Remember your partner and kids? Chances are that if you run your own business, you don’t see as much of them as you’d like – or should.
Finding the right work-life balance is crucial for small business owners. The Mental Health Foundation calls the growing demands of work “perhaps the biggest and most pressing challenge to the mental health of the general population”.
Smartphones and tablets might help us keep in touch when we’re on the move during the working day, but unless we are strict with ourselves, they can extend our working week into 24/7 and intrude into our holidays.
When I set my accountancy business Altus up, I was determined I would not be one of the many business owners who blurred the lines between work and home. So the mobile phone is switched off at evenings and weekends, and I will respond to any messages as soon as I can next day. Of course there will be times when you need to work that bit longer to meet deadlines, but unless you are a brain surgeon on call, the chances are that whatever issues arise outside office hours will not be a matter of life and death.
Busy-ness doesn’t equal success
Working long hours and at weekends can become a habit and we need to stop and ask ourselves if it is necessary, or do we do it because we feel we should? Being busy is not a barometer of how successful we are or how well our business is doing. The order book and P&L account will tell us that. It may have much more to say about our effectiveness.
It’s essential to honestly analyse your time – do you actually know what you have spent your time on? Spend a week faithfully noting down what you do and for how long – it may give you a shock.
There’s an old and true saying that sales are vanity, profit is sanity but cash is king. Are you spending your time chasing sales, running quicker and quicker to keep up, when it is profit you should be focusing on?
If you cannot get everything done in a usual working week, it can point to one of three things:
You are trying to do too much yourself
You are not working efficiently
There is something fundamentally wrong with your business model
Remember the 3 Ds – delegate, dump, do. When you have analysed what you are doing, identify the things you have to do.
Learn to step back
In my experience many business owners are by their nature control freaks – you have to learn to accept that someone else will not do it quite the way you would, but their way is not necessarily wrong. Do you think Richard Branson does his own payroll?
The age-old excuse is that ‘I can’t afford to pay someone to do it’ – no wonder when you are spending all your time doing ineffective, unnecessary things. Spend that time making profit and you will have plenty of cash!
I was delighted recently when one of my clients said that thanks to Altus, he was now able to spend more time with his family, doing the things he loved.
A good accountant should be someone who wants to support your business throughout the year, providing services that leave you free to focuson what you do best.
Having worked in companies of varying sizes, and building up my own business from scratch, I know the pull to put in long hours, but it should never become the norm. At Altus we work with businesses to provide the services that they don’t have the time or expertise for, and I can also act as a ‘critical friend’, advising clients on how to be more effective.
1st April sees what could be a significant change to the flat rate VAT scheme. It’s targeting what are being termed ‘limited cost traders’ – businesses where purchases of ‘goods’ are low. These are likely to be sole director/employee businesses, and in particular contractors providing services.
Small businesses can currently benefit from the ability to base their VAT liability, and therefore the amount of VAT they reclaim on purchases, on a fixed percentage depending on the nature of their business.
For many very small businesses this has meant a really quick and simple way to handle VAT and has seen some paying over less VAT than would have been the case under standard VAT accounting.
Changes were first mooted in the Autumn Statement, and we have been waiting to see the details before knowing how it would affect businesses. These details were finally revealed at the end of February.
The flat rate scheme remains in place but from 1st April a new higher rate (16.5%) is applicable to any business that is deemed to be a ‘limited cost trader’. The impact of this will be that for many the VAT flat rate scheme will no longer be beneficial.
You will be classed as a limited cost trader unless you have ‘goods’ in each VAT quarter of more than 2% of turnover (both calculated including VAT). You will also have to check each and every quarter whether this applies.
Goods are being defined as ‘moveable items or materials exclusively used in your business’. Critically for suppliers of services they do not include travel expenses, fuel, vehicle costs, telephone, rent, accountancy fees, training, memberships and also office equipment, computers and phones. This is not an exhaustive list, but you get the picture.
Clearly this excludes the vast majority of costs which many service businesses incur.
The options for a business caught by this change are:
1.Continue with the flat rate scheme and apply the new higher percentage, which may not be beneficial
2.If you are below the £83k VAT registration threshold then you could deregister for VAT
3.Change over to standard accounting or cash accounting methods
The best option will vary on a business by business basis. If you are, or think you may be, affected by these changes, then please do get in touch, and we will be happy to talk it through with you.
We are very excited to announce a new addition to the team here at Altus. Carol Phillips ACMA is a fully qualified Chartered Management Accountant who has had 10 years’ experience in industry.
Carol specialises in delivering accurate and up-to-date management accounts, financial information and working closely with businesses to develop and improve their internal processes.
She brings her extensive experience to our existing clients and will also be seeking to expand and develop our client base, particularly focusing on those who need management accounts and developing and driving process change.
She will be working either on-site, off-site or a combination of both depending on client needs.
This is a significant step for us as we look to develop this part of our business and we are delighted to welcome Carol to Altus.
HMRC has updated some of its advisory fuel rates with effect from 1 March 2017. The changes affect petrol and LPG cars with engine sizes over 2,000cc.
The advisory fuel rate (AFR) is mainly of use:
Where an employee personally pays for fuel used in their company car or van and claims reimbursement from their employer for business mileage.
Where the business pays for all fuel, eg via a company fuel card or account at a petrol station, and requires the employee to reimburse it for the cost of their non-business mileage.
Using the AFR means a company doesn’t need to work out the actual cost of fuel per mile for each of its company vehicles. It can reimburse its employees safe in the knowledge that HMRC will accept that the payment doesn’t trigger a benefit in kind charge.
You can use the old rates for up to one month after the new rates apply.
Hybrid cars are treated as either petrol or diesel, according to the engine.
The table below shows the new rates that apply from 1 March with the previous rate in brackets where there is a change.
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.