What Do Your Bookkeepers Do for you?

 

November 4th, 2013 saw the start of the first National Bookkeeping Week. It sparked a discussion of how the bookkeeping can make or mar a business. Done well, it can help you to grow and blossom. Done badly, it can cause your downfall.

The most important thing a good bookkeeper can do is to help you keep tabs on your cash flow and warn you if it’s not looking too good. One of the main reasons for poor cash flow is not receiving payments from your customers at the right time. And if you don’t get your invoices out, you can’t expect the payments to come in. 

Timely Invoicing

If you have outsourced bookkeepers who do your invoicing, you know the invoices will all be prepared and sent out as soon as possible, as long as you pass on the details of sales or work completed. They won’t be able to invoice what they don’t know about, so if that sometimes happens, you probably need a ten minute chat to devise a fail-safe procedure for getting the information to them.

Credit Checking

Getting new business is great – provided you can expect to be paid for it. If you’d like to do business with another company, it makes sense to check its credit rating before making a commitment. But that takes time you may not have. It’s another job your bookkeepers could do for you.

Payment Chasing

If payments don’t arrive on time, the first step will probably be a statement sent out as a reminder, which can be a routine activity performed by your bookkeepers. When you don’t get a response even after that, you probably need to follow up with a phone call. If you have to do it yourself, you might have to put it off for days or even weeks before the right moment arrives. A note about it could easily be buried and forgotten under a pile of other reminders of things you have to do. 

If you have your outsourced bookkeepers on side, you don’t have to worry about this. They could make calls for you, just passing back to you anything which needs a decision only you can make. And they can jog your memory to make sure the really important calls are not forgotten.

Giving you Peace of Mind

When all these important aspects are taken care of, your cash flow will be as good as it can get. There will be money to make your own payments on time, and keep suppliers and the tax man happy. Your bookkeepers will also make sure that you also have accurate financial records always at your fingertips. You can get on with running your business and keeping your customers happy.

The Problem of Business Inflation

It’s official. Business inflation is still more than twice as high as that for consumers. In 2013 it is running at over 6%. On a positive note, it is not quite as high as 6.7%, which was last year’s statistic. The news comes from a survey of members of the Forum of Private Businesses. It reported that costs had risen for a number of areas.

 

Energy Costs

 

Not surprisingly, the first was energy, the field where price rises have been dominating the news and the speeches of politicians. Despite all their efforts, everyone is facing these rising costs, and businesses which cannot operate without energy are being even harder hit than households.

 

If you feel you have been really unfairly treated by an energy provider, you may be able to complain to the Energy Ombudsman. This costs nothing but will only apply if you fall into the category of micro business, i.e. you don’t have more than 10 employees and your turnover doesn’t exceed £2 million. If you don’t quite fit that profile but your annual consumption of electricity is 55,000 kWh or less, and/or of gas is not more than 200,000 kWh, you could still be eligible. Other SMEs would need to take legal advice on whether it is worth pursuing a dispute with an energy company.

 

Transport Costs

 

These were listed next. Whether you or your employees have to travel by road, rail or air, the costs are rising. The recent announcement of another fuel duty freeze is welcome news, but the best way to cut these costs is to travel less. Video conferencing technology has come on in leaps and bounds, and a small investment in this could save you money on travelling to meetings in different parts of the country or even in other countries.

 

Marketing Costs

 

For a small business, it’s important to maintain awareness in the markets and to continually attract new customers. But marketing campaigns can be costly and not always bring the response you want. Your bookkeepers should be able to help you monitor that. You also have to be really careful that you have your targeting focus right and use social media and other cheaper means available to reach that audience.

 

Materials and Stock

 

Your suppliers will be feeling the pinch just as you are. Small businesses often have to pay over the odds for small deliveries of goods. One way to get around this problem is to join a consortium of local businesses, which can order in bulk and have much greater negotiating power. Ask your outsourced bookkeepers if they know of one that you can join. If not, with all their local contacts, they could be very helpful in getting one set up.

Small Business Aspects of the Autumn Statement

The Chancellor’s Autumn Statement wasn’t all doom and gloom. There is some heartening news for small businesses, despite his assurances of continuing austerity measures.
 

Changes in Business Rates 
 

The vexing question of rates for small businesses has been addressed, with small retailers reaping the most benefit. They will receive a £1000 discount in the next two years. A 50% discount has also been announced for anyone moving for trading purposes into a property that has been left vacant. The small business rate relief scheme is to continue beyond 2014, and you will be able to pay in 12 monthly instalments. All business rate rises will be capped at 2%. 
 

Checking the Rising Cost of Using Your Car 
 

Other areas helpful to the small business include the freezing of fuel duty again in 2014. And the Chancellor took the opportunity to emphasise that without this and his previous decisions not to increase the duty, petrol and diesel could be around 20p higher per litre. 
 

Young Persons’ National Insurance Contributions Scrapped 
 

The government wishes to encourage employers to recruit young people so, if you employ anyone under 21, from April 2015, there will be no national insurance contributions due for them. This has been criticised for making life harder for 21 year old job seekers, and for not encouraging young people to gain more skills before taking full time employment. It is, however, good news for workers who will be in the right age bracket, and it may slightly reduce the financial burden on employers, who will also be eligible for the £2,000 Employment Allowance that will come into effect in April 2014. 
 

Responding to Regulatory Change 
 

Every time regulatory changes are introduced, small business owners must take note and make the appropriate administrative changes. If you know that your outsourced bookkeepers can be trusted to deal with all of them, it can take a load off your mind. Without this kind of assistance a good part of a number of working days could be taken up with sorting out what adjustments you will have to make – time that could otherwise be usefully put to your core business activities and developing them further. 
 

Pretty well everything announced by the Chancellor has a future start date, and these dates can easily be missed when you are busy getting a firm foothold in the markets. That’s when having proactive outsourced bookkeepers can really pay dividends. You can get on with your everyday business life knowing that you won’t have any compliance issues and all your financial responsibilities will be taken care of at the right time.

Reaping the Benefits of Management Accounts

Loughborough University’s Deputy Director of its Centre for Global Sourcing and Services, together with the Chartered Institute of Management Accountants and SKS Business Services, recently published a report entitled Accounting for Growth. The report explains that many SMEs think of their accounting function as just performing a ‘bean counting’ exercise, instead of encouraging management accounting techniques to support the business objectives. 
 

Knowing About the Significance of the Numbers 
 

When you are familiar with your accounting history, you should find it easier to look forward, meet challenges, and recognise opportunities that can be managed to your advantage. When you know what all the figures mean, they can help you make plans and set budgets, understand your risks and make more informed decisions. 
 

Of course, all this takes skills and time that you may not have personally or within your own team. If you outsource your bookkeeping to an experienced and committed provider, you can focus your own efforts on your core business activities – as long as you get regular, accurate management reports and recommendations from the bookkeepers. 
 

Just as we all know that the cost of living is rising for households, so it is obvious that general and administrative costs for businesses are going sky high. It has never been more important to find ways to drive revenue up and manage costs.  
 

Catching up with the Major Players 
 

Ian Herbert said that in recent years major companies have managed to reduce “back-office costs dramatically through the use of shared service centres and outsourcing …. (now) new solutions are now becoming available for smaller companies to mimic the more flexible sourcing strategies of the large companies.” For example, if you have more than one location, or partners or staff out and about, you should be considering using the likes of Skype, join.me or Dropbox for communications and file sharing.  
 

Whether you can take advantage of these and other more costly technological solutions depends to some extent on your finances. If you need to raise funds for acquiring new technology or investing in growth, having an accurate record of your business finances will help you put a good case to potential lenders or investors.  
 

Peter Simons of CIMA said “The UK’s economic recovery is dependent on the SME sector, but many smaller companies could be performing below their potential because they are not making full use of their finance professionals”. So be sure you are making full use of your outsourced bookkeepers. The time taken to discuss the reports you need and how to use them could bring huge rewards.
 

Tips on Developing Your Business

Do you have a plan for business growth? It really helps to have a long term vision, and a plan to make each of the small steps you can take to bring closer to that final goal. First though, you need to be aware of your strengths and weaknesses.

A Business Review 

Take a good look at how your business has been performing. Ask Office Assistants to help you identify peaks and dips in profits and work out why. Where and how have you been most successful? Have you made mistakes in the past? Did you learn from them and make changes to turn things around? Are there still areas for concern? So what are your strengths and what are your weaknesses? 

Overcoming the Weaknesses 

If your weaknesses will hamper your chances of success, you must find a way to address them. Perhaps you need to recruit new skills or approach potential partners. But where will the money come from to attract and reward them? 

Now you must look at your strengths. They are there to be exploited, so you can aim to build on what you are really good at. What makes your customers choose to buy from you and return for more? If you don’t know, why not ask them? Issue feedback forms and offer rewards for those who return them. Better still, make a few phone calls to the really loyal ones. 

When you know what they think you are best at, find a way to do more of it and grow your revenue that way. Then you will have more profit to invest in overcoming your weaknesses and allowing even more growth. 

Identifying and Setting up the Small Steps  

Always remember that your best marketing tool is a good base of loyal customers, and whatever you plan to do must keep them interested, satisfied and coming back for more. They can help you find more customers by enthusing about your products and services among their family, friends and social media networks. One of your small steps could be to run a campaign in which you ask them for referrals in return for a discount voucher.

 

Your loyal customers can also let you know if they want more of the same and offer ideas about what else they would like from you. Another small step could be to decide whether to focus on developing what you already do, or whether to diversify into new products and services. 

Should you invest in more advertising? Should you target new customer groups? Should you stay local or expand geographically? What kind of internet presence do you need? Don’t forget to keep tabs on your competition and how you can be different. 

Phase in the various small steps over time. You can’t do everything all at once. The plan should remain dynamic, so make a point of reviewing it at regular intervals to judge the rate of progress and make changes where appropriate. Taking full advantage of Office Assistants by involving us means you will always stay on top of your financial situation and will gain the benefit of our ideas and experience as well.

Regulation Reforms for the Small Business

October 1^st 2013 was one of the Red Tape Freedom Days, on which the government introduced a number of reforms in the regulatory requirements of small businesses. They were in response to the Red Tape Challenge which looked at how to minimise the effects of, or do away with altogether, some 3,000 regulations. The government believes this will make life easier for small businesses and encourage more start-ups.

Employer Liability Reduced

 

Among the reforms now in place are changes to harassment legislation so employers will not be automatically liable for staff being harassed by third parties. If this is by your customers or members of the public, it is not really in your control, so the regulation is now much fairer. Of course, you must still try to protect staff wherever possible, by removing them from situations where this is likely to happen, for example. Similarly, if you are an employer, you will no longer be liable for workplace accidents, as long as you have assessed all risks and taken preventative measures.  

Freedom from Some of the Red Tape 

Office Assistants will join you in welcoming another measure, which is that unnecessary statutory forms have now been replaced with more flexible methods of submitting company reports. Introducing the reforms, Business Minister Michael Fallon said, “For small firms, less time spent filling in forms means more time planning the next project, winning the next contract or looking for the next young recruit.” 

Local Growth Minister Mark Prisk said, “The government is setting business free from red tape to the tune of over £212 million a year so local traders can generate the kind of enterprise that is vital to our economic growth," He also referred to the total amount of business rate relief for small shops, which has been increased from £300 million to £900 million. 

A Word of Warning 

The exemption for micro businesses from the EU requirements to produce profit and loss accounts and detailed balance sheets is not yet in force, but will be implemented later this year. This has prompted a warning from Experian, the major information services provider. If you don’t submit information to Companies House, you need to check your credit rating regularly and make sure the credit reference agencies have enough information about your financial situation to give accurate credit references. Office Assistants agree this is vitally important if you need to finance your business plans.

The Importance of Having Sensible Payment Policies

Some business owners have never thought about having a payment policy. Deadlines on bills, wages and taxes come and go; amounts due get paid as soon as possible. When available cash doesn’t cover it, the deadlines slip. 

But this can be expensive and make the situation worse. Penalties for late tax payments can be severe. If you don’t pay your employees on time, you won’t keep them long and morale and production will slump. If you don’t pay your suppliers on time, they can hit you with late payment interest and will be far less happy about doing business with you. 

A Policy for Commodity Suppliers 

A payment policy on suppliers should start at the beginning of your relationship. You’ll make choices based on their reputation for reliability and quality, how much they charge and their normal terms for payment. If the latter is likely to make problems for you, you may be able to negotiate. This will be easier if they know you have lots of choice among their competitors, and if you have set a general policy for payment in, say, 30 days from date of invoice. 

Don’t forget to communicate your payment policies to your outsourced bookkeepers, then they can check that they are being adhered to and are working well. Another option for a general policy is to set a monthly payment date. It could be, for example, the nearest Friday to the 15^th of the month, or the second or third Wednesday for paying all invoices dated in the previous month. For some supplies this could give you an extra week or two to pay, and the suppliers will know that, if they don’t invoice you before the end of the month, they’ll have to wait longer for the payment. 

As long as your suppliers have been made aware and agreed to your terms, they will know when to expect your cash and will not hassle you beforehand. When you normally pay up as expected and work at maintaining good working relationships with them, if you run into occasional cash flow problems, as long as you warn them, most suppliers will be sympathetic and give you some leeway. 

A Policy for Vital Payments 

There are bound to be some creditors who won’t play ball with your general policy and could make things difficult for you if you don’t comply with their terms. You need to identify these for priority payments. You don’t want to your landlord to start eviction proceedings on non-payment of rent, or the local authority to sue you for non-payment of business rates. Utilities providers are important too or services could be cut off. Your bookkeepers can help you make sure all these payments are made on time, as well as all the different tax payments that have different deadlines month by month and year by year.

Do Not Allow Your Systems to Let you Down

According to Hartmut Wagner, MD of Cloud Solutions Exact, “many SMEs who are eager to grow are not doing themselves any favours, particularly with so many of them expressing concern over their cash-flow.” He was referring to the results of an online survey, commissioned by Exact from Atomik Research, of 450 UK SMEs. It found that many of these companies were losing out big time through poor internal systems and procedures.  

Staggering Loss Potential 

About a quarter of respondents did not feel completely in control of their business finances. Some even said that they had omitted to send out invoices. If the potential losses were replicated across the 4.8 million SMEs noted in the Business Population Estimates for the UK and Regions 2012 report of the Department for Business Innovation & Skills, they could add up to over £3.7 billion.  

With concerns over cash flow and business finance being the second biggest stress factor for entrepreneurs, the first being getting enough business, losing out on revenue because of poor invoicing procedure is the last thing they need.

Use Financial Support Professionals Wisely 

The survey also looked at the relationship between the companies and their accountants who, it was reported, were the most trusted business advisers. But in the nature of the relationships, communication between them was irregular and sporadic, therefore best use of their professional skills was not being made. 

If you have outsourced bookkeepers, they are not likely to allow you to forget to send an invoice, as long as they know about the service or product that has been supplied. An objective viewpoint is often useful when you are so involved that it’s not easy to see the wood for the trees. When you have a good working relationship with your bookkeepers and are in regular communication with them, they can also point out inadequate procedures and potential problems, and help to prevent them. 

Good Communication Brings Rewards

The best bookkeepers can often save you the expense of involving your accountant, but will also know when that kind of professional expertise is essential. They will often have come across similar issues and difficulties to yours among other clients, and seen how they have been solved. You can benefit from their experience as long as you allow free communication and are prepared to accept their straightforward and down to earth advice. Make sure you stay in control of your business finances by discussing your systems and procedures with your outsourced bookkeepers and using them wisely.

Pension Auto-Enrolment Reminder

Pension auto-enrolment started a year ago and over 1,600,000 have been enrolled, with about one in ten opted out. If you have eligible employees, by now you should be well into your planning for this in your business.  

Who Will Qualify? 

To be eligible, employees should be at least 22 years of age and under the State Pension age. They should also be earning more than £9,440 a year from your employment working in the UK. This figure is the current level of the income tax personal allowance and may be subject to change. Other staff may be eligible to opt-in or to join. All businesses which, according to HMRC, had eligible employees at April 2012 have been allocated staging dates by which they must comply. These dates depend on the size of their payroll, but all employees should have been auto-enrolled by 2019. If you don’t know your staging you can find it by entering your PAYE number on the Pensions Regulator website. 

Within four months of your staging date, you must have enrolled your eligible jobholders and registered your scheme online at autoenrol.tpr.gov.uk. The Pensions Regulator website gives a detailed list of all the information required at the time. You must also inform other staff of their options to opt-in or join.  

Even if you currently have no eligible employees to enrol, if you have been given a staging date, you must register. That means you must have a qualifying pension scheme in place. The National Employment Savings Trust has a public service obligation which means it must accept all applications from employers, but many other pension providers will also qualify. To save yourself a lot of time and aggravation, you could ask your outsourced bookkeepers for some help with all this.  

Budgeting for the Extra Expenses 

Once you have completed your enrolments you have to pay at least the minimum contributions, which will start at 1% of the employee’s wage and increase over time to 3%. Depending on the number of employees, this could add up to a significant extra financial burden, so it is important to budget for it, and for all the other associated administrative expenses. Of course the employees’ contributions will have to be included as deductions on your payroll. It will be really important to have up to date software for payroll administration, and to have the right systems and procedures in place for these new regulations. Again you may need to look to your outsourced bookkeepers for assistance. 

Make sure you don’t fall foul of the Pensions Regulator which has already opened investigations into possible non-compliance in over 80 cases, has been issuing warning notices and its first non-compliance notification over a failure to register. The penalties imposed can be very costly to those businesses concerned.

 

 

VAT Knowledge Makes for a Healthier Balance Sheet

If you don’t reclaim all the VAT you are entitled to, you could be losing hundreds of pounds a year. If that continues over a number of years, you’re looking at thousands. According to accounting software giant, Sage UK, reporting on the results of recent research, over a third of UK SMEs could make ‘significant savings’ on their VAT returns. More than half the business owners surveyed believed they might be around £500 or more better off.

Complicated Rules

The problem is the complexity of the VAT rules and the frequency of change. Busy entrepreneurs think they don’t have time to acquire the knowledge they need or to keep up with the changes. Having outsourced bookkeepers helps of course. It is part of their job to understand VAT and keep up to date. But they can only work with the information you give them, so it is important to keep careful records and proof of your purchases and expenses.

Mandatory or Voluntary Registration

The current turnover threshold for VAT registration is £79,000. If your business has not yet reached that level you don’t have to register, charge VAT, and pay it on to HMRC. But you may wish to register anyway as there are some advantages. Being VAT registered is seen as a sort of coming of age for a young business. It may attract more clients and customers because they believe you are more likely to have the experience and expertise they need.

Another advantage of initial registration is being able to reclaim VAT on many of your expenses in previous years. For goods you still hold, you can claim on purchases made up to four years prior to registering. This can include major asset purchases such as computers and other IT items, desks and other office furniture. It can also include the consumables you keep in your stationery cupboard.

Because you can only reclaim VAT on services bought during the six months prior to registration, there can be significant advantages to registering soon after setting up your business. Then you can reclaim on the legal and accountancy fees connected with the set-up, any services related to your premises and setting up your equipment, and so on.

Talking it Over Helps

Whether you are VAT registered, need to register or are just considering registration, it would be a good idea to discuss the implications of VAT with your bookkeepers. For those already registered or about to, you need to make sure you are or will be reclaiming everything possible, or whether it might be more advantageous to be on the Flat Rate scheme. If you are not sure whether to register before it becomes mandatory, discussing the pros and cons with someone independent of the company can often help you make the decision.

Could your Business Save Money on Energy?

Are you locked in to an energy supply contract in which you have to accept price rises? Has your initial contract been rolled over onto a new one without your knowledge? Many fixed term contracts for power supply include a clause that allows them to do this unless you notify them otherwise within a window of months before the end of the initial contract term. This could start three or six months earlier, but if your attention was never drawn to the clause you could be unaware of it, like many other small businesses.

Government Concern and Intervention

Prime Minister, David Cameron, recently confirmed that he has been concerned about this automatic roll-over practice because it “can lock small companies into paying above market rates”. His government set up a working group to try to get voluntary agreements to end roll-over contracts. The Federation of Small Businesses is cooperating with Downing Street on the issue because a quarter of its members have been “locked into contracts with un-negotiated price increases.” 

You and your bookkeepers may or may not be aware that energy regulator Ofgem has now set new rules for contracts with micro businesses. They will apply if you have fewer than 10 full time employees, or their equivalent, and your turnover is below £2 million. If you don’t fit this category but use less than 200,000 kWh of gas or 55,000 kWh of electricity, the rules will still apply.

The terms of contracts must be fully and clearly explained before you sign up to them. They must also be supplied in writing and include a statement of renewal terms. Suppliers must ensure that customers receive a reminder of this statement not more than 120 days before the end of the contract, so that they have an opportunity to research the market and decide whether to switch or renegotiate terms.

Big Six Response

Meanwhile the energy companies are beginning to respond to the government’s concern. The first of the major suppliers, British Gas, has pledged to abolish the automatic rollover of energy contracts for SMEs this September. The next to agree were npower and SSE, then EDF Power, leaving, at the time of writing, only E.On and Scottish Power of the six largest suppliers.

If you are within four months of the end of a fixed-term energy contract, whether or not you have heard from your power supplier, it’s time to look carefully at the small print, and consider whether you want to switch, continue as before, or renegotiate terms. If you are too busy, you could ask your outsourced bookkeepers to check the contract for you and give you their recommendations.

Do Not Lose Your Entrepreneurial Spirit

Can you remember how you felt when you first set up your business? How proud you felt and how determined to make a success of it? No matter how confident you were, there must have been some anxious moments. Since fear of failure didn’t hold you back, you had a truly entrepreneurial spirit. Everyone makes some mistakes, but you looked forward to being able to learn from them and carry on moving forward.

The Local Contributions of Entrepreneurs

Did you also want to make a difference in your local community, to provide jobs, useful products and services so that you could give something back as well as making a profit? There are lots of other ways that entrepreneurs contribute to society as well. Once your business was making money, you might have apportioned some of it to charity sponsorship. You could be supporting local schools and colleges with work placement offers. Educational institutions and sports clubs might run competitions with prizes you have donated. And of course you are meticulous about energy saving and recycling. While you are giving in this way, you could also be getting good media exposure, so don’t hide your light.

Good Customer Relationships

Did you cultivate your customers, remember things about them, listen to their feedback and act upon it? This is something that entrepreneurs are well known for. As your business has grown, you probably find this aspect more and more difficult, but the right technology can make it quick and easy to save and retrieve the customer data you need. It could be worth an investment in a customer relationship management system, plus staff training in the maintenance of data quality so that you know you can rely on it to give you accurate and immediate information when you need it. Your outsourced bookkeepers recognise the importance of this and will probably have a host of stories about the difference it can make to the bottom line.

Good Team Relationships

Entrepreneurs are good team builders and leaders. You are certainly aware that no staff team is static, but will change over time as individuals come and go. Your responsibility is to keep tabs on that, making sure that skills gaps are filled, newcomers are made welcome and brought up to speed quickly. If you have the reputation of being firm but fair and approachable, you should get the best out of everyone.

Flexibility and Adaptability

Unlike the cumbersome decision-making processes of big businesses, small business owners can respond to the markets and make necessary changes swiftly. If you have retained your entrepreneurial spirit, you will be keeping abreast of trends in buying patterns and business management, and adapting them, taking a willing workforce along with you.

All these characteristics are aspects of the entrepreneurial spirit that you can’t afford to lose. Consider them carefully if your bookkeepers are reporting any problems with income generation or cash flow.

The New Broom at the Bank of England

The new governor of the Bank of England, Mark Carney, is already making his presence felt. Although he is relatively young, Mr Carney comes with a good pedigree. With a career that culminated in the post of Governor of the Bank of Canada from 2008 to 2013, he is also the Chairman of the Financial Stability Board. This is the international body set up to promote effective regulation and financial sector policies, and to coordinate the different national financial authorities and international standard setting.

In the UK, his announcements and intentions are all interesting, but contentious. Your outsourced bookkeepers will be watching developments to see how his policies will end up affecting you and their other clients.

The Base Rate

His recent statement that the base rate of interest is to be held at 0.5% until unemployment is reduced from its current 7.8%, to 7%, is a continuation of his policy of ‘forward guidance’, which he introduced in Canada in 2008. He believes it will give both mortgage holders and small businesses confidence about their debt management for several years, and therefore boost the economy.

It has, of course, elicited much criticism. He may or may not be able to carry it off, depending how inflation and other aspects go. His focus for our central bank is said to have swung away from the traditional one of controlling inflation, to an emphasis on growing the economy. His own predictions are that it might take about three years to create the 750,000 jobs needed to arrive at the 7% unemployment figure.

The Chief Economist at the Institute of Directors, Graeme Leach, certainly doesn’t agree that forward guidance will boost the economy. He believes that after “a moderate growth spurt over the next 12 months” we’ll settle back to something like a GDP growth of below 2%.

Another worry is that it will encourage people to borrow more than is sensible. Your outsourced bookkeepers will be happy to give you an independent opinion on how much debt your business finances can stand. Meanwhile, The Institute of Economic Affairs has suggested that Mr Carney is ‘playing with fire’, because inflation could run amok as it did in the 1970s, causing worse recession and having the opposite effect to the one intended.

Stance on Women

Speaking on BBC Radio 4’s Today programme, Mr Carney discussed the fact that there are no women on the Monetary Policy Committee. He said that the best female economists should be supported to develop all the way through the ranks. He will be encouraging female candidates for positions on the Committee and even for the post of governor when the time comes for him to step down.

Life at the Bank of England is not going to be boring under Mark Carney.

Non-bank Fundraising via Funding Circle

Are you fed up with waiting to hear if your bank will lend you the cash you need to take your business to the next stage? Or just daunted at the very prospect of asking for it? If you are a limited company or limited liability partnership with two years accounts filed and a turnover that has reached £100,000, you may do better through Funding Circle.

Advantages for Borrowers

Loan deals with this non-bank online funding facilitator are often better than you would get from a bank supposing it did offer you a loan, even factoring in the initial fee once a loan is agreed.

Goodbye to reams of forms, almost impossible security arrangements and other hoops to jump through before several months of waiting for a reply from the bank. You apply on-line with Funding Circle, which normally takes about 20 minutes. Then you have a chat with a decision-maker and get an answer in a couple of days. Why not ask your outsourced bookkeepers what they think of the system, and whether they know of anyone who has used it, either as a borrower or investor.

You can borrow between £5,000 and £1 million depending on your position and what you want to achieve. Your request will attract investors who bid in an on-line auction with the amount offered plus the interest required. You then have up to 14 days to accept the lowest interest offers. The funds will then be transferred to your account or they can go straight to a supplier if they are to purchase one or more assets.

Typical interest levels are around 7-10% for those who are prepared to wait out the auction for 14 days. The levels are usually much lower than you would incur with a bank. The total amount you repay includes the one-off fee to Funding Circle. In an example, a company borrows £40,000 over 4 years. Its total repayment of £46,165 includes a fee to Funding Circle of £1600. Monthly repayments are £962.

Advantages for Lenders

If you are in the fortunate position of having some spare cash you would like to put to work, you could instead become an investor with Funding Circle. You could spread your money around among a number of small businesses which have been assessed for their ability to repay. Get your bookkeepers to look into this and they may report that it is relatively low risk. The company claims that the average net return, before tax but after fees and rare bad debts, is 5.8% - possibly more than it would earn in a bank account these days. You would also have the feel good factor of knowing you were helping other small businesses to develop.

For anyone who needs early and swift access to their money, Funding Circle also facilitates the selling on of parts of loans to other investors – again for a small fee – which normally only takes a few days. You can even start your account with Funding Circle by purchasing some of these part loans at the level of risk that is comfortable for you.

Whether you want to borrow or invest, Funding Circle may well be the way to go.

Do you Have Favourites Among your Staff Members?

If you have favourites amongst your staff members, whilst you may be keeping a few of them happy, you could be alienating the rest. Some bosses don’t even realise they have favourites, and wonder why there is so much tension in the team.

Even if you think it doesn’t apply to you, it could be worth asking someone independent of your in-house workforce, such as your outsourced bookkeepers, what they have observed. They will probably have seen how quickly a seed of discontent can escalate and cause real problems in a business.

Know All your People

In a small operation, it’s usually possible to think about how every individual is performing, and get to know their characters and their ways. If you want to get the best out of your personnel, it’s also worth doing this, and then considering your reactions and responses to them.

It can be tempting to favour those who are confident, attractive and outgoing. They make their achievements obvious and you know they are deserving of praise. But they may not deserve it any more than a steady plodder who quietly gets results. It’s important for an employer or manager to look behind the façade of what is going on and recognise those who don’t push themselves forward.

Don’t Risk the Discrimination Accusation

When favouritism of one or two is noticed by other workers, they may feel aggrieved, even angry. They may come to believe they are being discriminated against – something every business owner needs to avoid to comply with the law.

In the Ceridian July Connection poll, more than a third of respondents actually admitted to having favourites, so if you are guilty of the same, you’re not alone. And once you realise it, there are things you can do about it.

Make Some Changes

Stop singling out your favourites, and look at how you can set goals and challenges more fairly. Only give praise publicly when it can also be awarded to several. A good idea would be to arrange regular update meetings where everyone has a chance to report on what they have been doing, what they have achieved and what has been getting in the way.

This would also be an opportunity to make sure everyone has the big picture and to exchange ideas. You would need to be a good leader and draw out the quiet ones, asking the questions that would show the rest of the team their value as a member.

You could find this would be a big boost to morale overall, and have knock on effects on production and eventually the bottom line, as your bookkeepers would be able to report.

Reduced Red Tape on Tax on the Way

The government has announced the introduction of a new digital system whereby you will be able to manage your own tax accounts online. Exchequer Secretary, David Gauke, said that the idea is that people should be able to manage their tax affairs just as they manage their bank accounts online.

The £200m investment in the new system will allow HMRC to provide a service “fit for the twenty-first century.” It will also reduce HMRC costs and save around £51m of taxpayers’ money in the first year of its operation, with the savings continuing from then, of course.

What it Means for SMEs

It should reduce the time and effort you and your bookkeepers have to expend on tax compliance and increase the time you have to focus on developing your business, because there will be much less paperwork and bureaucracy.

By 2015/16, as a small business, you should be able to view your organisation’s tax calendar and receive digital alerts, and have access to all your online transactions; get answers to questions online, and supply information needed by HMRC without using snail mail or phone calls; access cross-border information where needed, and interact digitally with HMRC. According to David Gauke, all this should give you more control over your tax affairs and more flexibility in how you manage them.

What it Means for Individuals

As a personal self-assessment tax payer, you will be able to receive correspondence from HMRC online at your account, and carry out many more transactions. The government announcement reports that the services will include updating your personal details and reporting changes in circumstances and extra sources of income; accessing your tax codes and how they were arrived at; dealing with the important issue of repayments yourself at your convenience. When retirement is looming, you will also be given access to targeted online support.

The HMRC View

The online services currently available have proved increasingly popular. Over 82% of self–assessment taxes were filed and paid online in January 2013, with much of the filing performed by outsourced bookkeepers.

The new service should do much to alleviate criticism about the time it currently takes to receive a response to telephone queries with HMRC. The Chief Executive of HMRC, Lin Homer, is delighted to have secured the investment to transform the current digital services, saying that her department is, “committed to doing business with our customers in the way they want to do it.”