Do you Sell Online?

Only a small proportion of UK SMEs do. The others could be missing out on the many e-commerce advantages. It’s clearly the way of the future and, unless they make the jump, they will be left behind.

Benefits of Online Selling

If you sell products, by adding online selling to your physical store activities, you will suddenly open the door to a much wider customer base, and you can keep on selling through every 24 hours. An online shop never closes.

This can also apply if you provide services. It can be a new way to take enquiries and there may be items, such as advice and guidance papers that can be ordered and provided online. It could take your business into new and lucrative directions.

Compared to having a physical store or office, an e-commerce website puts no strain on your finances. There’s no rent to pay, and utility costs are minuscule. Your only investment will be in webhosting and maintenance.

When you get recommendations via social media, most people would not be able to physically get to you. If you sell online, this is never a problem. Offer an excellent product with brilliant service to wow your customers, and social media can bring you masses of online business.

Order processing and data capture will happen automatically on a website. It’s also easy to track online sales and monitor buying trends so that you can respond accordingly and match what you offer to what the consumers want.

Having both an online and a physical business can be a big help with marketing. People can do online research that will bring them through your doors when they go out to shop. You can make the links between the two sides of your business obvious with, for example, a competition flyer handed out at the checkout which has to be completed at the website. On the other hand, the website could communicate special offers in store or offer a discount voucher to be used there.

Making it Easy

If you are put off by the prospect of taking online payments and organising shipping, a little research will show you various readymade options that will do it all for you for a small monthly payment and transaction percentage fee. Some offer free advice on selling and marketing.

The one job you will have is to write compelling product descriptions, but if you can’t manage that you can outsource it to an expert copywriter. Why not ask your outsourced bookkeepers if their experience covers e-commerce clients? You could pick up some tips from them. 

Smarter Purchasing to Reduce Costs

Most entrepreneurs start a new year determined to make changes that will bring benefits. One of the areas of your business it could pay to take a good look at is purchasing. Sometimes we set up procedures, and get into habits, that are great at the time but may not continue to be the best way to do things as the business develops. Here are some questions that might help you recognise where this might be the case.

Having the Optimum Number of Suppliers

Are you buying just what you need, or are there some things you could do without that are eating into your profits? Can you prioritise what you need most and what could wait for a month or more? Could you reduce the number of suppliers you deal with so that you buy more from a few and could negotiate discounts for larger orders?

On the other hand, are you at the mercy of one major supplier, and have you thought what you could do if that one let you down for any reason? Having more than one supplier of the goods you need to buy gives you both back up and bargaining power.

Benefits of a Buying Consortium

Have you considered going into a consortium of buyers that place regular orders together? Companies that do this can share the burden of regular reviews and market testing for more economical ways of purchasing. They can also share due diligence reports on the supply chain to help with compliance with the new anti-bribery laws. When new suppliers are coming on board, a consortium has more negotiating power on price, terms and conditions than any individual SME.

Stock Management Procedures

Do you have procedures for checking goods on delivery before signing for them or noting that they haven’t been checked on the delivery note with the signature? Do you manage your stock so that you don’t have to hold more than you need at any one time?

If you have good relationships with your suppliers they may come up with ideas to help you. It’s in their interests to keep you happy and coming back for more. Some will even hold stock for you to be delivered as needed.

Benefits of Buying or Leasing

Sometimes it’s more economical to lease a major item than buy it. It can change your tax situation, so remember to discuss this with your outsourced bookkeepers. You only need to buy the advisory time of your accountant if they feel it necessary. 

Getting Ready for Your Annual Accounts

If you have a company with a March year end, you may be starting to think about the annual accounts about now. Your outsourced bookkeepers should have everything kept up to date, but did you know that the responsibility for accuracy lies not with them, or with your accountant, but with you jointly with any other directors of your company? You have 12 months from the year end to submit them, but most people do it three months before that, at the time that tax must be paid.

The Small Business Submission

If your turnover is less than £25.9 million, you only have to submit a Director’s Report and a Balance Sheet. If you are fortunate enough to have passed that turnover milestone, the requirements are a little more onerous; you also need a Profit and Loss Report – covering sales income, expenses and other costs, and your profit or loss for the year – and explanatory notes with extra details about items in the accounts. The format of the submission should comply with UK accounting standards and the headings specified in the Companies Act.

The Records you Must Keep

Regulations also stipulate that you must keep records to back up the accounts for a number of years. These include your bank statements, cheque and paying in books, confirmation of internet payments; invoices for purchases and copies of sales invoices; PAYE records for employees if any, and for directors; VAT records if you are registered, a list of fixed assets with date of acquisition and depreciation applied; any stock held at the year-end and/or the value of work in progress not yet invoiced at the year end.

It is therefore necessary to do a careful stocktake on your year-end date, and to work out its value at the lowest figure between the cost of buying it in or producing it, and the sales revenue you expect to receive from it. If you are a service company you should work out the percentage of work already completed on specific projects which will be billed on completion so that you can accrue a reasonably accurate percentage of that figure.

You need a list of outstanding debtors and creditors, noting any bad debts that you may not be able to recover. Also record any disputed invoices from suppliers.

Making the Most of all This Activity

Depending on your relationship with outsourced bookkeepers, they may prepare all this for you automatically. Still, it’s worth checking with them whether you would gain any tax or other benefits from doing anything else before your year end to bring things into the accounting period. This is also a really good opportunity to take a hard look at your business practices and make sure you are not wasting time or money, or missing opportunities to save them.