Getting Back on Track After the Floods

 

It wasn’t the best start to the New Year for many people. The bad weather had caused misery over Christmas and continued since. The environment agency published advice to businesses but even their recommended protection procedures did not save many small entities.

 

Storms affected many small businesses in the south of England. Many have been flooded out, losing stock and trade, with premises and equipment needing repair or replacement. Insurance claims take time and not much can be done in the meantime without cash to get things going. Others have simply taken a hit because no one was inclined, or was able, to venture out to buy or do business.

 

Bank Help Offered to All

 

If you have suffered setbacks because of the recent horrendous storms, you could get some financial help for your recovery. NatWest and the Royal Bank of Scotland (RBS) have set up a fund of £250 million – the UK Storm Business Fund – so they can offer loans that will be interest free for three months to businesses that have been adversely affected, whether or not they are already customers. The loans will be awarded on a first come first served basis. You just have to have a reasonable credit rating and be over 18 to qualify. Call 0800 529 8544 to request their help.

 

Bank Help for Customers

 

If you are already a NatWest or RBS customer, you may be able to get other temporary benefits, because the bank is relaxing requirements in a number of areas as an emergency measure. You might be allowed a temporary overdraft increase or credit card limit extension. Early withdrawal fees and termination costs could be waived if you want to access money held in an account where these would normally be applicable. You could even be given a holiday on your current small business loan. It‘s worth having a discussion with your bookkeepers about which options would be most advantageous for you.

 

Chris Sullivan is CEO Corporate Bank for NatWest and RBS. He said: “Many firms will have taken a real hit to their livelihoods as a result of this prolonged period of adverse weather. The loss of trade or damage to stock from such a storm can mean businesses find themselves in financial trouble…It’s important to the local economy and communities to get these businesses operational again.”

 

Your outsourced bookkeepers may know of other businesses that have suffered, and how they are coping. There may be helpful local schemes they are aware of, so keep on talking to them and to others in your local community. You may be able to help each other.

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.