand, the opportunities to grow revenue, assuming you manage your growth within the constraints of your cash flow, are limitless. It comes down to understanding the drivers of revenue, which in most businesses are:

Once you understand the drivers, you can put in place strategies to increase each of those critical measures.

Another thing to be aware of when reviewing costs, which, of course, is still a valid strategy, is knowing where to cut. For example, too often businesses cut back on marketing which can often be the last place you should be making cuts. Similarly, a knee jerk reaction to cut back on travel expenses could see an adverse reaction (a recent study conducted by Oxford Economics and commissioned by the US Travel Association found that 57% of businesses surveyed felt that cutting their travel costs during the recession in the US hurt their business.)

Quite possibly the most important to avoid of all of the mistakes listed. In this era of Cloud accounting solutions accurate management information integrated with daily bank feeds is readily available. Not to take advantage of such information is to run the business by the seat of your pants. Yet many small businesses persist in keeping their records on a spreadsheet or worse, in a shoe box!

Talk with your accountant today if you feel that your accounting records are inaccurate, unhelpful or obsolete. In fact, your accountant can help you avoid all four of the key financial outlined in this article, helping to set you up for more profitable days ahead.

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Get yourself ahead of the pack

Wed, 15 Nov 2017 11:04:00 GMT

Formal and Informal Systems

All businesses have systems. They make the wheels of your business turn. Some systems are formal but many are informal. Systems that are informal can keep your business wheels from turning smoothly when it comes to day-to-day operations such as closing sales and ultimately from easily selling or passing down your business to the next generation (succession planning).

By creating and maintaining formal systems you can avoid major accidents and breakdowns within your business.

A System is a Series of Processes

Many businesses are so busy with their day to day operations that systems are completely ignored.

A system is simply a series of processes. These processes are comprised of one or more activities that will involve some or all of the following:

Efficient Systems Create a Better Experience for Customers

The business that will take the lead in the race for customers, is the business that has all of its systems integrated and working efficiently. Ideally your systems create an experience for the customer that makes them want to be a repeat customer.

Think of it like this:

Owners : Set the company’s vision – an aspirational description of what your business would like to achieve or accomplish in the mid-term or long-term future.

Managers : Keep their eyes open, look for what will best serve customer needs and know how to achieve this outcome.

Team members: Energize the customer-facing systems that grease daily operations.

Customers : Drive demand for your products and services and therefore grow your business.

How to Improve Your Systems

Here are some tips to make sure your systems are up and running:

Consider how more appealing your business would be to a potential investor, lender or buyer if you were able to present a how-we-do-it-here guide.

Successful Businesses Virtually Operate on Their Own

Imagine if you were in the market to buy a business. Would you buy a business that can run on its own or would you buy one that could not run without the owner?

When a business has effective documented systems in place, it is more likely to:

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Barber responds to new competition

Wed, 15 Nov 2017 11:03:00 GMT

Scenario

A well-established barber shop in a small town was hit hard when a new barber moved into the area and set up shop. Having held a monopoly prior to the arrival of the competitor, the barber had become complacent and benefited from false loyalty. This sense of false security was disrupted by new competition.

The established barber’s accountant raised a red flag when she noticed that sales were down, margins were being squeezed and cash reserves were dwindling. The accountant worked with her client to figure out what was happening. By focusing on just two key performance indicators (the number of haircuts per day and the average sale price) they soon found out that volume had dropped off significantly. The barber’s initial response to this had been to cut prices. The results of that tactic did not work out as expected. The decrease in pricing did not result in an increase of sales but instead squeezed the profit margin even tighter than before.

In a short planning session, the accountant and barber brainstormed what they could do to differentiate his business from the competition. The accountant suggested that the barber run a loyalty program to retain his customers. This would remove the need for the barber to cut prices and would reward loyal customers. On a fun side, they decided to install a beer fridge and put a sign on the door. ‘Have a cold beer on us while you’re waiting for your haircut. Help yourself from the fridge.’

The results were spectacular. Suddenly customers started returning in droves. Not everyone had a beer. In fact only a small number of people took advantage of the offer. What it did generate was a word of mouth promotion. Lots of people talked about ‘having a free beer’ to their friends. The barber continued with this strategy by buying some vintage equipment and making a feature of the history of the profession in the shop. The accountant continued to work with the barber to monitor results, hold the barber accountable and offer more ideas to grow the business even further.

This is a great example of an accountant working with a client to grow their business. Get in touch if you would like to talk about how we might help you.

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Time for a change…and quickly!

Wed, 15 Nov 2017 11:01:00 GMT

Ever heard the expression “time is money”? Well, it’s never more true than when it comes to making changes to your business.

While change is not something that most people embrace quickly or open-heartedly, if it’s done too cautiously it can flatten revenues, eat profits and lead to business failure. This is particularly true for small businesses where the resources are limited and the margin for error is slim.

Make a Plan and Stick to It

Consider the effect of a slow change on a software company whose owner is a lead software developer. In analyzing the business, he decides it is best to focus solely on being ‘the boss’ and letting go of his developing responsibilities.

While this may be a wise business decision, if it isn’t carried out swiftly and convincingly, product releases could be delayed for more than a year, upset customers could flee to competitors and business can come to a halt.

The key is to have a plan and stick to it. If the same business committed to the decision for a change, made a timeline, and communicated the plan to the entire team, there would be little to no confusion about who was responsible for what and when it was to be delivered.

Communicate Your Change Plan

Adopting some guiding principles will help to make quick changes easy and effective. Always carry the attitude that even massive change should happen quickly and across all aspects of the business. Specify and require clearly defined results, but leave execution details to those doing the executing. Adopt performance-related bonuses and pay structures.

Having a clearly laid out transition will give you clear performance expectations.

Most importantly, communicate the changes and the expected timeframe. A communications plan is critical and should be a high priority of any change plan. Use newsletters, management speeches, intranets, regular meetings, bulletin boards, signs and key team members to convey to the entire team and your customers what is going on and when.

Break it Down into Smaller Pieces

While no one speed of change can fit every organization, it is important to assess how nimble your organization is and how readily it can change.

When taking on a massive restructuring of an organization or shift in direction, remember to break down the goals and objectives into smaller pieces. Not only will it give your team a smooth transition and realistic performance objectives, but a few small successes and results help build more enthusiasm for the rest of the planned changes.

Remember, the longer disruption goes on, the more costly it is to your business. By clearly defining the outcomes and the strategy for achieving them, you save yourself and your team a lot of headache and ultimately, save your business money.

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Are the Vital Signs of your business Healthy?

Wed, 15 Nov 2017 10:58:00 GMT

A healthy body demands routine checks and examinations. So does a healthy, thriving business. No matter what stage your business is in, to keep it going you must check its systems, pay attention to any ailments and prevent early death.

For the newborn business, the goals and system checks are relatively simple. Merely staying alive and maintaining your sanity is a measure of success at this point in development. Systems are very limited in the start-up stage because there are usually a handful of people (if that) trying to get capital, find more customers and deliver a quality product. Three common causes of mortality at this stage are:

As a business progresses, basic survival is the measure of success. Teetering on the edge of just making enough to survive is hazardous to anyone’s health. At this stage, there are still limited systems and employees; there may be a marginal profit; expenses are covered and cash flow can and must be projected. Failure to thrive can be attributed to owner burnout, lack of vision, insufficient funds and marketplace factors.

Too many businesses get stuck in this stage. These are the businesses that are sold at a loss or just close down when the owner has had enough. Every business should strive for optimum health and try to perform like the Olympic athletes we witnessed in Rio last month.

Now is the time to train your business body and make critical decisions. Are you going to go for the gold or are you willing to settle for being a recreational player? If you are reaching for the gold, then you’re going to have to train your business, assess the weaknesses and attack them rigorously, optimize your strengths, consider growing and expanding your business and reinvest in its success.

This will require constant monitoring.

Not every athlete captures the gold, however, constant monitoring and exercising increases your business’ success and potential for optimum health. We find that when business owners work with us to understand their numbers (and specifically, the key drivers of revenue, profit and cash in their business) and then set stretch targets and monitor both the financial and non-financial key performance indicators every single month, better results are achieved.

You might have noticed similar results with your own body. If you weigh yourself every week, you’ll notice if things are getting a little out of control and you can take action to remedy the situation right then and there. On the other hand, if you worry about what your weight might be and as a result, you ignore the bathroom scales, next time you weigh yourself – perhaps in six months time – you might find yourself with a bigger problem than you imagined and it’s much harder to sort out.

If you would like to discuss your business’ health or would like help with implementing any of the ideas in this article, please contact us. We’d be delighted to work with you to check the pulse on your business.

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What’s your purpose? Why are you in business?

Wed, 15 Nov 2017 10:57:00 GMT

If you don’t know, your customers surely don’t. More importantly, if you don’t know, you won’t be able to tell your customers why they should choose you over your competitors. Answering this simple question is critical to forming a purpose statement and creating your marketing strategy.

What was your purpose in starting your business?

Undoubtedly when you decided to start your business you had an inspiration. Was it to provide a service or product better, faster or cheaper than what was currently available? Was it to fill a gap in the marketplace? Perhaps you were inspired to run a business that people enjoyed working for or that maintained environmentally and socially responsible ethical standards or that surpassed existing companies in providing superior customer service. Whatever your mission, find it and then write it down.

The Power of Why

Experience shows that companies with a clear and ever-present purpose statement surpass their competition and last in the marketplace. Purpose (or Why) statements define and preserve and strengthen a company’s unique competitive advantages. Additionally, companies who are clear about who they are and what they do are less likely to make irrational decisions in response to competition and fluctuations in the marketplace. However, that does not mean your purpose statement should be inflexible. A good purpose statement can lead a company for 10 to 20 years if time and effort were spent in creating it. However, re-evaluating your why from time to time to see if it is still relevant, significant and appropriate is advised.

Be Specific

You want to create a statement that you and your team can look to every day and ask “Am I fulfilling the company’s mission?” For example, one statement could be “to be the leading game software developer for teens”. A more actionable purpose statement would be “Surpass XYZ games developer in sales, customer experience and speed to market”. The second purpose statement has clear goals and direction, while the more abstract version would be more appropriate for a vision statement than a purpose statement. The second statement clearly supports the vision statement.

Include a Call to Action

You can distinguish your purpose statement by including a call to action. This is missing in most company purpose statements and has several defining and distinguishing characteristics:

Think back to this statement: “Surpass XYZ games developer in sales, customer experience and speed to market”, if you run this statement through the above four qualifications, you will get a yes every time.

Creating a Purpose Statement that Fits Your Business

When creating your purpose statement, consider these aspects of your business:

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Suburban law firm cleans up its act to improve profitability

Wed, 15 Nov 2017 10:54:00 GMT

David, the sole practitioner of a legal firm, found that his revenue had stagnated and he was consistently facing cash flow problems. David was jolted into action by a frank conversation with his accountant. The accountant asked him how many hours he worked in his firm each year. The lawyer estimated approximately 2,000. The accountant then asked the lawyer to divide his profit by the hours worked and demonstrated that he could likely earn more per hour by working for someone else. This, together with all of the hassle of running his own firm and dealing with employees inspired David to make some changes.

“You’d be better off shutting the doors and finding a job with someone else,” the accountant said, with a view to provoking his client to take some action to change the performance of his business.

It worked. With a deep breath, David asked his accountant if he had any ideas to help him improve his business. Together, they set about implementing the following project plan:

David’s cash flow problems are now a thing of the past and with the extra time freed up, he and his team have been able to bring on new clients and sell additional projects to existing clients. The result – a 30% increase in revenue, much of which dropped to the bottom line, with profitability tripling in the business.

Many businesses face the same issue, irrespective of the industry in which they operate. If you think you have potential to increase your sales, profit or cash, please contact us on the link below and we’ll be in touch to set up a free initial consultation to discuss how we might be able to help you.

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What’s the difference between water and steam?

Wed, 15 Nov 2017 10:27:00 GMT

“What’s the difference between water and steam? At 99 degrees water is merely hot, at 100 degrees it turns to steam and can move locomotives. Just one degree—a one per cent change—makes the difference.”

This is a great metaphor for business.

It is always the little things, the small improvements that get the big results. In this short article we look at the impact that small improvements in the key drivers of profitability have on the bottom line.

The key drivers of profitability are price, variable costs (that is, those costs that vary in direct proportion to sales revenue and which typically are represented by the cost of sales), the physical volume of sales (that is, the number of transactions) and finally, fixed costs or enterprise overheads.

To illustrate this consider a business that has the following financial performance characteristics:

A 1% improvement in each of the four profit drivers for this hypothetical business will yield a 40% improvement in net profit! An increase in profit of £40,000.

What’s really important to notice is the fact that for this business, the 1% improvement in price has more than 3 times the impact of a 1% increase in sales volume and nearly 4 times the impact of a 1% reduction in fixed costs. We can help you run these numbers for your business, by the way.

While the relative impact of price compared to variable costs, volume and fixed costs will depend on the financial characteristics of the business, it will always have a greater impact that any of the other drivers and usually that impact will be in the order of more that two to three times the effect.

The reason for this is quite straightforward. An increase in price for a given volume of transactions means that not only will total revenue increase but so too will the margin (price minus variable cost) on each transaction. A reduction in variable cost will change the margin but not the level of revenue. An increase in volume will increase revenue but will not change the gross profit margin and a reduction in fixed costs will have no impact on gross profit at all. Interestingly, reducing fixed costs will always have the smallest impact.

For example, in this hypothetical business, fixed costs would have to reduce to £625,000 to achieve the same result as a 1% increase in price.

If you look at a larger change such as a 10% improvement that will take your GP% to 38.18%, the differences are even more dramatic. With this scenario, a 10% price increase will increase net profit to £350,000 whereas a reduction in fixed costs of £350,000 (43% reduction) would be needed to yield the same profit.

If I put my prices up by 10% how much business would I lose?

You might be thinking, “that’s all well and good in theory, but if I put my prices up by 10%, how much business would I lose?” That’s a good question but a far better one is, “how many customers could I afford to lose without being any worse off?” For this business, the answer is 24%. This would result is a reduction in total revenue of about 16% given a current GP% of 32%.

In other words, you could lose 24 out of every 100 of your “average” customers and be no worse off. And if that were to happen, which 24 customers do you think you might lose—we suspect it will be the 24 people who are price sensitive and who keep reminding you and your team of that. You might also want to remember that a 24% reduction in the number of people you service will take the pressure off you and your team members and will, in all likelihood, enable you to cut back on some of your fixed costs.

The strategic implications of this type of analysis are very important. Most business people are preoccupied with getting more revenue—often from new customers. They pay very little regard to the customers they already have and usually adopt the view that price is something over which they have very little control because of competitive pressure. They also believe that seeking ways to reduce costs is the most effective way to build a profitable business.

This is absolutely the wrong way to run a business even though it may seem to make intuitive sense that the more revenue you generate the bigger, and therefore the better, your business will be. It also makes intuitive sense that cost reduction leads to improved profitability.

Let’s first address the cost reduction strategy. We have no argument with the proposition that reducing costs (whether they are fixed or variable) will improve profit. But there is a big qualifier to this. If a cost is necessary for you to do business, then reducing it may also reduce your capacity to do business. Furthermore, the costs that can be reduced are generally those of a “discretionary” nature and these tend to be the ones incurred today to build the future of your business (for example, marketing, team training, research and development.) A more useful strategy to pursue is to constantly review your costs and ask yourself the question “what are we getting for what we’re investing here?” and related to that, “Is there a way for us to get greater productivity from the resources that are driving these costs?”

Chasing new revenue is a major cost driver in itself

Chasing new revenue and the activity that involves is a major cost driver in itself. While we tend to describe enterprise overheads as being fixed costs, they in fact aren’t in the long run. They tend to be driven by the volume of transactions. If that was not the case every business would find that its net profit margin (that is, net profit divided by revenue) would increase over time. That is rarely the case in practice.

By far and away the most profitable strategy is to aggressively price your products or services, elect to deal only with those customers who see and accept the value you deliver to them, do not allow customers (or competitors) who are price sensitive to dictate the pricing strategy that you adopt across the board and do not see “big” as being the definition of success and monitor the productivity of the resources that are provided by your fixed costs. At the end of the day, profit is the only measure of success. Revenue does not pay the bills or give you the resources you need to grow—that comes from profit.

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What a business plan can do for you and how to use it

Wed, 15 Nov 2017 10:24:00 GMT

Running a business without a business plan is like rock climbing blindfolded. Your chances of making it successfully to the top are slim. And the process will surely be a death-defying one.

Contrary to popular practice, a business plan is not a means to securing financing. Instead it is a step-by-step guide to running your business and creating the product or service that will make it in the marketplace. And like any other map, your plan will have to be adjusted according to your vision for the company, conditions and opportunities in the marketplace and your business’ current condition.

Whether it’s formal or informal, every business has a plan. The local hair salon may not have formally written down the plan, but before setting up shop, a smart owner would have assessed the need for a shop in that area of town, the ability to attract clients there, the appropriate amount of chairs, whether to hire someone to do the shampooing and sweeping, the cost of utilities, the parking availability for clients. The owner who waits to figure these things out using trial and mostly error will be lucky to be left with his/her wits, much less any customers. A business plan helps to minimizes those pitfalls.

To many people, the concept of writing a business plan for their own business is a daunting one. Perhaps it would appear less daunting to view the process as simply writing the answer to three questions, namely:

THE FIRST QUESTION – ‘Where are you now?’ – must be your starting point. This question seeks to provide a planning base. It looks at your business to establish such things as:

Answering the question, “Where are you now?” is often a major stumbling block because most people don’t know where to start. However, the answer is surprisingly simple if you divide your business planning into four key areas: Operational, Marketing, Employees and Finance. Such a division allows you to analyze your business (or assumed business) to create a solid planning base.

THE SECOND QUESTION – “Where do you want to be at a future date?” is simply asking you to visualize your business operation at a set date in the future. This visualization process is almost identical to the exercise of setting personal objectives. The difference, however, is that the focus here is on business objectives.

THE THIRD QUESTION – “How will you get there?” asks about the steps you need to take in order to achieve the business objectives you have set. These steps, or strategies, can be identified, written down and programmed. Additional things a business plan should consider:

While much of this may have occurred to you informally, it is very import to write it down. If you ever need to approach a bank or investors, you will need it. Writing it down will reinforce your vision, give you a reference point for checking your business’ progress and will most likely bring up factors you did not consider when creating the plan in your head.

Writing your business plan down:

Business plans are not only for those just setting out their journey in the marketplace. They are useful when acquiring a new business, forecasting growth, introducing a new product or service, entering a new market, responding to changes in the market or changing a significant aspect of your business.

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Say “I do” to customers and team members

Wed, 15 Nov 2017 10:18:00 GMT

Consider it polygamy of sorts. But if you want to stay in business long and prosper, you have to commit to your customers. It’s no longer enough just to satisfy them. The quality of a business’ revenue is as important as its quantity. Loyal customers represent quality revenue.

It’s great if every customer walks away from your business with a smile. But it’s not enough. They have to be compelled to come back for more. And, merely satisfying your customer does not guarantee they’ll be repeat customers.

Let’s take for example a small restaurant located in San Francisco’s Mission district. Casa Sanchez has been making tortillas for years in San Francisco’s Mission district. Routinely customers leave with a full stomach and contented smiles, which is nothing less than you’d expect of a successful restaurant. But the truly unique thing about Casa Sanchez is its ability to create and foster loyal customers. Casa Sanchez customers go beyond being just loyal; they are true advocates in every sense of the word. Loyal to the point where more than 40 Casa Sanchez customers have paid between $80-$120 to have the company logo (Jimmy the Cornman) forever tattooed on their body – and there’s a waiting list of advocates willing to do the same. That’s taking loyalty to the extreme!

Fred Reichheld has spent many years investigating companies that get loyalty right. He has identified six common principles that these loyalty leaders share:

This article explores the first three of those keys and provides tips on creating and nurturing loyal advocates for your business.

Key 1: Preach what you practise

It’s an age-old saying – Practise what you preach. Fast-forward to today and you could change that to practise it and do it at Internet speed. But it would be dangerous to let action be the only focus. It might seem goofy, touchy-feely or even frivolous, but every company has to have core values. The founders of the great industrial companies understood perfectly well that in order to prosper, a business had to deliver value to its customers and employees as well as to its investors. To quote Henry Ford, “business must be run at a profit … else it will die. But when anyone tries to run a business solely for profit … then also the business must die, for it no longer has a reason for existence.”

At Casa Sanchez, a core value is family. The Sanchez family wants customers to feel like they are sitting down to a meal Mexican-family style. A place where there is music, conversation, laughter. A place where everyone knows your name, like it or not. This core value of creating a family dinner experience is what drives the employees to get to know their customers by name, to know a little about their lives and to smile at every patron. The idea of family is also behind the window that displays all the Polaroids of the customers who have tattooed the logo on their various body parts. They are a family in their own right.

If the owners had never had such a clear vision and never communicated to their employees the enthusiasm for such a place, Casa Sanchez would be no different than Taco Bell. It would be just another place to eat. The Sanchez family doesn’t just tell employees that it is their JOB to get to know their customers. They lead by example—sitting down with patrons, calling out their names as they come in and keeping the enthusiasm and energy high. Even the recipes come from the grandmother in Zacatecas Mexico, which is proudly announced to patrons and visitors of the company website. In every interview, upon every visit and on every page of the Casa Sanchez web site, there is mention of family. Casa Sanchez practises and preaches its values and then it preaches about it some more. Your business can too.

Key number 2: Play to Win-Win

Trying to garner customer loyalty without paying attention to team loyalty will get you the same results as bungee jumping without the bungee.

Today’s experts identify an unyielding link between customer loyalty and employee loyalty. It’s no coincidence that principled leadership inspires employee and customer loyalty. Leaders with a sense of responsibility and commitment to treating people well are far more likely to attract and retain the best and brightest employees. They will also command the respect of their employees who will see it as their own responsibility and exciting challenge to fulfill the company’s mission and to deliver the best customer service possible.

Delivering superior customer service has immediate and long-term benefits to employees. When the service is good, there is almost always an immediate appreciation from the customer. In the long term, it gives employees a sense of pride, ownership and purpose.

Making a commitment to your team and your customers is a win-win-win situation. Customers are happy. Team members feel a sense of ownership and purpose. And your business will gain the trust of its biggest assets (customers and employees).

Key number 3: Be picky

Attracting the right customers. Yes that’s right. Contrary to popular belief, not every customer is right all of the time. The right customer is always right. Casa Sanchez is not the appropriate home for the people in search of a quiet and spice-less meal in anonymity. The Sanchez family would be sure to fail if they thought they could fit the bill for this crowd. But they succeed because they know whom they want to serve, what their purpose is and what keeps the customers they want to serve and can serve coming back.

This does not mean feel free to let loose on those customers who annoy you. Nor does it mean that “no” is the appropriate response whenever someone feels like it. It means that your company absolutely, positively must be clear about which customers it can satisfy and it must commit to surpassing their wildest expectations of customer service. This is what distinguishes the satisfied customer from the loyal customer.

Believe it or not, the Sanchez family has a waiting list and an application process for getting permission to have the Jimmy the Cornman logo tattooed on your body. Membership in this family is exclusive. It also brings you a lifetime of free burritos anytime you want, as long as you flash the tat and prove membership in this family. Only one tattoo house is permitted to tattoo the logo and only those who have submitted an application and have been approved are granted access to the free burritos, a photo in the window and status as true Casa Sanchez family.

Being picky applies to your other great asset as well, your employees. You have an obligation to be picky about whom you hire—an obligation to your company, your customers and your other team members. Membership should be seen as a privilege. Not only does it inspire hard work but it fosters greater retention. People value what they have to work hard for to earn.

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Avoid changing horses in midstream

Fri, 10 Nov 2017 11:08:00 GMT

It’s rare that Accountants are spoken of as examples of great marketing. So please indulge us as we share with you a wonderful campaign run by the Institute of Chartered Accountants in England and Wales back in 1995.

So proud were the Institute of their campaign that they bought serious billboard space in London. On the billboard was written in huge writing:

“It’s easier to sleep with a Chartered Accountant.”

Talk about impact. The number of letters this campaign generated to the national press in England was amazing. It probably even turned up in comedians’ lines, news bulletins and so on.

And then, six months later they changed it.

What to? Well, we can’t tell you. Because we haven’t noticed any of their campaigns since — nor have there been reports of any letters appearing in the Times!

So, the question to ask is obvious. Why change it? Or more particularly, why change something that was working brilliantly?

They changed (like most other people) because they figured it was “time to change.”

In doing that, they fell into the trap into which many businesses fall — change for change’s sake. It’s wrong!

Many companies indiscriminately change campaigns in midstream. In the process of that change, they:

The truth is that you get tired of your own campaign long before it’s done its work out there in the marketplace.

Don’t arbitrarily abandon it. Only replace an approach when you’ve verified and validated a more successful and profitable successor. Again, that requires measurement, management and testing. And, as you’d understand, as Accountants we’re well-placed to help you with implementing those measurement systems. Please reach out if you’d like to discuss how we might do that.

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