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Archive for January, 2015

How can performance indicators help?

A Performance Indicator is a measurement of some aspect of your business. Obvious ones include sales, profit and return on investment.

However, these are financial indicators and are the results of other areas of the business working well. For example, you will not make sales and profit if sales and marketing is not effective.

A Key Performance Indicator (KPI) is a measurement of a very important part of your business that will help you achieve your goals and targets. This could be the number of referrals you get or your Website Google ranking.

Identifying your KPIs is a process that can help you focus on the 3-5 things that really make a difference. For example, referrals come from happy customers are very important for an accountant.

However, measing the number of referrals will not increase them, just like weighing yourself will not help you lose weight.

Happy customers come from a great experience, so think carefully and design a customer experience that is designed to delight people. At Sackmans we do this by hand holding people through the Xero training process.

What can you do to create happy customers and referrals?

The second way KPIs can help you is by sharing them with employees. If employees know what’s important (and why) they will be more likely to go the extra mile. You can even reward people for doing well on key activities, even if you just take a moment to say “well done”.

The third way of using KPIs is to manage people with personal KPIs which can also sharing them in open meetings!

With all KPIs set targets and have celebrate success and manage under performance.

What happens if?

It is so easy for us all to be caught up living for today and hoping tomorrow will take care of its self.

However, for the sake of loved ones we should all set aside some time to consider the impact of becoming seriously ill, incapacitated or dying in an accident.

Yes, it is possible to take out life insurance to cover loss of earnings but what about the business, employees and customers? Insurance will not cover everything, only planning will.

One option is to enable the business to continue by creating a management team which can include:

  • Family
  • Close friend
  • Key employees
  • Accountant
  • Your business coach

 

But, if the business cannot survive without you then are there things you can do to maximise the business value for you, or your estate.

This could be called your “disaster plan” which couple be lining up a competitor to buy your business. Whatever the plan is you will know in advance that the people involved in the plan are happy.

One thing many people overlook is a lasting power of attorney. This is someone who will act on your behalf if you are alive but unable to make decisions for yourself.  Someone you trust can take over until well enough to take control again.

Mini One Stop Shop

Over recent years there has been lots of VAT lost from digital services supplied to non-businesses because companies set-up and operated from low or no VAT rate countries.

The services include broadcasting, telecommunications and e-services from businesses, including the self-employed.

Up until 1st January 2015 the sales were deemed to take taken place where the suppler was based. But, now the sale is treated as being made where the customer is based.

So, if you sell a digital product in France you have to add French VAT and pay this to the French government.

This could be a nightmare if you sell in lots of countries. So, to save you registering for VAT in other countries you can register for the Mini One Stop Shop (MOSS). The only downside is that you need to be registered for VAT in the UK.

This causes a problem for non-VAT registered businesses because you could then have to charge VAT on all your sales. However, the VAT office have updated their guidance and if you turnover less than the VAT threshold, you do not need to charge VAT on UK sales.

However, you will be able to reclaim VAT on European sales and complete VAT returns but this could be as simple and entering zero everywhere.

Xero update

Here is a quick summary of recent improvements to Xero Accounting Software.

All new clients now get offered Xero because we believe it is the best system on the planet. If you are not yet using it let me know and I can arrange a demonstration.

These are:

  • New dashboard
  • Purchase Orders
  • IPhone App
  • Quotes

 

The Xero dashboard shows the most important information where you need it. You can know what is going on in your business at a glance. This includes:

  • Check your bank balances
  • See the money due in and out
  • Key accounts

 

The Xero dashboard allows you to organise the dashboard as you want it by dragging and dropping the graphs.

Later, Xero will release the Business Performance Dashboard with a choice of financial ratios and performance indicators.

Purchase Orders (PO) enable you to have complete control over expenses. Before a suppler is authorises to send an invoice they must get a PO.

Next is Receipts for iOS to help with expenses.

The App means you can easily enter business and personal expense claims when they happen, where they happen. No more sorting through lots of little receipts in the office.

Quotes help to win work.

It’s important to turn quotes around quickly and follow up on quotes to maximise your sales.

With Xero you can customise, create professional reports and send them on the spot. You can use “Estimates” if you prefer and include an expiry date.

You can copy existing quotes and easily turn a quote into an invoice with just a few clicks which customers can pay online.

As with everything in Xero, the user experience is beautiful. Down the line Xero will release the ability for prospects and customers to accept quotes online.