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Quarterly snapshot for business owners who want to be in the know March 2019
How an exhibition nearly crippled our business...
Have you ever been a victim of your own success? Have you ever done something to grow your business that was too successful and you struggled to cope with demand? We have… we did a two day exhibition at a business convention once that nearly crippled us, this is no exaggeration we really did struggle to stay afloat for a while. You see it was before we had proper procedures and monitoring of our KPI’s. We’d been growing steadily and been offered the chance to exhibit at a business convention, we knew that the people organising the event TI Accountancy: Tip The Wink - Mar 2019
were going to talk on stage about how important it was to “know your numbers” so we jumped at the chance of having an already primed audience at our stand. In those two days we had 23 business owners signup. Now 23 new businesses might not seem like a lot, but it was worth an extra £77,000 a year turnover!! We went back to Cumbria elated …. But the euphoria didn’t last. While we knew this meant finding a new member for our team we didn’t even put an advert out. www.tiaccountancy.co.uk
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How an exhibition nearly crippled our business... Then trying to onboard all 23 people at the same time was a nightmare – we were getting inundated with paperwork and even though we took on new staff the existing team had to take time out to train them. Our normal turn around duration for monthly bookkeeping is 14 days, by the end of the second month after doing the exhibition our turnaround had gone over 30 days … our customer service had become shocking. This wasn’t just affecting our new clients but it was also effecting our existing ones too. I remember sending our bars of Cadburys chocolate and cards to some clients apologising for not being able to get round to the them soon enough … some were getting their management reports a whole month too late! It wasn’t good enough! We lost a number of clients in this period and it still breaks my heart now to think there are business owners out there that think our customer service is horrendous, because amazing customer service is what we built the company on. Since those few disastrous months we have put new measures in place to ensure that it never happens again. For instance, we only take on 4 new clients per month now as we know that onboarding a client is a lengthy process and we need them to feel like we are holding their hand throughout the process. Also, we monitor how many hours in total we truly need to service a client (not just how
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Good things come in software packages
long the actual bookkeeping takes) and also how many productive hours each team members realistically has to work on clients. By putting these two monitors in place we now have a better understanding of when we need to take on a new member of staff. Are there any measures in your business you could put in place that would stop you being a victim of any success that might be coming your way? What KPI’s do you monitor to ensure this never happens to you?
Tracy x
Puzzle
April brings the start of a new tax year and whether you currently use spreadsheets, a desktop/online accounting system or dare I say still using a pencil and paper, if you have been thinking about switching to a better system now is the perfect time!
With HMRC looking to widen the scope of MTD in April 2020, here’s why the first week of April is the best time to move A new accounting year This is the point of the year when accounts from the previous year are being finalised and you’re starting afresh for the new year.
For most sole traders the new accounting year starts 6th April and it is also the case that for many limited companies, 1st April is the start of their new accounting year. (If this is not the case for you, switching accounting systems can still be considered, however, it may be best to wait until your new accounting year). Less work involved The amount of information you need to input into a new accounting system is much less at the start of a new accounting year. This is because you can just carry over summary figures for example:
• Accounting dates and details e.g. yearend dates, VAT registration details etc. • How much your business owned and owed at the end of the previous accounting year e.g. how much cash was in the bank, what customers owed you, what you owed to suppliers etc. Making Tax Digital Once Making Tax Digital comes into effect, summary data will need to be sent to HMRC on a quarterly basis using an accounting software.
If you do not currently use an accounting software it would better to consider moving to one before the MTD introduction date rather than leaving it until the last moment. At TI Accountancy we use a variety of online accounting software that offer different price plans depending on what you require. If you would like any further information, please contact us at admin@tiaccountancy.co.uk
Lucy www.tiaccountancy.co.uk
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A Company Profile his family is a huge high for Joe, however, he feels the down side to his success are the barriers the government put in the way of small business. Now that he is also supplying floors as well as fitting them he has had to go VAT registered, and as the majority of his clients are domestic, it has had an affected on the costs he has to charge on his labour. He believes the government should have a 2-year buffer for new businesses before having to charge VAT and having a reduced rate to those that serve domestic clients. In his opinion the current system penalises business owners when they are doing well. In his spare time Joe likes to spend it with his family and staying active, he enjoys playing
Joe’s passion shines through his flooring business.
football and going to the gym.
Joe Murphy has just celebrated 3 years in
Joe has 26 years’ experience and supplies and
Joe says that it makes him more organised. He
business.
fits safety flooring, carpets, linoleum, LVT,
keeps his invoices and receipts tidy to give
Amtico, karndean, Rubber & vinyl, click flooring,
them once a month and getting reports on a
ply board & self-levelling compounds.
monthly basis gives him peace of mind that the
He started the business to give himself the flexibility he wanted between working and being a Dad. Wanting a healthy work/life balance comes top of Joe’s priority list and he relishes doing the school run with his kids. Between Joe and his wife Margaret, who works as a legal secretary, they have built the business to a size that keeps Joe busy.
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With such an impressive local reputation and offering an exceptional quality service Joe is always busy but has no desire to take on staff.
Having TI Accountancy doing his bookkeeping
business numbers are correct and that HMRC wont come knocking on his door, as everything is filed accurately and on time.
The passion he has for his business shines
Joe says he regularly recommends TI
though in every aspect and he delights in doing
Accountancy to other business owners and
everything from the quotes to fitting the floors.
loves the fact they help him feel like he’s on top
The ability to earn a good living for himself and
of all the admin side of his business giving him more time to spend with his family.
www.tiaccountancy.co.uk
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New Year Fresh Start!
Don’t let the USA‘Trump’ you on your PI Insurance! Although digital technology can drive us all mad at the best of times, one of the great things about it is geographical limits are eliminated – the world is your oyster, so they say!! Insurance has kept up with this and many Professional Indemnity insurance policies can provide cover for work carried out all over the world… except for the USA and Canada. You increase your chances of facing legal action if you do business with companies based in the USA. Therefore, many insurance companies do not cover the USA as standard and not many will provide the cover required to meet US legislation. You can get insured……it will just be quite a bit more expensive. The increase in premium takes into account the higher risk of a claim, along with the cost of having to appoint and monitor legal
TI Accountancy: Tip The Wink - Mar 2019
Payroll Allowance Changes for 2019/2020 If you are anything like me then you’ll like to know what is ahead so you can be prepared.
I thought I would share the changes coming in from April 2019 in regard to your allowances for 2019/2020. This will be handy to know if you are looking at certain areas in your business such as pricing, taking on a new member of the team, looking at what tax you will pay this year.
people ‘over the pond’ which is an additional cost to the insurance company involved. If you don’t want to pay this extra premium, you can try and get your USA or Canadian client to sign ‘your’ contract rather than you putting your signature on theirs. That way, you are creating a UK based contract with UK terms and conditions. It sounds like a small point but this can make a massive difference should legal action take place, as it will take place through a UK court. As with everything in insurance, the devil is in the detail. Should you need any further advice or help on this, please contact me on sarah@tiaccountancy.co.uk
Sarah
Personal Allowance Personal tax-free allowance for UK residents will increase to £12,500.00. Basic & Higher Rate Threshold Basic rate limit will be increased to £37,500. As a result, the higher rate threshold will be £50,000. National Insurance National insurance Threshold will increase to £8,632.00 for the year.
Employers NIC are 13.8% of earning over £166 per week. Employees NIC are 12% on earnings of between £166 and £962 per week, and 2% thereafter. Student Loan Employee earnings threshold at which repayment of student loan begins: –
• Plan 1 employees must earn £18,935 per year £1,577 per month, £364 per week. • Plan 2 employees must earn £25,725 per year, £2,143 per month, £494 per week. • The percentage for student loan Deducts stays the same at 9%
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Pension Contributions Employers Contributions percentage will increase from 2% to 3% and for employee’s percentage will increase from 3% to 5%. Statutory Payments
• Maternity Pay– The current weekly rate for statutory maternity pay is £145.18, or 90% of the employee’s average weekly earnings if this figure is less than the statutory rate. This will increase to £148.68 from the first Sunday of April which is 7th April 2019. • Paternity Pay and Statutory Shared Parental Pay – This weekly rate will also increase on the 7th April 2019 to £148.68 • Statutory Adoption Pay – This weekly rate will also increase on the 7th April 2019 to £148.68 • Statutory Sick Pay – is also increasing from £92.05 to £94.25 on 6 April 2019. To be entitled to the above, an employee’s average earnings must be equal to or more than the lower earnings limit. The lower earnings limit is increasing from £116 to £118 in April 2019. Holiday entitlements There haven’t been any changes to holiday entitlement but it’s always good to refresh our memories.
Employees are entitled to 28 days holiday a year, employers can include bank holidays within the 28 days if they wish or they can be given on top unpaid. If an employee starts part way through the year, they won’t be entitled to the full 28 days. If you would like to discuss any of the above further, please contact me.
Kelly www.tiaccountancy.co.uk
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