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Archive for March, 2015

Are you lacking digital skills?

2014 saw the 25th anniversary Tim Berners Lee’s World Wide Web, and with 2.4 billion users across the globe, it is still growing every day.

The 2015 UK Digital Index released this week by Lloyds Bank shows that now 77% of small and medium sized enterprises have basic digital skills[1] partly due to increasing accessibility; getting online is easier now that ever.

Technological advances have made it much easier to get an affordably, high quality tablet or smartphone on the high street, which will allow you to connect your database of business files to the internet, using cloud based technologies. You have access to Skype, to conduct business meetings remotely, and you can connect with your target market and monitor trends through social media platforms.

The Business Digital Index describes the future of these schemes, “Go ON UK will extend its network to a wider group of partners from all sectors, coordinating a nationwide effort to reduce digital exclusion.

Government will support this role and, together with public, private and VCSE (Voluntary, Community and Social Enterprise) partners, will sign up to the UK’s Digital Inclusion Charter and actively support each local programme.”[2]

There is a focus on the community, and on establishing networks of start-ups and small business locally that will benefit individuals, highlighting area for improvement in digital capability and putting into place steps to achieve goals in getting your business online. “Saving time is a key benefit to organisations who adopt digital, but those who are less digital are missing out through reluctance to appreciate the benefit or invest the time to gain the longer term efficiencies.”[3]

Once you have developed core skills in becoming digitally literate, your opportunities expand and you will be able to negotiate the World Wide Web to save you time and allow you to focus on other parts of the business.

However, with all the successes of the last 25 years, there are still more than 1 million people who lack the skills and confidence to get their business online. The success of regional schemes such as Go ON UK, a partnership organisation that offers advice, online forums, community groups and events has inspired a new push for digital inclusion nationally in business. The resources on the website cater for every size of team, allowing you to pinpoint the tools and informations most useful to you and your business. This network of support exists to highlight the benefits of being online.

Other schemes include BT’s Get IT Together campaign, which works with those who have not had access to the internet. Their advice is tailored to individual needs, with informations and skills training through Citizen’s Advice to give all many people as possible new opportunities to use the internet. The guide to getting online can be downloaded and printed off, allowing you to take in the internet at your own speed. The programme also offers support in online safety to make sure you protect your personal details.

Government run schemes such as The Business Exchange offer a platform for linking startups and large corporations. “By making it easier for the small business community to understand and take advantage of the range of pledges on offer from big businesses, this site will open up a whole new world of opportunity to british entrepreneurs.”[4]  These pledges can include financial support and investment or guidance and assistance in how to grow your business.

The internet is a tool for you to use to your advantage in which ever ways is most suited to your business. These schemes allow you to see the potential for building your business online and give you the motivation to look into the future of the possibilities for growth. Even if you only choose to host your business profile online so that customers and find you easily and contact you hassle-free, it will have a huge impact on your business. This wealth of knowledge at your fingertips means that you can see what everyone else is doing, monitoring the market to adapt your own products and services to stay on top. Connecting with community business networks can offer advice and services of local people that will save you time and money later on.

The internet will continue to grow. New developments in conducting business online are opening up opportunities and new platforms for trade are emerging. It is an exciting time to be in business and as much as you need the internet, it also needs you. Without new, interesting ideas the world of online

Can you trust your bookkeeper?

I came across a story of an estate agency that nearly went bust after having almost £2m stolen by the bookkeeper over a period of five years.

From reading the newspaper report, the fraud was not spotted by the accountant because the bookkeeper forged emails from the bank to inflate the bank balances.

Here is a list of warning signs:

Lifestyle – worry if your bookkeeper drives a better car than you and enjoy luxury holidays. Yes, they may have a spouse or partner who earns lots of money, or they may have benefited from an inheritance but perhaps your business are paying their bills.

Missing paperwork – be suspicious if paperwork always seems to be missing and misfiled and only your bookkeeper can find it.

Increased responsibility – be cautious if your bookkeeper volunteers or pushes to accept great responsibility (and control) with accounting matters.

Management accounts – be a little concerned if your bookkeeper should not necessarily produce your management accounts. It is easier for them to cover up their fraud.

Control – alarm bells can start tinkling if you bookkeeper wants control of all finance matters from invoicing to credit control and banking.

No holidays – be wary if your bookkeeper never has a holiday or insists no no-one doing the books while they are away.

Vices – be very concerned if your bookkeeper shows signs of heavy drinking or gambling.

Confusion – be concerned if the numbers don’t make sense. If you think you are making more profit than the accounts show dig and dig until you find an answer.

One thing you can consider doing is paying Sackmans to complete a check of your bookkeeping one year. Another strategy is to build in some internal controls. Either way we can help.

Stock control for Xero

This month sees a big announcement from Xero with the release of improved Inventory.

Before the improvement you could really only use the Inventory feature in Xero to help you speed up issuing invoices. You could also use the Inventory feature to run reports of your various services and products, but you could not track what stock you hold.

The improvement means that you can now do all your stock control and accounting in Xero. This means you can check stock levels and know when to re-order. If you use Xero’s App for Google Android you can do that from your phone or tablet.

There are two types of inventory items; tracked and untracked. You can use untracked for things you don’t need to count such as services.

In the future there will be more Inventory reports and enhanced management such as archiving items, minimum re-order levels and stocking-taking.

Here is a video overview

The end of the tax system

The recent budget announcement that the annual tax return would be phased out by 2020 is potentially the biggest ever change in the tax system.

My opinion is that is all about reducing the National Debt and if implemented well this could:

  • Reduce the cost of collecting tax
  • Advance tax payments
  • Reduce unpaid tax

 

I actually think paying tax monthly could also end up be better for businesses. It would be less stressful than struggling to pay once or twice a year and could encourage a culture of everyone paying their invoices quicker.

Unfortunately, there is no detail to support the announcement but, I cannot see how this will work without a radical change in the tax law.

Without a change you will need to prepare monthly management accounts, so the tax office can calculate your tax. This would end up being far more expensive to run a business and make the UK less competitive and entrepreneurial. However, I have a theory that the government will simply tax for small businesses.

It could be that the introduction of optional cash accounting in 2014 would be made compulsory. If this happened you would pay tax on “cash” profits rather than “accounting” profits.

Your accounting software would send the money in/out data automatically to the tax office who would calculate your tax monthly, similar to how it works for PAYE now.

There would probably be a transitional calculation to prevent double taxation and hassle implementing the change. But, overall Sackmans welcomes the announcement because it means we will have time to help clients more valuable work.

Our focus is moving more towards helping you achieve financial freedom and you don’t need to wait for the tax system to change before we start working on this with you. Call for access to the E-Life Planner and start to work out what your business needs to give you for you to live the life you want.