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Free Profit Improvement Software

Every business needs to think and act strategically, including Sackmans.

One of my target markets is start-ups and small businesses that want to grow. I feel this segment of the market deserved a separate brand, so I have created Ten Accountants. The names suggest “perfect” as in the Dudley Moore film.

I know there is no such thing as perfect but I think it’s a worthwhile direction.

I’m working with other accountants on this and our aim is to create the perfect business development system; a guaranteed way to launch a successful small business.

One of the things we are doing is building business management software. This will help you manage the business, projects and people – including yourself. This software (if sold separately) would start at £50 plus a month for three users. But, the value is far more that £600 – what would 20% or 30% growth every years be worth other the next 5-10 years?

That software will be available in a few months. In the meantime you can use Profit Improver. This is a system that will help you figure out how to improve your profits. You can look at the impact of relatively small improvement to your key drivers over the next five years.

If you are interested in a service which is more focussed on business development and growth then maybe Ten Accountants would suit you better than Sackmans.

We use Xero Accounting software with all clients because of the budgeting feature. This allows you to set and report against targets.

Get in touch if you’d like to know more.



Direct access to Barristers

Many small business owners are not aware that the law changed in 2004 to allow them direct access to a Barrister.

The benefits of using a Barrister include getting specialist advice before significant legal fees are incurred. Barristers have a deep understanding of the law and the rules of the courts, from frequent appearances in courts. They are experts at legal strategy and dispute resolution, whether in a court or mediation setting.

You can also use a Barrister as a second opinion (to check you are getting best advice) and/or as part of your negotiation.

Not all Barristers are qualified and able to give direct access. However, there a several thousand qualified for direct access and the Bar Council operates a Website where you can find a specialist in the field you need and who is local

The majority of Barristers are self-employed and share the cost of premises, which are called Chambers. This means costs are affordable and allow expert advice on topics such as:

  • Employment disputes
  • Copyright and trade mark
  • Business leases
  • Debt recovery


If costs are an issue it can be possible to arrange finance for legal costs

5 ways to cut costs

At Sackmans we prefer to focus on increasing the profit by increasing the top line. But, cutting costs will increase the bottom line so here are five ways to cut costs.

1. Energy

One cost to look at is energy. According to the Department of Energy and Climate change estimates small businesses can save between 18% and 25%. Simple ways include:

  • Energy saving lightbulbs
  • Timer switches and sensors
  • Draught exclusion and insulation
  • Double glazing


But, there are other opportunities including reducing the office temperature by 1 degree which could reduce costs by 10%.

2. Manage cashflow

Avoid overdraft fees, interest and fines by having a heathy cash balance.

One way to collect money fast is to no give credit. The value of credit is the interest on your invoice for 30 or 60 days which is likely to only be a few pence. If you have a positive cash balance you can also take advantage of prompt payment discounts and negotiate harder with suppliers.

If customers are paying late consider charging 8% onto the base rate and charge a fixed fee of £40, £70 or £100, depending on the size of the balance.

3. Embrace technology

Leading global consultancy business estimates small businesses could increase productivity by 10%.

One example is using online technology like Xero to streamline your accounting function. Other initiatives include:

  • Email newsletters rather than printed newsletters
  • Using Skype rather than the phone or mobile
  • Switching to VoIP services for telephones


4. Employ great people

Employing the wrong people will cost your business a small fortune.

To do this make sure you share your vision for the business and employ people based on values. Remember, you can train skills – it’s much harder to develop the right attitude.

Use business, project and personal Key Performance Indicators to drive productivity and develop a winning team.

5. Outsource

Consider outsourcing activities that you are not excellent at or could be done cheaper by a supplier.

Sackmans could take care of your bookkeeping saving you the hassle of finding and managing a bookkeeper.

Perhaps it would be better for you to outsource elements of your marketing. If you are an ecommerce company could you have stock stored and distributed by Amazon? In time your business premises may reduce in size or disappear altogether.

Xero update

As Xero approaches 600,000 users worldwide, here are some notes on recent developments at Xero to help you improve your business results in 2016:

  • Partner of month for December 2015 was Crunch Boards which enables forecasting and reporting
  • The new + icon and search facility saves clicks and time
  • Improved Fixed Assets
  • Cashflow report helps businesses understand money flowing in and out of their business
  • Two step authentication increases security
  • Automatic invoice reminders prompt customers to pay so you don’t have to
  • Billable expenses make it easy to pass on costs to customers
  • Xero on Apple Watch updates you when your bank accounts change


The Xero eco-system continues to grow wand more industry specific add-ons. At the end of last year a property management system called Arthur was added.

Our support of Xero includes a 50 point Xero training programme to ensure you use the system like a pro. We can also you develop a Financial Policy for your business to ensure you have complete control and by using LivePlan we can help you improve your numbers.

Taxing the sharing economy

The sharing economy began to appear in the early 2000s as people looked for extra cash driven by the impact of the recession.

This new economy (worth an estimated £15n) has been on the radar of the tax office (HMRC) for a while. A consultation document issued by HMRC with the title “Tackling the hidden economy: Extension of data gathering powers” is a clear warning for 2016 onwards for everyone to ensure they declare income from places like AirBNB.

HMRC plan to collect data from third parties and estimates it will raise £285m by the end of 2021. Companies like Apple, PayPal, Amazon, AirBNB and Etsy are high on the target list.

The law supports HMRC. The Finance Act 2013 section 228 gave new powers to HMRC collect data from businesses that process credit and debit card transactions. These powers will now be broadened to data held by electronic payment providers (not necessarily in relation to credit and debit cards), and business intermediaries. Intermediaries are businesses/Websites that allow customers to place orders, buy or reserve goods, services and/or digital products.

According to the ACA, a leading professional body in the accounting world, HMRC are under extreme pressure to increase the tax take. They will turn up armed with data and look to penalise you if they think you are withholding information.

As we move to online reporting the tax net is drawing closer. If you’d like any help dealing with these matters get in touch and remember, our fees are usually tax allowable.

Quarterly reporting for the self employed

The Chancellors recent announcement revealed a little more about the new Digital Tax Account. It looks as if the self-employed will need to report their figures and pay tax quarterly.

More details will be revealed early next year but this could force most self employed on to the cash accounting rules. This is a simplified option for self employed to complete their tax return where tax is paid on the difference between Money In and Money Out with the option of flat rate expenses.

If a self employed person doesn’t opt for cash accounting they will need to complete full business accounts using standard accounting rules.

The key will be using software to make life easier and Sackmans will be keeping a close eye on developments.

Compulsory Pensions

The law on pensions has changed dramatically in 2012. Between then and 2018 every employer must:

  • Have a pension scheme
  • Automatically enrol eligible* employees
  • Contribute towards the scheme


*A worker is eligible if they are between 22 and the State Pension age, earn more than £10,000, have a contract of employment and work in the UK.

The new rules do not apply to owner directors and their spouses, unless they have a signed contract of employment. Even though it is not compulsory, you may want to consider setting up your own scheme because contributions from your company are tax deductible.

There are a number of options.

Work with an Independent Financial Advisor. This is likely to be the quickest and easiest option but also the most expensive. Expect to pay £2,000+.

The Pensions Regulator has published a step-by-step guide click here. We found a free online service option for employers at There are charges for employees and I do not believe there is any advice built into the system.

Another online option, which does include built-in advice from a registered Independent Financial, is At the time of writing the price is £435 plus VAT.

If you would like to talk about this or want an introduction to an Independent Financial Advisor get in touch.


Coffee and Xero

Xero customer David Abrahamovitch, owner of The Grind Company in London talks with LBC’s Clive Bull about how to vision, culture and keeping tabs on each part of the business

Food strategy

According to research by the Skipton Building Society the typical UK family now spends £5,077 on food a year, £423 a month.

There is definitely an opportunity to save money on food. Not just by buying less but by changing what you eat.

If you are serious about implementing a radical retirement plan then it’s time to look at food in a new way…break it down into calories and shop to a budget.

With three meals a day, that works out to be 91 meals a month each.  If the average person needs 2,000 calories per day so you need to each meal to have 667 calories.

Can this be done for £2, £1 or even 75p a meal? Yes, but you will probably need eat differently and less.

If you could hit the 75p a meal then your monthly food bill would be £274 a month for four. How much of a saving would that be for you? Every £150 a month off the food bill over 10 years is worth £23,292, compared to paying down your mortgage or saving is a plan than returns 5%.

Look to get your calories in non-expensive foods. And, look to shop in low cost shops and buy shop brands.

Take inspiration from around the world. People in India know that great food is all about preparation and spices, rather than costly ingredients, the same for Chinese and Thai food.

Needless to say, no more takeaways!

Tax Efficient Investment

As Accountants North London I think Premium Bonds should be on the list of potential savings plans.

What triggered this post is that from 1st June 2014 the amount you can hold in Premium Bonds has increased by 33% to £40,000. And, the limit is set to increase further to £50,000 from 1st April 2015.

Premium Bonds are offered by NS&I (National Savings and Investments) which is an executive agency of the Chancellor of the Exchequer.

The bonds do not pay any interest; instead they offer tax free winnings on monthly draws. The prize fund is split into three value bands – higher, medium and lower. A percentage of the fund is allocated to each band.

The jackpot is £1m and from 1st August 2014 there will be two winners. The chance of winning between £25 and £1m is 26,000 to one.

With interest rates on investments being so low, and two jackpot prizes a month from 1st August 2014, it can be argued that now is a good time to hold Premium Bonds. If not for you personally, then perhaps you could start savings for your children or grandchildren.

You can check if you have one on the Website or by downloading the Prize Checker App. There is no lock-in, minimum/notice period or fees/penalties. You can cash in online, by phone or by post.

One thing worth noting is that Premium Bonds count towards the value of your estate for Inheritance Tax purposes.

Disclaimer – Sackmans is not regulated to give investment advice. This article focusses on the tax benefits of Premium Bonds.