Why is this? Generally, when business is good there is usually a trend towards marketing and other qualified professionals leading the companies, and when times are tough in come the qualified accountants and financial professionals as it takes a good eye for numbers to successful manage business through difficult business climates.

This doesn’t just apply to big business, small businesses in the North West Liverpool, Southport, Preston, also need to work harder for their money and keep a keen eye on the bookkeeping and accounting side of the business. Letting financial management slip causes many small business to fail. Either small business owners need to increase their financial knowledge (which often isn’t the best option as they are too busy and they didn’t go into business to be accountants), or they would benefit from professional support to help with the bookkeeping and accounts – which leads to the subject of the increase in businesses using outsourcing services.

Small businesses need to have strong financials, and employing someone is costly and along with it comes employment legislation, therefore outsourced bookkeeping is often the best option as it can be surprising affordable and excellent in adding value to small businesses.

Here at Strong Financials we work with self employed sole traders and small businesses owners in the Liverpool, Southport, Merseyside and Preston, Lancashire areas, helping them with their finances, providing bookkeeping, management accounts, payroll, year end accounts and business advice to help their business succeed.

To assist small businesses and self-employed people understand the basics of tax and know what their obligations are as a business person HMRC have launched a range of online tax webinars.  Tax knowledge isn’t just for accountants, small business owners really do need to understand at least the basics of accounting and tax issues.

HMRC tax webinars are in short 30 minute chunks making learning manageable, and for added convenience they can  be watched live or pre-recorded. The online tax seminars cover a wide range of subjects, including:

• Expenses
• Capital allowances
• Being an employer
• The Construction Industry Scheme (CIS)
• Self Assessment
• Limited companies
• VAT

All you need to do is register for the live webinars or enter your email for the pre-recorded webinars.

For more specific guidance and advise relating to your business you should always ask your accountant or business advisor.

All businesses need to generate cash because without it any business would have to cease operating, indeed it would be a legal requirement to do so. A good accountant in Liverpool, Preston or Southport will be able to help and give guidance.

Liquidity – this is the speed a business can realise cash pay its debts as they fall due.

Solvency – this asks the question is the business making enough output to continue – insolvent companies can’t pay debts as they fall due.

Balance sheet insolvency is when total liabilities exceed total assets, which would mean the balance sheets has a negative balance.

Companies can be cash flow insolvent whilst at the same time be balance sheet solvent, and be balance sheet insolvent whilst being cash flow solvent.

It is important to know and remember that it is a criminal offense to trade while knowingly insolvent

One advantage of a price cutting strategy is it can be implemented immediate and not many customers will complain. However their are dangers which often get overlooked.

Many business owners and managers fail to realise the impact of cutting prices. If a company has a gross margin of 50% and reduced prices by 5% it would need to increase sales by 11% to stand still, a 10% price cut would demand a massive 25% increase in sales to offset the price cut.

Yes, by implementing a price cut businesses may increase sales, but often not enough to make up for price cuts. Taking the example above a 10% cut needing a 25% increase in sales, that would mean a business with £1million sales would need £1.25million just to stand still. Sales would increase but profit wouldn’t until sales grew higher than £1.25million. This may not be achievable, and staff would need to work 25% harder to achieve the same bottom line.

Far too many businesses, both small and large use price cutting as their strategy to address problems of sales reducing or losing customers, often as knee jerk reactions, but often the problems lie elsewhere, usually in customer service, but also sometimes failure to communicate the value and benefits of their products or services, quality of products/services, etc. The company itself is often more concerned with price than customers, who may value other things such as customer services, so thought needs to go into what the real problem is instead of reaching for the price cut strategy as it is likely that price cutting won’t delivery the planned objectives and lead to people being busy fools.

The client in Ainsdale, who’s in the events and entertainment industry, was looking for a helpful and flexible accountants in Ainsdale or accountants in Southport that would give advice and support on the financial side of his business, help with VAT returns, annual accounts, and self assessment tax returns. Basically take the financial headache away!

He had researched the market and found lots of accountants and bookkeepers, but everyone seemed very prescriptive in how they wanted him to work. It all seemed like too much hard work. Sounds like the same old problem, people in the financial profession providing poor customer service. Where have we heard that before?!

Accountants Ainsdale, Southport

On a visit to the client’s premises we discussed his business, what he needed and found the right solution that would get the job done. Hassle free and affordable was the request, so that’s what we gave him. The starting point was where he was at and what worked best for him rather than the other way around, which was music to his ears (he is in the entertainment industry!).

If you are a sole trader or small limited company looking for Accountants in Ainsdale, or Accountants in Southport then get in touch, we’d love to make you a happy customer too!

Although always a challenge, running a business used a lot easier, less red tape, less competition etc, but things have changed and will continue to change. In general people are finding it harder to run a business regardless of the size of business, but especially so for small businesses.  The challenges include:

• Employment laws
• Employment costs – NI, holiday, maternity, sick pay etc
• selling products and services in competitive markets,
• ensuring the operations and projects are running smoothly,
• ensuring the bookkeeping and accounting is up-to-date and providing the correct information
• ensuring the legal obligations of running a small business are met
• etc, etc

Having seen what works for small business and what doesn’t, it’s clear that the best strategy for small business owners to take in order to succeed is to specialise in what they do and obtain support for the rest, otherwise they will be sidetracked into time-consuming none revenue generating tasks and that will not help the business.

With the business environment being uncertain employing staff is often a risky option, and expensive. Therefore small businesses are more suitable for outsourced business support, but business owners sometimes do not obtain support as they think it would be too expensive. They are often pleasantly surprised when they learn that bookkeeping and accounting support is available even for the smallest of businesses. Rates are affordable and charges only apply to actual work done, as appose to for a set number of hours when employing people which leads to large amounts of downtime. Outsourcing the bookkeeping and accounts also means small business don’t have to pay for sick pay, holiday pay, NI etc.

Also, by outsourcing the bookkeeping and accounting the business owner and or internal have more time to do what they do best and make money for the company.

Small Business Accountants in Liverpool and Southport

As bookkeepers and accountants in Liverpool and Southport we provide a range of financial management services specifically designed for small businesses including bookkeeping, Sage Accounts, management accounting, payroll, tax advice, profit analysis etc, which help our clients grow sales, cut costs and increase profits.

Don’t struggle alone, contact us today and explore how we can help you and your business in the future.

When is came to choosing accounting software, businesses used to choose from 2 main dominant players, Sage Accounts and QuickBooks. In the UK Sage is the market leader. However the past few years has seen the rise of online accounting and with it the rise of many new players, three being Kashflow, Xero and FreeAgent. All of which have their strengths and weaknesses.

Kashflow

Kashflow is a UK based company that offers all that’s needed for most small businesses, it has extensive reporting, the ability to manage stock with low stock warnings, different VAT schemes along with the ability to submit VAT returns from inside Kashflow, and invoicing with a quote to invoice conversion facility. At the moment Kashflow doesn’t allow different users to have their own password, which may put some companies off but this might be changed sometime in the future.

Kashflow has the facility to upload a Sage backup which makes moving off Sage to Kashflow a lot easier than with the other systems.

Xero

Xero is based in New Zealand but is expanding worldwide at a fast pace, including the UK. The software supports automatic bank feeds and automatically matches many payments to invoices to help speed up ban reconciliation, leaving the user to match the remaining transactions. You can create invoices to be sent to customers, but at the time of writing you don’t appear to be able to create quotes and convert them to invoices. However another advantage of online software is the manufacturers can easily add updates without having to launch new versions, so small improvements can be continually made, so don’t be surprised if converting quotes to invoices comes soon, especially if enough users request it.

Xero doesn’t have project management or time billing built into the software, but these features and many others can be added via its API at a cost. With Xero you can produce many reports including the usual P&L, Balance Sheet and many more.

When buying Xero you have a few option, the cheapest restricts the number of transactions, the mid version which is probably the most popular for small businesses has all the functions available less multiple currencies, which is the reserve of the top priced version.

FreeAgent

As with Xero and Kashflow, FreeAgent does the accounting with its own additional features, in this case FreeAgent comes with Project Management and Time Tracking features, which could prove useful for its target audience freelance sole traders and small businesses as it keeps track of project expenses and budgets, and different users can have their own login with different permissions. It lacks stock control but it does allow you to add prices of stock and add them to invoices. It has a range of reports suitable for most small businesses and can be used to produce most of the self assessment figures. The invoicing tool allows you convert quotes to invoices.

SageOne

SageOne is Sage’s answer to online accounts. It has received mixed reviews and most say it’s too simple with not enough features, however like mentioned above improvements will probably be made as time goes on. One positive is Sage’s support, all the other systems only come with email support, whereas Sage offers telephone support too which can be useful for sole traders and small business owners with little bookkeeping  knowledge.

Converting from Sage

The only system that allows the user to export data from Sage to other system is Kashflow. It comes with a wizard which should enable users to import data directly from a Sage backup file. It is surprising that the other systems do not have this kind of feature as their aim must be to win customers off Sage, so the least they could do is make the job of moving to them easy. So hats off the Kashflow for getting this right.

Accountant Liverpool – Another about to become happy client!

This is another story of a bad a Accountant Liverpool . But it’s a good news story because we’ve gained an about to become a new happy client.

The usual complaints – poor communications, lack of customer service, missed deadlines etc. The client told us that they have been asking their accountant for their accounts to be completed since early autumn. Here we are 20th December and still no sign of their accountant Liverpool completing the accounts and they need to be submitted by the end of December. Given the holiday season is approaching there isn’t much time left! Not only is there little time for the accountant to complete the figures, but there will be no time for the accountant to sit down with the client, explain the accounts, let the client consider the figures etc. All of which should be done before submitting to Companies House and HMRC. Not only are they not happy about the service, they are also unsure about the quality of the figures that they have been getting in the past.

Accountant Liverpool

It’s amazing how many people have problems with their accountant. All businesses these days need to be customer focused or people will vote with their feet, like the person mentioned above. I bet the accountant expects good customer service when he uses other services, goes to restaurants, buys products. Why should accountancy and the business support that should go with it be any different? It should be even more important because small businesses rely of the support so livelihoods are at stake.

The other good news attached to this story, is the client actually runs two businesses, so in a way the accountant has lost two clients, and we’ve gained two. One mans loss is another mans gain!

Accountant Liverpool

What to experience good customer service? Give us a call, you might be pleasantly surprised!

The two key things to keep in mind is that all staff need to be invited and the limit per head shouldn’t exceed £150. If the party is just for say management then there is no tax exemption and all the money will be counted as a perk and taxed. If the company spends even £1 over the limit then all the £151 will be taxed, not just the amount over the limit. The limit can be spread over more than one party, so for example a company may have a summer and winter party then both can apply as long as both together don’t got over the £150 limit, so if both cost £75 per head then it won’t attract tax.

If you go over the limit then it could be costly as demonstrated in an article written in the Telegraph titled How to avoid the Christmas party tax trap , the article gives an example where a company spends £160 per head, all the staff are in the higher rate tax band, so the tax bill will come to approx. £140, meaning that the £160 per person party will rise to around £300 ! Quite a difference!

Need help with your bookkeeping or accounts. We are accountants in Liverpool and Accountants in Southport. Give us a call!

Travel & Subsistence

As a guideline you can claim expenses for business journeys for example to see clients, and also for travelling to a temporary workplace which could be a client’s office. The travel doesn’t necessarily need to commence from the business premises, it can commence from other places, like from your home. Employees travelling to work are not allowed to claim expenses to get to work.

Expenses relating to Travel & Subsistence could include:

• You can claim mileage expenses for when you use your own car (or van)
• Parking, toll roads, congestion charges
• Any public transport – train, plane, taxi etc.
• Subsistence – lunch when you are out of the office or at temporary place of work
• Hotels including food and £5 per night for incidental expenses in the UK rising to £10 per night for when you stay overnight overseas

Business Mileage (using your own vehicle for work)

If you use your own vehicle for business travel you can claim rates set by HMRC, from 2011/12 the rate for cars has risen from 40p per mile to 45p for the first 10,000 miles, then it drops to 25p.

More information can be found at this link http://www.hmrc.gov.uk/rates/travel.htm

Business Entertaining

Generally, entertaining isn’t and allowable expense by HMRC. When drafting the annual financial accounts, your accountant will disallowed entertaining expenses when calculating Corporation Tax.

It is allowable if you provide an employee with expenses for entertaining clients or if you pay directly. In general, entertainment is business-related and allowable if it is to discuss business, maintain an existing business contact or win a new business contact.

Entertainment isn’t business-related if its social – even if some business is discussed.

VAT can’t be reclaimed but according to HMRC there are two specific exceptions to the rule

• Recognised sporting bodies. VAT can be reclaimed if the body provides through necessity free accommodation and meals to amateur sports persons and officials who attend an event.
• Airlines. VAT can be reclaimed if an airline provides catering and accommodation for passengers who have been delayed.

Fore more information:

http://www.hmrc.gov.uk/paye/exb/a-z/e/entertainment.htm

http://www.hmrc.gov.uk/vat/managing/reclaiming/entertainment.htm

Home Phones, Internet and Mobiles

The cost of business calls made from your home phone can be reclaimed as a business expense. No claim can be made for the phone line rental as this was going to be paid anyway. A second line can be installed and allowable for tax if the company pays and it’s in the company name not yours.

For mobile phones it depends on ownership – business owned phones are fully allowable but only the business calls of personal mobiles can be claimed.

Home internet can be claimed if it’s in the business name and personal use is minimal, but if it’s a personal internet paid by the employee then just claim the business usage.

Professional Subscriptions and Memberships

Subscriptions to professional bodies like the CIMA or CMI or Institute of Directors are allowable expenses. Check with HMRC to see if your body is allowable. If the subscriptions isn’t relevant to the employment then it may be disallowable.

Use of Home as an Office

HMRC recognises many people work from home these days so a small amount can be claimed for using home as an office.

For minor use the HMRC guideline is £2.00 per week if you still do most of your work out of your home.

To claim anymore than this and if you deem the cost of you working at home is significant, then you must be seen to be a home worker, with a dedicated office. If the sum you claim is large then the office could be excluded from your principal private dwelling allowance and on a sale of the property the proportion would be deducted and you may have to pay Capital Gains Tax.

Equipment Purchases – fully allowable when for the business.

General Office Purchases – fully allowable.

Training – Allowable as long as its relevant to the employment.

Eyesight Tests – Buying glasses isn’t allowable as a business expense but eye tests are if it’s necessary for the use of visual display equipment in your duties.

Disallowable expenses

• Business suits and clothing for work, except safety clothing and clothing with the company logo included
• Glasses
• Only the mileage is allowable, service, MOT and repairs are disallowable
• Training not associated with your job
• Golf club membership
• Items that are mostly used personally unless it can be proven they are for business use only – TV, Music Player.