Business Support in 2011

Have you used a Business Link adviser? From November this year, no-one will be able to do that. The government has decided to scrap that side of the business, retaining only a new Business Link website for online information.

A government document released this month recognises the importance to the economy of small businesses, but believes that the current method of delivering support through Business Link is not effective enough. It doesn't give enough value for the public money that pays for it.

Local Support

The paper states that “the best advice for business comes from other experienced business people”. So support will still be provided locally, but by volunteers instead of paid advisers. These will be accessed online through a “Mentoring Gateway” online.

National Telephone Contact Centre

Over 20% of small businesses are believed to operate without web access. Any who can't find what they need online, will be able to get help or find out how to get it on a national telephone number.

Encouraging New Businesses

A range of other measures are planned to encourage a greater proportion of the population to become self-employed, including a continuation of the National Enterprise Allowance (NEA) for unemployed people who come off benefits to start a business. They will also provide specific support for aspiring entrepreneurs leaving military service, women and people in minority ethnic groups. And they are liaising with social housing landlords to find ways to allow and assist new home-based businesses in their premises.

Encouraging Small Business Development

Established small businesses will be selected for the Business Coaching for Growth programme, to help them achieve their potential and their development ambitions.

What About Now?

So we know about the government's plans. But 2011 is an interim year in which little of this is in place, while current support systems are dropping away. It's more important than ever to use your outside bookkeepers to help you keep up with developments and keep your business on-track.

The Importance of Cash Flow Management

Hopefully you experienced a brisk trade in December. With the increase in sales, you could find that your cash flow differs during this month compared to any other time of the year. Stay on top of your December cash flow by making sure that you follow these tips:

Stick to a Budget

With the till ringing at an increased rate and takings looking higher than expected, it is easy to get carried away and spend more than you usually would. But this could be dangerous and should be avoided. Ideally you would have already planned for this prior to the Christmas rush by drawing up - with the help of your local bookkeeper - a Christmas budget. By forecasting an increase in sales, you could have funds set aside that you know you can spend on more stock or expanding products or services if needed.

Consider Extra Expenses

At Christmas, profits should increase. But many businesses find that expenses and outgoings can also shoot up almost without warning. Paying staff for overtime, throwing Christmas parties, lost days through adverse weather conditions, increased heating and electrical usage; it all adds up. Avoid facing an eye watering bill by employing an outsourced bookkeeper, ideally all year round, to regularly check up on expenditure so they can warn of or even forecast in advance any potential problems.

Effective Invoicing

One reason cash flow becomes a problem during December is as everyone is so busy, invoices are often sent out late and, as people take time off work for the holidays, payments can become delayed for several weeks after Christmas. Make sure that you or your bookkeeper sends out invoices effectively and on time.

Outsourced bookkeepers are skilled at managing all aspects of cash flow management. By leaving it to them, the burden is removed from your shoulders, leaving you free to drive up sales as best you can before, during and after Christmas.

Business Expenses Advice for Small Businesses

There are certain times of the year when business expense claims become more common. Christmas is one such time. But what can be claimed as an expense? Are there different types of expenses? Follow this guide and you should not go far wrong:

What are Non-Taxable Expenses?

A non taxable expense is something that you or an employee buys that is for business use only. Often known as allowable expenses, these can be deducted from your end of year tax bill. But working out what can be claimed as a non taxable expense can be difficult. As a rough rule, things such as travel costs for business purposes, general running costs such as electric and phone bills, as well as premises costs such as renting an office can be claimed back. This is however by no means an exhaustive list, and from time to time it may become difficult to know whether one thing or another could be claimed back as an expense.

The best idea is to invest in a professional bookkeeper so they can keep a detailed record of all expenses you accumulate throughout the year. This way you will have a tidy and comprehensive list to present to your accountant at the end of the tax year, and then they can work out what can be reclaimed or discarded.

What can’t I claim as Expenses?

The basic rule is that you cannot claim anything that is for personal use. This means that you cannot claim your phone bill as expenses if you have used it for personal reasons. You cannot claim travel expenses on your journey to or from work, but you can claim back expenses spent visiting clients for example. Again, it is best to check with a professional to make sure you have the right to claim back what you think you are due.

Do I need to Keep a Record?

It is very important that a detailed record of all of your expenses is kept throughout the year and that it is kept up to date at all times. Everything must be recorded along with receipts and the relevant documents that prove the expense was business related.

HMRC can be very strict so it is best to use an outsourced bookkeeper to keep all of these records for you. They will know how to collate and present your expenses in a professional way and will offer you advice on what you can or cannot claim.

Make Sure your Business Can Cope at Christmas

It doesn’t take a rocket scientist to tell you that Christmas is for most businesses, both large and small, the busiest time of the year. Taking advantage of all of this increased trade is vital and the perfect way to start the New Year on a strong financial footing. In fact many businesses rely heavily on doing a roaring trade in the build up to Christmas.

Coping with the increased demand is very important otherwise there could be some serious consequences and a lot of money could be lost. But how can you ensure the Christmas rush goes as smoothly as possible?

Increase the Number of Staff

Extra demand means more hands will be needed. Employing more staff is the most obvious way to make sure there are more hands on the pump as it were. But what if you cannot afford to employ another member of staff? If this is the case, then look at ways of delegating time consuming jobs to others. A popular option is to employ an outsourced bookkeeper and pass onto them all the accounts and payroll responsibilities for a month or two. This could free you up and allow you to spend more time generating cash.

Stay on Top of Cash Flow

There is no better feeling than receiving order after order as the countdown to Christmas begins. You send out items or sell them on the shop floor at such a rate that you are forced to order more and more stock. But be careful. Just because orders are up does not mean that you can necessarily afford to buy more stock than you usually would. Staff might be working longer hours and your payroll might therefore be more than it is during the rest of the year. Before you know it you have ordered too much stock that you cannot sell, as well as facing a large payroll bill.

Avoid this scenario at all costs. Use the help of a local bookkeeper to keep on top of your cash flow management system during the Christmas rush. With this taken care of, you can get on with other important tasks with the knowledge that no nasty surprises will be waiting for you in January.

Do not make any rushed decisions. Sometimes an outsourced bookkeeper who is separate from your company is the best person to entrust with your cash flow and pay roll duties when things get busy.

Prepare for the VAT Rise

As of January 4^th 2011, VAT will rise from 17.5% to 20%, bringing the UK in line with other major European nations such as France and Italy. Although businesses up and down the country will be bracing themselves for the effects to hit, what are you actually going to do to combat it? Has your business tweaked its plans and budget to help deal with the rise?

Most businesses might be wondering what this VAT increase will actually mean and what the options are. Consider the following ideas:

Let the Business Bear the Brunt

One option is to let your business shoulder the rise in VAT. By doing so, it is imperative that marketing and sales focus is increased so that the rise does not result in your business losing money. If you decide to take this option it is probably a good idea to contact a professional bookkeeper so they can go over your accounts and work out what level of sales increase is needed to cover the VAT rise.

Pass the Rise onto Customers

If it costs more to run your business as a result of increased VAT charges you may consider passing the rise onto your customers. Nobody likes to do this, especially if you have a number of loyal customers, but it may be necessary in the long run. You may be able to swallow the VAT rises for a year or two, but the pressure to do so year after year may be too much for many businesses. Management accounts are often the speciality of local bookkeepers so invest in their services to ensure all accounts are totally accurate throughout the year and that your business does not lose any profit made to tax at the end of the year.

There are contradictory claims in the business world presently as to what the best option is to take. Whatever you decide, remember to get your numbers and calculations right with the help of a bookkeeper. Do not underestimate the effect this rise could have on your business and your customers.

Avoid Staff Entitlement Confusion in Your Business

Whether a fresh recruit in a small family run business or the CEO of a large company, everyone needs time off for holidays as well as the occasional sick day. It is a right that you and your employees deserve and should use.

But if you run a small business, how do you know what your employees are entitled to? How do you pay somebody who is on maternity leave? What about sick pay – who qualifies and for how long? These are common questions that can be easily answered if you know who to turn to.

Holiday Rights

If you employ somebody who works full time, five days a week they are entitled to a minimum of 28 days holiday a year. But this is only the basic entitlement. For part time workers this needs to be calculated separately by taking into account how long they have been working for you and how many hours they work each week. It can take detailed knowledge of the rights of workers as well as a head for figures to calculate this.

A qualified bookkeeper will be geared up to help you in this area.

Sick Pay

Employees who are unable to work because of illness are entitled to Statutory Sick Pay. It is paid by the employer and can last for up to 28 weeks. Tthe standard rate of payment needs to be worked out and eligibility depends on the length of time the employment has lasted. The person who is sick needs to earn over £97 per week to qualify and must be ill for 4 days continuously before sickness payment can start.

According to small business experts, calculating statutory annual leave entitlements is a confusing area for most small business leaders. Remember that a local bookkeeper will be an expert in all matters relating to personnel and that it’s worth seeing what they can offer you in terms of outsourced assistance.

Shortage of Accounting Staff Affecting Small Businesses

Finding trained, qualified and reliable accounting staff is always difficult. No matter your sector, finding somebody perfect for a role that involves number crunching can be a real slog.

In fact, according to a survey of staffing in finance and accounting by recruiter Poolia, 38 per cent of employers have had problems finding the right person for the job in the past. This is worrying, especially as the survey also revealed that 30% of those interviewed were actually looking for an accounting or finance employee.

But why are accounting employees important and what should you do if you cannot find someone to fill the void?

The Problem: Payroll

Every business calls for some form of accounts or finance assistance; whether it’s to manage the payroll, take care of the bookkeeping or control the sales and purchase ledger.

Payroll

If you are struggling to complete the payroll every month you will need to employ someone who can. This could be an accounts manager who you employ to carry out this type of work. Alternatively, it often works out cheaper and more reliable to outsource this work to a local bookkeeper.

Cash Flow

Knowing how much money is coming in and going out is a vital part of any business. Fail to get a grasp of this and your business may not survive for as long as you envisioned. Ideally, you should have someone on board whose job it is to keep on top of income and expenditure so each month you know just where your business is and how healthy the accounts look.

Again, do not despair if you cannot hire a full time member of staff to take care of it. A local bookkeeper will have many years experience in doing this kind of work and can do so offsite on your behalf. Sometimes they even provide a special service for sole traders and owner managed businesses that have little time to do anything but work and earn money.

Look out for an outsourced bookkeeper if any of these problems are currently affecting your business. Remember that you are not alone – there are services out there that can help you.