Can you Cope with a Rise in Interest Rates?

Next year, the Bank of England is expected to begin to lift the base rate of interest from its all-time low of 0.5%. It’s going to have quite an impact on the finances of the nation. While savers will welcome it, borrowers will be hit with a rise in repayments. Businesses will mostly sit in the latter camp.

According to a survey carried out for the financial risk management firm, Company Watch, over a quarter of the UK businesses in its 500 strong sample have not even thought about planning for it. Your outsourced bookkeepers will have noted what the others are expecting and what they plan to do about it.

What the First Rise Might Be

It seems that some people believe the rise could be as much as 0.75% and are adjusting their financial business panning accordingly. Others are preparing for a 0.5% rise while an equal number think they only have to plan for a 0.25% rise.

How Can the Extra Costs Be Accommodated

How they will address the added pressures on their finances also varies. While some said they would try to get a better deal with a different lender if their bank debt payments start to spiral, a much larger percentage say they are already discussing terms to lock-in their current debt arrangements. Half of those trying to plan for these eventualities intend to increase sales and generate more revenue that way. A third will be looking at how to cut other costs, but only 3% said they would pass on the extra costs to their customers.

The Knock-on Effects

Emma Caister is Strategy & Business Development Director at Company Watch. She said, “Clearly with many companies in the Company Watch survey still feeling the effects of the long recession, even a small increase in debt costs might end up having a big impact on the strength of their businesses. We believe it’s sensible for companies to understand not only what higher interest rates might do to their own businesses, but also to examine what the impact might be on the financial health of their main suppliers and customers.”

Even if you don’t have bank debt that will be affected, people you do business with might, and there are plenty of angles connected with the probably interest rate rise that need to be considered. Your outsourced bookkeepers could be the best source of advice, support and inspiration for how to keep your business on an even keel when the Bank of England raises the base rate.

Could Cloud Computing Benefit your Business?

If you are already a fan of cloud computing, you’ll know all about the benefits for businesses that have embraced it. Many business owners though are still cautious about using it because of the problems that have been associated with it in the past, and because of some of the cyber-crime stories that are still around.

What they may not realise is that providers of cloud computing services are technical experts who employ all the state of the art techniques to keep their private servers and their customers’ data ultra-secure. In fact they claim, with some justification in the opinion of many bookkeepers, that your data is more secure in the cloud than when it is just kept on a PC or mobile device that is connected to the internet without these up to the minute security barriers.

The Easiest Back up and Disaster Recovery Facility

There are a number of ways to use the cloud. You might just want to have a secure backup facility that means everything is automatically backed up at regular intervals and is readily accessible to you if you need it. It’s so much easier than having to use some kind of external hard drive, making your back up yet another task for each day.

If everything is saved in the cloud, you’ll never have to worry about your data being lost in a fire or other catastrophe. Everyone hopes and expects that this will never happen, but if it did, you could concentrate on the myriad other things to be dealt with, confident that at least your data is safe.

The Hosted Desktop

Some entrepreneurs go the whole hog and commission a hosted desktop service, in which they operate in the cloud pretty much all the time. Their systems are hosted on secure servers at a data centre and can be accessed on any PC or mobile device that is authorised. They don’t have to upgrade their hardware to accommodate new versions of software or make more space available. Their software is upgraded for them as and when new versions become available. All the technical support needed is supplied by the service provider for a monthly fee which covers the software licences and upgrades.

Budgeting and financial planning becomes much simpler. That’s why accountants and bookkeepers usually find the concept interesting. If you are wondering whether you could benefit from turning to the cloud, why not discuss the pros and cons with your outsourced bookkeepers and see what they think.

New Flexible Working Rules Explained

On Monday 30 June 2014, new regulations came into force regarding flexible working hours. Now all employees who have been with you for at least 26 weeks can request flexibility in the hours they work. Previously only parents or other carers could expect this to be considered and granted. Now this category of employee no longer has to be given priority as every request must be considered on its merits.

You Don’t Have to Agree

Clearly, allowing this will be more difficult for entrepreneurs with small businesses and therefore fewer staff and resources. But you must give all such requests reasonable consideration, and you can only deny them for valid business reasons. These might be that there won’t be enough work to do through the proposed new hours of work, while you won’t be able to meet customer demand outside those hours. You can’t get the work covered by your current staff, and you can’t recruit more staff because you can’t afford it. Work performance and overall business performance will suffer.

If you really can’t allow flexible working, you are less likely to attract the best people, so it will be worth making what efforts you can to accommodate requests. Perhaps your outsourced bookkeepers can help if you discuss your needs with them.

Jo Swinson, the business minister, has said, "Firms that embrace flexible working are more likely to attract and retain the best talent and reap the benefits of a more motivated workforce. Employees will benefit from being able to balance work with other commitments in their lives. It also helps drive a cultural shift where flexible working becomes the norm."

Flexible Working Versus Flexitime

Flexitime has been operating, mostly in large companies, for a number of years. This is where everyone has to work in set core hours and can make up their specified work time at their convenience. It is different to the current concept of flexible working, which can mean working at home or in places other than the business premises, as well as being able to work outside the standard hours or on certain days of the week.

Employees will appreciate not having to travel to work every day of the week, or being able to start earlier or later than normal. Directors and managers will have to find ways to make it work wherever possible. Outsourcing some further aspects of back office work could be the answer for some, and outsourced bookkeepers may be happy to undertake this.