Celebrating Global Bookkeeping Week is a timely reminder to reflect on the significant impact “number crunchers” have on small businesses worldwide.
Bookkeeping is one of the world’s oldest professions, dating back to the days when the financials were kept in order with barter and manual systems. I’m talking about as far back as the 13th century here, when Lucia Pacioli published his book ‘The Summa’, which essentially formalised double-entry accounting. Little changed until the mid 1980s, when computers and technology changed the world. Fast forward to present day bookkeeping and accounting, and software is predominantly cloud based and accessible from anywhere. Software has ultimately given the bookkeeper and their clients the tools they need understand the numbers behind their business.
How can a professional bookkeeper help a small business?
Bookkeepers are integral to small business. They reconcile the bank accounts, ensure creditor bills are correct, chase debtors, and prepare cashflow forecasts, as well as undertake compliance such as payroll. It is not unusual for the bookkeeper to be the centre-point of a small business.
Bookkeepers are often the first to see the cashflow trend of the small business and are well positioned to advise on using software to streamline the business. Additionally, they’re the first line of defence against small business failure: a bit like the canary in the coalmine.
A rule of thumb has been that 25 percent of small businesses fail in their first five years. Often this failure is due to inexperience and/or mismanagement. Both of these reasons can be brought back to not knowing your numbers and planning
Succession and contingency planning, for many small business owners the ultimate dream is to work hard, build up the business to sell and retire on the proceeds. Sadly for many small business this is not the case. Bookkeepers are agile and often at the forefront of technology to research and implement relevant software and systems in place to be able to ‘box up’ the business for sale.
Behind those numbers, and every business, is someone in a bookkeeping role or function. The significance of their services should never be underestimated. Without bookkeepers helping businesses with good record keeping and compliance, our Government would not be able to administer our taxes and keep building better schools and hospitals and support our growing and ageing population
Global Bookkeeping Week is your opportunity to reflect and celebrate helping small businesses to succeed, as well as consider any further professional development you might need to set yourself up for an exciting new digital future.
Join us in our ambitious plan to reshape accounting in 2020. We now offer all our clients free access to a standard Xero subscriptions* because we believe that it is a "beautiful software that can transform your business".
5 reasons for using Xero
1. Work where and when you want to
Whether you want to use your smartphone or tablet, or your PC or Mac, Xero lets you keep on top of your business finances wherever you are. Xero also works hard to ensure you – and anyone else who needs to access your finances – are working off the same data, wherever you are, whenever you want.
2. Improve cash flow and get paid faster
Every business needs to get paid, and Xero equips small businesses with tools you can use to get paid faster.
Go beyond “traditional” printed invoices and start using online invoices. Rather than send your customers a PDF file – or, worse, a printed document – you can send them an online invoice. The advantages? Not only is it faster, you can also see whether they’ve opened it, and they have the ability to pay you online through your invoice. The faster the process, the faster you get paid.
3. Let Xero do the heavy lifting while you sleep
Smart software should be easy to use and also work behind the scenes to help you save time. Let Xero perform those tedious, repetitive tasks that take you away from doing the things that can add more value to your business.
If you use invoicing, then Xero’s automated invoice reminders can do the chasing for you. If your customers take a while to pay you, or you are spending hours chasing overdue invoices, then Invoice Reminders is a must-have. It will automatically send an email to your customers if an invoice is overdue (or about to become due).
And if you’re an advisor, then find and recode could save you hours. It’s easier than ever to find your way through a client’s records and then update those records en masse. Hundreds of records to update? Find & Recode will save you hundreds of minutes.
4. Collaborate with your advisors
We call it the single ledger, but think of it as the single set of data that both you and your advisor can work from. This means you’re both seeing the same set of data at the same time.
This saves you from having to export data and send it to your advisor – as soon as you sent it, it’s likely out of date. And as an advisor it saves you the trouble of importing the data into another solution, which not only means you may not be working off the latest information but, because it’s often unwieldy to do, then any problems in a client’s business may not be discovered for months.
What’s more, you’re free to invite your advisors into your file at no additional cost – we make it easier than ever to collaborate with those who matter.
5. Xero grows with you
Whether you’re just setting up your business, or you already use multiple systems, Xero’s ecosystem can help you. Xero works with more than 500 products so you can craft a solution that meets your needs.
* subscription offer applies to clients with a minimum term of 10 hours per month, offer excludes payroll and project add-ons.
We all know how difficult it can be to leave work behind when you head home for the day. But what happens when you work from home? How do you switch off from a day’s work when your environment doesn’t change? The good news is where there’s a will, there’s a way. Here are five strategies to help you switch off after a day at the (home) office.
1. Create a working space at home
The first thing you need to do is create a place at home where you do your work – preferably not your couch or your bed. Even if you don’t have space for a home office, you need to create an area that is purely for work purposes. Even a small desk in the corner of the lounge room will do. Your mind will begin to associate that area with work, so when you move to the couch you will be able to switch off more easily. Even when working from home, it helps to keep the lines of work and home separate.
2. Set official work hours
While working from home may mean a sleep-in here or there, it will help your productivity if you actually set rigid work hours. Not only will it increase your motivation, it will also help you switch off at the end of the day. If there is an actual time when your work day finishes, it can help you mentally move into the next phase of your day. If you’re constantly checking your emails at all hours, you never quite get to rest even when you’re not on the clock.
3. Create your own boundaries
Even those who work from home need to take breaks. To help switch off from work and relax, you may need to set your own boundaries. Take practical steps, such as logging out of your email at a certain time of the day or turning off push notifications. Give yourself time in the morning to prepare breakfast, do a workout or run a few errands before your official workday begins. You can let your clients know that after a certain time in the day you are unreachable.
4. Take a break
Often the perception of working from home comes with visions of sleep-ins, daytime television and afternoon naps, but it’s often far from the truth. Many entrepreneurs and small business owners end up working longer hours with the inability to switch off. Be firm about creating structure around your work day. Take regular breaks at the same time everyday and finish your work day at the same time, wherever possible. This form of routine will help your mind move quickly from work to play.
5. Learn how to relax
Sometimes the best way to switch off from the stress of work is to relax your mind and body. This will look different for everyone. Perhaps a long walk after a day at home will let you clear your head and leave the work day behind. Or maybe you’d prefer to get wrapped up in your favourite novel or television series. It may be important for you to get out of the house to relax, so enjoying dinner out with friends or family is a priority. However you relax, find out what those activities are and plan more of them into your day-to-day schedule.
by Jessica Holmes
Most of the information you will require to set them up as a new employee on your system will come from their P45.
If your new employee does not have a P45 then they will need to complete a starter checklist (this replaced the P46 form)
The details provided should include:
Keep in mind that you will also have to set up a Pension scheme for your Employees. I will explain this in another post.
Click on the link for a starter checklist template new-employee-starter-form_online.pdf
There has been a huge influx of businesses moving their bookkeeping to online accounting systems due to HMRC's ambition of Making Tax Digital. Xero has become one of the top choices for Accountants all over Britain due to its robust features and user friendly interfaces.
Entering data forms an essential part of your financial record keeping but can all so often become the most time consuming task. Xero outsourcing works with businesses that struggle to keep up with monotone data entry tasks.
How does it work?
1. We will help you to find the most efficient way to forward us your invoices and receipts, no two businesses are alike so we don't expect one glove to fit all. All we require for you to have is a Xero subscription. (speak to us if you are not yet a Xero user)
2. All your invoices are securely stored and processed by our trained staff. Everything is uploaded to Xero but also saved using cloud storage to make sure you never loose your data.
3. You will receive a friendly notification from us once everything has been added, freeing up time for you to run your business.
We take upmost care when entering your data, all income and expense codes are based on either prior entries or your approval.
Xero's security statement: Secure data centres
Xero’s servers are located within enterprise-grade hosting facilities that employ robust physical security controls to prevent physical access to the servers they house. These controls include 24/7/365 monitoring and surveillance, on-site security staff and regular ongoing security audits. Xero maintains multiple geographically separated data replicas and hosting environments to minimise the risk of data loss or outages.
Why bother with cloud accounting? Just the word accounting is enough to put you off.
Cloud Accounting is not just a fancy spreadsheet it's sooo much more. See if my 5 reason can change your mind about all this cloud staff.
1. ACCESS FROM ANYWHERE
What makes the cloud so attractive is it's capability of being accessed from any device at any time. All that's required is an internet connection enabling you to login to your chosen software package.
2. INVOICING ON THE GO
Invoicing has got to be one of the biggest advantages of cloud accounting.
Admin is one of the biggest burdens of business and anything that helps ease the pain has got to be a winner.
Being able to produce an invoice as soon as you finished the job and still with your client makes life so much easier. First of all you know it's been received and secondly you can spend your evenings relaxing and not doing admin.
3. KEEP AN EYE ON YOUR PROFIT
Profits, the reason why you're in business in the first place.
Seeing how much you've made and how much you've spend at any one time could change the way you run your business. Knowing what actually makes you money and what brings you barely anything shown on simple charts will help you make better business decisions.
4. CALCULATING YOUR TAXES
Dreaded taxes, the necessary evil for any business. Cloud accounting software will provide you with a running total of your liabilities, eliminating the end of year tax bill shock.
Returns such as SELF ASSESSMENT, VAT or CIS can be produced in seconds. You enter the data and the software will calculate the rest.
5. REDUCING YOUR ACCOUNTANTS FEES
The future for Accountants is being shaped by Cloud Accounting or should I say reshaped. Software dramatically reduces the time it takes to produce your year end accounts and the charges that go with it.
Accountants will focus more on tax advise and keeping your business in the loop with new legislations rather than sorting through shoeboxes full of receipts.
If you have any specific questions just get in touch with me. I never get bored of talking about the cloud.
Have a good day in business !
The recent hacking scandal has once more reminded us that the online world is not as secure as we hope it to be. We are being told that outdated software, expired internet security and unpatched computers are inviting unwanted guests into our home. We have left the door unlocked or maybe we have taken the front door out altogether and our home is now free to be roamed by outlaws.If we can learn to look after our computers like we look after our homes then the likelihood of anyone getting in without an invitation can be reduced dramatically.
Let's look at cloud accounting.
You enter all your business income and expenses into the software which is then kept by the software provider on a server in a secure location (not a blue cloud by the way).
Can you prevent a hacker from getting to your data stored at this location? The answer is no, you have to trust the provider to invest enough into keeping your data secure. I don't doubt that they do their upmost to prevent anything happening to your data, they quite often run multiple backups at the same time to reduce the risk of unexpected data loss. After reading through endless amounts of cloud accounting security pages from various providers and speaking to a number of IT professionals I have compiled a list of …
Loosing those details could be detrimental to your business.
I hope this was helpful to anyone using or tinkering with the idea of cloud accounting!
Accounting has been based on the double entry system for centuries. It's said to have it's birth place in Genova - Italy where it was first recorded in the 13th century.
When IBM launched the PC in the mid 80's it introduced Lotus 123, the electronic spreadsheet. It revolutionised data entry and changed the way we keep track of our figures forever.
The next revolution in accounting could not have happened without the Internet. Phrases such as good Wi-Fi, download speed, signal strength don't need explaining.
You can track your data on any device, in any place, any time.
If your company is not ready to get rid of its desktop software package, then you may find yourself in the same boat as those firms in the 80s that didn't believe they needed computers.
More businesses have moved their accounting onto the cloud in the first few month of 2017 than in any other year before and software providers are fighting for your attention. This year is crucial for them as it could mean the difference between make or break.
I am here to offer advise on cloud accounting, help with software choices, data migration and to answer all those questions you might have along the way.
Feel free to get in touch anytime!
Tax Return information checklist
Please note that there may be other information relevant to completing your Tax Return, this should be supplied at time of completion
There are some mistakes that can easily be avoided when filing your tax return but could incure you a penalty of £100 if HMRC feel that you did not take care when completing your return.
1. make sure you NI and UTR number are correct
2. do not write comments such as "to follow" or "see accounts", you need to supply them with all the figures requested
3. forgetting to declare ALL income
3.1 income from employment from your P60
3.2 income from benefits such as maternity, paternity, sick pay or jobseekers allowance
however income from child benefit, child tax credit and disability allowance is non taxable and therefore does not need declaring
3.3 interest, dividends from banks and building societies and savings accounts but do not include interest received from limited company bank accounts as these will be included in your company accounts (HMRC will easiliy pick up on any undeclared interest, therefore make sure you do this accurately)
3.4 property income
3.5 capital gains
3.6 income received from employee share schemes and other benefits you may have received through employment during the period, you employer should have issued you with a P11D
4. keep your expenses at a realistic level or simply use HMRC's simplified expenses calculator, see link https://www.gov.uk/simpler-income-tax-simplified-expenses/working-from-home
dissallowable expenses are:entertainment
fees you paid for someone to complete you personal tax return
travel to and from a permanent place of work
5. take care to tick the correct boxes, it is best to ask for help if unsure
6. remember that if your income tax bill exceeds £1000 you will have to start making payments on account on 31 July 17 unless you are sure that your income in the following period has dropped
These are just a few hints and tips that you might find helpful, feel free to contact me anytime for help and advice.
Are you married or in a civil partnership and on low earnings? Then this will help you safe up to £220 in tax.
1. How it works
Marriage Allowance lets you transfer £1,100 of your Personal Allowance to your husband, wife or civil partner - if they earn more than you.
This reduces their tax by up to £220 in the tax year (6 April to 5 April the next year).
To benefit as a couple, you (as the lower earner) must have an income of £11,000 or less.
If you were eligible for Marriage Allowance in the 2015 to 2016 tax year, you can backdate your claim to 6 April 2015 and reduce the tax paid by up to £432.
2. Who can apply
You can get Marriage Allowance if all the following apply:
3. How to apply
You can apply for Marriage Allowance online.
If your application is successful, changes to your Personal Allowances will be backdated to the start of the tax year (6 April).
HM Revenue and Customs (HMRC) will give your partner their extra allowance either:
4. When Marriage Allowance stops
Your Personal Allowance will transfer automatically to your partner every year until one of you cancels Marriage Allowance or your circumstances change, eg because of divorce or death.
The following link will provide you with the relevant form from HMRC
FINDING THE RIGHT BOOKKEEPER FOR YOUR BUSINESS
Finding the right Bookkeeper can make all the difference for your business. The knowledge that your financial tasks are taken care of and someone else is there to keep track of filing deadlines will result in you feeling more positive about getting on with the running and growing of your business.
Here are a few tips on how to go about making your selection:
Finding out about your prospects experience in bookkeeping is essential. Some will have worked in only one industry and if that should match yours then they should make a good candidate. Others will have gained experience by maintaining books for a number of small businesses which would have widened their ability to adapt to different industries.
Establish if they have done bookkeeping for someone in your industry before, as this will help with issues that they are likely to come across. A bookkeeper who has never dealt with stock control may not be the most suitable candidate for shop owners.
Ask: “How long have you been a bookkeeper for and what types of clients have you had?”
The significance of good communication is often underestimated by business owners. It is much easier to be clear about how you wish to communicate and what your expectations are on response times right from the start then to let this turn into an issue later. A bookkeeper you struggle to get hold of is counter productive to your business.
A professional bookkeeper will be taking your business seriously and will be keen to answer any queries you may have in a timely manner.
Ask: “What would be your average response time to deal with queries?”
Let them know what accounting software you are using and find out if they have experience in that software. However do remember that the number of available cloud accounting software has risen sharply over the last few years and you may struggle to find a bookkeeper who is using your exact match. A professional bookkeeper should be confident enough to handle most software’s and if you are one for using other helpful apps such as receipt scanners etc. then make sure to ask this:
“Are you keeping up to date with accounting technology and how confident are you about your IT skills?”
If your bookkeeper prefers to use desktop software and you are expecting to be able to share data readily then you will not work well together.
At this point you are probably close to making up your mind as to whether you would hire them or not.
Ask yourself if you are comfortable talking to them? Do they use accounting jargons that make no sense to you at all or do they explain themselves well?
Does your gut feeling tell you that you can trust them with your books?
You will have to work closely with your bookkeeper so getting the right person is paramount to your business.
Also find out if they have checklist in place to deal with monthly recurring items. This will give you an idea as to how established they are.
Have a list ready of all the services you require, i.e. payroll, Vat, CIS… and make sure that they are experienced in dealing with them.
Make sure to discuss fees right from the outset. Are they charging an hourly rate or are they charging a fixed rate? Some bookkeepers have started offering bundles of services, which can include software, technology fees, bookkeeping and more.
Find out about pricing options to see what fits your budget best.
A bookkeeper will be a vital part of your business.
Be sure to take diligence in finding the bookkeeper that is the perfect fit for your business or you may be hindering your own business from growing.
I am writing this blog purely to bring across my own views about the forthcoming changes to the way the Revenue deals with our tax affairs.
By early 2016 millions of people should be able to access their personal tax accounts via the HM Revenue website and their Gateway accounts. If you are one of them then you will be able to see details of what you currently owe in tax, Paye and more.
I am a strong believer that changes are inevitable and that the future will be a more digitalised system, the next generation surely won’t disagree. I am also in favour of a more centralizing database where the Revenue is able to collate information provided by our employers or else themselves rather than fobbing us off to different departments.
My concern is, how will the average person running a small business deal with those changes. Will it be necessary to invest in accounting software as the Revenue quotes:
“Their accounting software will be able to feed data straight into their digital tax account, so most businesses will simply log-in to check their details with no need to send an annual return.”
I believe that in years to come the majority of small businesses will find it beneficial to use accounting software and I know that there is a lot of development going on in the industry to keep on top of changes in the tax system, even though I struggle to find anyone who has a clear idea of how to implement these changes or to even know what they will be. It simply is a waiting game at the moment.
I spoke to the Revenue only this week regarding this issues surrounding accounting software and how they envisage to implement this.
The answer I got was as expectedly vague and non committing, according to them data will not be drawn directly from the software but rather to be submitted separately, similar to Vat return filing at present. I do agree that the abolition of a tax return shouldn’t be too much of a headache for the normal taxpayer, who I’m assuming is capable of dealing with their own affairs and will simply comply with adding quarterly details of income and expenditure.
But what if there is a dispute over human error for people choosing to use accounting software, will there be an automatic investigation? What about seasonal businesses or people who still pay things by cheque?
I do worry that some might find this too daunting to deal with and my personal advise would be to find help before penalties hit home as I know that the £100 late filing penalty in place at present will soon feel like a drop in the ocean as quarterly returns will come with much steeper quarterly fines.
Cloud based accounting software is in my honest opinion the way forward and will become more and more used by small and large businesses due to the need to be digital. The banks will have to agree on a standard platform for data exchange which the online accounting software providers will have to agree on.
The devil is definitely in the detail and the sceptical eye of the accounting world is crucial in implementing these changes. Times move on and so should we.
This all will not come without its costs to anyone required to file returns and there will always be some people not able to file online due to finance, disability, religion, lack of equipment or broadband. But one thing I am sure about is that this is the course the Revenue is taking, a leap to modernise the tax system keeping Britain the financial hub of the world.
Keep an eye out for my next blog on cloud based accounting softwares, the Pros and Cons.
Intermediaries such as employment agencies or anyone supplying more than one worker to a client outside of Paye, must submit an employment intermediary report to HMRC by 5 August 15.
Each reporting period covers 3 month starting from 6 April 15 and must be filed within one month to avoid being fined. Penalties will be issued on a case to case basis and can also be issued for incorrect and incomplete reporting.
The information required on the report includes:
NOTE: Where an employment intermediary merely receives a fee for introducing the worker to an end client but doesn't get paid for providing the workers services, then this arrangement would be outside this legislation and no information has to be reported.
Use the below link to preview the template report online and as CSV
Detailed information can be found on https://www.gov.uk/government/publications/employment-intermediaries-reporting-requirements/what-this-means-for-an-intermediary
or by contacting HMRC on 03000 555 995.
Please do not hesitate to contact IB should you require help with the reporting requirements.
From 6th April 2015 employers who have employees between the ages of 16 to 21 will no longer be liable to pay employer National Insurance contributions. This is up to the upper earnings level of £42,385 a year, saving the employer 13.8% on salaries paid.
This benefit however does not apply to benefits in kind and class 1A NIC will still be due for under 21s.
Employers will also no longer pay National Insurance contributions for apprentices under the age of 25, again up to the upper earnings limit.
I have compiled a short guide relevant to anyone thinking of forming an LLP or existing members of an LLP. It will give you a good idea of your responsibilities and explain the filing requirements at Companies House during the life of your LLP.
1. Members and designated members
An LLP has to have a minimum of 2 designated members in the form of individuals or corporate members.
Any changes must be submitted to Companies House within a 14 day period using the following forms
· Appointment of an individual member LL - AP01
· Appointment of a corporate member LL – AP02
· Change of individual member’s details LL – CH01
· Change of corporate member’s details LL – CH02
· Termination of appointment of member LL - TM01
2. Registered Office and Service address
The LLP’s registered office address is used by Companies House for communication purposes and does not have to be the same as your service address. This address can be used by a member to receive communications from third parties about the partnership. The residential address can be used for both the registered office and service address, this will however make it appear on the public record.
You can change your registered office online via WebFiling or by sending form LL AD01 to Companies House.
3. Annual Return
An LLP’s designated member must deliver an annual return to Companies House within 28 days of its made-up date. If you do not deliver an annual return the registrar may assume that your LLP is no longer in business and take steps to strike it off the register.
Companies House currently charges a £13 online filing fee for online WebFiling and £40 for paper documents, payable at time of filing.
An annual return is a snapshot of information at the made-up date.
· Name of the LLP
· Its registered number
· The date of which the annual return is made up
· The registered office address
· The SAIL address ( the place where the LLP keeps its records)
· Details of all members (corporate and individuals)
The made-up date can be changed to an earlier date but not later. An annual return can also be filed by paper using form LL AR01. (Be sure to use the newest version)
4. Accounting reference dates
A financial period is usually a 12 month period for which you prepare accounts. The accounting reference date is the last day in the month in which the LLP’s first anniversary falls. For example, an LLP was incorporated on 1 October 2013 will have its first accounting reference date as 31 October 2014 and 31 October for every year thereafter.
The accounting reference date can be changed to extend or shorten the accounting period immediately after the previous period has ended. You may shorten the period as many times as you like but there are restrictions on extending a period:
· You may not extend a period so it lasts more than 18 month You may not extend more than once in a 5 year period unless the LLP is in administration or the Secretary of State has directed that this can happen
· You can also not extend the period once the accounts are overdue
5. Accounts preparation
There are 3 types of LLP's: small, medium and large.
A small LLP must have an annual turnover below £6.5 million and must not have more than 50 employees. I will concentrate on small LLP's only below.
The members of a small LLP are responsible for the preparation of annual accounts. Small LLP's can prepare much simpler, less detailed accounts than those required from medium and large LLP's. They are entitled to deliver abbreviated accounts even though that does not affect the LLP's obligation to prepare full accounts for its members.
Small LLP's do not have to deliver a copy of the profit and loss account to Companies House.
The accounts must be send to every member of the LLP and they must be send to Companies House in paper form.
Please note: Companies House will not accept a typewritten name as a signature
You can check the date Companies House expects your accounts to be delivered by using the WebCheck Service on their website.
The normal time allowed for delivering accounts to Companies House is 9 month from the accounting reference date.
Note that when the LLP has shortened its accounting period then the new filing deadline will automatically be the longer on the 2 options:
1. 9 month from the new accounting reference date
2. 3 month from the date of receipt of form LL AA01 (change of reference date)
Failure to deliver the accounts in time will incur penalties for late filing of the accounts.
Please be aware that the accounts can NOT be delivered online and adequate time has to be given when sending the accounts to Companies House with regards to the filing deadline.
If your accounts do not meet the requirements of Companies House then they will be returned to you for correction. It is therefore necessary to make sure you file them well before the deadline.
One of the reasons your accounts could be rejected is for printing them on glossy paper with pictures. Companies House will only accept them black on white with a matt finish.
A typed unbound version of a printer’s proof is ideal providing it has the necessary signature.
With effect from 6 April 2015 new legislation will require all employment agencies to report additional information to HMRC. In short, all agencies must now submit quarterly reports to HMRC containing information on all workers where PAYE tax and national insurance is not deducted when payments are made.
This will apply to all workers who are supplying their services via an umbrella or personal service (own limited) company.
The downloadable template will need to be filed online using your government gateway login details.
I've picked some of the main quotes from the .gov website below, please follow the link for more information