Is cloud bookkeeping right for you?


Cloud bookkeeping – it’s the sexy new kid on the accountancy block.

Put simply, it uses a secure website to store your records rather than your local server or PC. Of course there are pros and cons to this. First the good news:

  • You can get at the information wherever you are provided you have internet.
  • You can therefore review and input data any time, any place.
  • It’s backed up for you so you needn’t worry about data loss should your systems crash.
  • Having someone else do your bookkeeping remotely – such as your accountant – is a realistic and sensible option. You can still access the info at any time while the work is expertly and promptly done by people who know what they are doing, freeing you up to run your business.
  • Unlike traditional methods of outsourcing bookkeeping, eg taking your books to your accountant, you retain close contact with the info.

And now the bad:

  • You need decent broadband.
  • You don’t know where your data is being stored, which may be a data protection issue for certain industries.
  • You don’t have control over backup or security.
  • It is slower to use, simply because of the data transfer issue. Every time you do anything it has to go to the cloud and back again. However good your broadband, that is always going to take longer than it going to your hard drive. At Altus we have found that dealing with large volumes of transactions is a slow process.
  • Unless you are disciplined, you may find yourself taking your work home with you. It would be easy to sit in bed at night doing your bookkeeping, for instance. And that isn’t a good thing.

But truth to tell the whole cloud bookkeeping thing is a bit of a red herring, a distraction from the real issue. Which is, your records will only ever be as good as you are at keeping them up to date. Wherever they are.

Moving over to cloud bookkeeping will not help if everything is three months out of date. It might just as well be sitting in a plastic bag in the corner of the office.

So before you get your head in the clouds, put your feet firmly on the ground. Do you keep your records up to date? Then moving to a cloud-based system may work for you. If you don’t, then that is the first issue you need to sort. To manage your business, you have to know exactly where you are in real time, not where you were last time you did your books!

At Altus we provide full bookkeeping services, including a choice of cloud-based systems. We are always happy to advise.

Employed or self-employed: that is the question


Within the space of a couple of weeks I have been asked by three different clients if I could explain what defines a person as being self-employed.

There was a time not so long ago that I would have confidently answered, quoting the ‘7 badges of trade’ definition. These days it’s a lot less clear, and I’m not the only one who thinks so. High profile court rulings over plumbers from Pimlico and Uber taxi drivers have left everyone advising on employment status and tax implications scratching their heads. The ‘gig economy’, zero hours contracts and the like have greatly muddied the waters and the result will likely affect anyone not on a straightforward employment contract.

So are the days of the self-employed numbered?

Matthew Taylor, who is heading the Government’s enquiry into the way millions of people work, says there is evidence some firms are using self-employment rules to avoid paying tax. What, really? You have to wonder how in touch they are with the real world if they’ve only just woken up to this.

The Treasury’s take has undoubtedly fallen with the rise in ‘self-employment’, the problem being:

·        The worker pays less tax – the Institute of Fiscal Studies says employed people pay an effective tax rate of 31% compared to 22% for the self-employed, who pay less NI and can also offset certain expenses (although I don’t know where they have got these figures from)

·        Businesses make no NI contributions on those classed as self-employed

Chancellor Philip Hammond is understandably concerned about the issue and is widely expected to announce tax reforms, balancing the treatment electrician-1080554of employed and self-employed people. This could happen as early as the Budget on 8 March. We have already seen a HMRC drive against personal service companies, such as those that are commonplace in the NHS, public services and media. The gig economy and growing number of self-employed must be in their sights.

On the flipside, it has created more flexibility in the economy which some will argue is a good thing. Small businesses in particular see the costs and risks of employing someone as too high, with a fear that they will not be able to get rid of them if the work dries up, they can’t afford them – or they are just not up to the job. The ability to use someone when you need them, with no ongoing commitment (on either side) is far more appealing.

Until we have more clarity – and that needs to come now from the taxman rather than judges – then it is sensible to stick to the traditional measures of employment when deciding whether you, or someone working for you, is employed or not. We are happy to discuss your particular situation in more depth; just click on the link