10 Ideas to make your summer in business a success

July 16th, 2011

We are just over half way through 2011 and the summer (and hopefully good weather) is with us.  It can be easy to lose focus at this time of year as thoughts drift to holidays etc.  So at Accountancy Extra, we’ve created our top ten tips to making sure your summer is a resounding business success.

 Review your goals, targets & aspirations

 Take time out to take a look at why you do what it is that you do.  What do you want from your business? What do you want from life? Summer is a great time to review what you want to achieve.  For some reason the sunshine helps with clarity.

 Review your Products & Services

 When was the last time you looked closely at the products and services you supply to your customers? Are they still relevant in today’s changing marketplace? Are you delivering what your customers want in a way that they want?  Today’s marketplace is more demanding than ever, and it’s essential that you keep completely up to date with what those demands are.

 Get Rid of Nightmare Clients

 Now is the time to take a good look at your client list and get rid of those clients who are a nightmare to work with.  We’ve put together our own guide on nightmare clients, together with some top tips on how to avoid them here

 Focus the right type of clients

 As opposed to the nightmare clients, focus on getting hold of the clients you really want to work with.  Start by listing your top 10 existing clients and then write down why you love working with them.  After a while, you will see some common characteristics appearing across most or all of them.  Use these characteristics for identifying prospects and opportunities.  Why not create a list of the characteristics and share them with your team?

 Create a dashboard

 What are the key numbers in your business? I’m not talking here about just your profit and turnover (which are lagging indicators), but the key numbers that drive the success of your business – your profit drivers.  How do you measure and record them?  Having a visual dashboard really helps focus the mind – I’m not necessarily talking about a fancy software solution with dials etc. (although there are some really good ones), as a simple spreadsheet or wall board may give you all you need to know

 Get a marketing plan

 Don’t leave your marketing to chance – plan it.  Take a good look at what activities have been successful in the past and work out a plan to concentrate on those things going forward.  Ensure you think about your customers and what you can do to make you even more attractive to them.  Book time out of your diary to work on the marketing of your business.

 Invest in yourself & your team

 Motivating a team is one of the hardest tasks a business owner faces.  Take time to invest in the development of your team and the relationships within the team.  Perhaps take them on a development day, share with them the vision for the business or just take them out for a bit of fun!

 Understand what’s happening with your cash

 We all know that lack of cash is the number one reason small businesses go bust.  Make sure you are closely monitoring the cash position of your business.  Forecast ahead over the next 6-12 months and identify pinch points (including the payment of future tax liabilities).  Use our guide here for ideas on how to improve your cashflow

 Review the first half of the year

 Take a look at the successes you have already had this year and replicate them.  Similarly find the failures and stop them happening again.  Be proud of your achievements and celebrate your successes – you’ll feel great for doing so and there hasn’t been too much for small business owners to shout about this year so far!

 If you repeat this exercise in 6 months time, what would you like your biggest achievement to have been?

 Have some fun

 Take some time out, relax and have some fun.  It’s hard to run a small business and relaxation helps refocus your mind.  Turn off the email alerts on your smartphone and kick back once in a while – after all, you deserve it!

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8 Types Of Client To Avoid At All Costs

June 18th, 2011

No matter what industry you work in, you will meet both good and bad clients.  Of course, to make the absolute best from your business, it’s important that you attract as many good clients as possible and avoid the bad ones at all costs.

 But how do we know what makes a bad client?  Thankfully, they are pretty easy to spot and also (on the whole) fairly easy to deal with.  Here is my list of the most common types:

  1.  We all want to make it easy for new clients to pick us, so in a lot of industries it is now the norm to have a free initial consultation.  This gives us the opportunity to showcase our talents and convince the prospect that we are his/ her best choice for the job.  However, occasionally, we will meet “Mr Something for Nothing”.  This is the guy who uses the free meeting to gain the absolute maximum amount of technical information as possible, often with no regard for the cost of your time.  If you are a lawyer, he will possibly want all his legal working discussed in that first  meeting.  Luckily, this guy is easy to avoid by setting out the “rules” of your first meeting, and sticking to them (however tempting it might be to give more in order that you can “seal the deal”)
  2. The “Dreamer” prospect has unrealistic expectations of what can be achieved and what the budget should be for doing so.  I’ve had many conversations with digital clients who tell me similar stories of prospects who ask them to “build the new Ebay/ Facebook/ Google” with a budget of £500.  The secret to avoiding this guy is to create a list of high quality questions that you can ask before agreeing to a meeting with them.  These could be around project timescales, overall framework, background to the idea and the prospect, maybe even budget.  It will save you a lot of time!
  3. The Scope Creep client often agrees to a project specification and a price and then starts adding those little extras in as you go along.  For example, the guy whose laptop you fix for a pre agreed price who then expects you to fix his printer as well, for free! Or the bathroom you fit for a customer, who then expects you to do half a dozen extra plumbing jobs around the house “whilst you are there”.  Be careful, these extras, soon mount up.  To avoid scope creep, document what is included in the price and maybe even include a list of what isn’t and typical prices for doing these tasks.
  4. Have you ever been told “XYZ down the road are cheaper than you”? Then you’ve met the Discount Seeker prospect.  He’ll often low ball your fees with promises of loads of future work (which never materialises!).  His cheapness is often seen to match his ability to be ever demanding of your time.  Know your worth and stick to it!  If he wants a cheaper price, then take something out of the deal to match his budget.
  5. The Discount Seeker is often morphs in to the Time Vampire.  This is the client who e mails you regularly, often without reason and who expects an instant response.  If you don’t provide one, he’ll be calling you within the hour to ask why not! He may want regular meetings “just to stay in touch”.  Ask their expectations up front and agree a support package to suit them and their project and then price properly for it!
  6. The High Profile Client often will lowball your fees in the same way as the Discount Seeker, but will justify his move by claiming “As a high Profile client, my XYZ project will be great for your portfolio”.  Unless you are planning a targeted strategic move and need this client’s testimonial in your portfolio desperately, avoid his ploy. It’s just his way of getting his work done cheaply!  Try telling him that you provide first class service to all your clients and it would be unfair on the others to subsidise him.
  7. The Impossible to Please client will constantly bombard you with complaints, changes, queries, price objections and will almost never say thank you, even if you have really gone “the extra mile” to make them happy.  Stick to the script and refer back to your brief wherever possible.
  8. The Can’t Pay, Won’t Pay client.  These are a difficult beast to spot!  All starts well when they agree the scope of the work you’ll be doing and even agree the price.  You then do the work and start the waiting and excuses game! Weeks or months will pass and they’ll make no attempt to contact you to discuss the invoice.  When you do speak with them, there will be a raft of excuses for non payment, including the infamous “the cheque is in the post”.  Structure your contracts so that you get paid up front (in part at least) and include milestones and payment milestones within the contract.  That way, even if they default, you’ll only be ever down one stage payment.

 By avoiding these types of clients, you can concentrate your efforts on the good ones, the profitable ones and above all, the ones are that great to work with.

What other stories of bad clients have you got?

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Living Proof…Our Performance In May

June 11th, 2011

Whenever I talk to business owners I always advise them to measure the numbers that are most important to them and their business.  This isn’t just the turnover and profit type indicators, but the underlying measures that exist in every business.

If I’m advising other business owners to do this, you’d expect us to do the same with our business, right?

For us, one of the most important measures in our business is our customer happiness score.  After all, this determines how likely our customers are to continue to work with us and how likely they are to recommend us to their business contacts.  Each month, we ask our clients for their feedback…..Our score for May was 9.3 out of 10.

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Paying Yourself in The most tax efficient way has changed!

April 16th, 2011

As you’ll already know, the most tax efficient way of paying yourself from your company has been to take a low salary of  £476 a month and then topping up the remainder of your income with a dividend payment (provided that the company is making sufficient profits, of course).

From the 6th April, there will be some changes to the amounts you can pay:

  • You will be able to pay yourself a salary of £589 a month, without incurring any tax or national insurance liability.  This is an increase of 23% on the amount available during 2010/2011 tax year.  This amount is sufficient to maintain your entitlement to the basic state pension.
  • Assuming that you pay yourself the £589/month and don’t have any other income, you can pay yourself a net dividend of £31,866 each year before you pay additional income tax
  • Tax planning tip: Setup your £589 per month salary as a regular monthly payment and then keep track of the dividends you pay yourself throughout the year. Doing a few sums prior to the end of a tax year will help you pay yourself in the most tax-efficient way.

 

Changes to National Insurance

  • Employer National Insurance Contributions (NIC) will rise by 1% to 13.8% from 6 April 2011. The rate that employees pay will also rise by 1% to 12%.
  • To lessen the blow, the government has also raised the employer NIC threshold (the point at which employers start to pay NI) to £136 per week (£7,072 per year).
  • Tax planning tip: Instead of increasing salaries for some employees, you could make pension contributions on their behalf instead. There is no tax or National Insurance to pay on employer pension contributions, so it can be of significant financial benefit to both the company and the individual.    
  • Another tax planning tip: If you are planning on paying bonuses to staff, doing so before 6 April will save you the 1% increase in NIC (bonuses are treated in the same way as salaries). Every penny counts, as they say
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The VAT Increase – What it means for you

December 30th, 2010

VAT increases to 20% with effect from the 4th January.  The normal tax point rules will apply, so if the invoice or payment is made before 4th January, VAT will be at 17.5%, on or after 4th January, it will be 20%.

Basic Rules

  1. Retailers should start accounting for VAT from 4th January using the VAT fraction 1/6th (of the amount the customer pays).  If the customer takes the goods away prior to the 4th, account for VAt at 17.5% (7/47ths)
  2. For all businesses that issue sales invoices, these should include VAT at 20% if raised on or after the 4th
  3. For supplies of services that span the change, you can charge 17.5% for those supplied before the 4th and 20% for those supplied afterwards.  You can choose to charge all at 20%
  4. Suppliers issuiing invoices before the 4th, but delivering after it can choose to charge 20%
  5. Businesses issuing quotes for work to start after 4th Jan, must include VAT at 20%, unless payment is to be recieved before then
  6. Refunds and credit notes should be given at the same VAT rate that the orginal invoice was issued at.
  7. Sales of tickets for events taking place in 2011 can still be charged at 17.5% up to 4th January.  This is because the point of payment is pre 4th January
  8. The VAT rate change will also impact on those using the flat rate scheme.  The new flat rates can be found here

HMRC have issued full guidance notes, which can be accessed here.  As always, if you have any questions on how these changes impact you, please give us a call

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Three simple steps to get rid of those annoying receipts

December 29th, 2010

New year is almost upon us, time to clear those desks and start the new year with less clutter.

 You can start with getting rid of those annoying little receipts – you know the petrol receipts, the parking tickets, the small value postage receipts and the like.

 HMRC do dictate that you keep a copy of such receipts for 7 years, BUT the copy can be either paper or electronic.

 With the rise in the use of smartphones, such as the iphone, there is a great and simple way of storing all those receipts electronically.

 Firstly, scan the receipt onto your phone.  There is an iphone app here that acts as a scanner.  That means you can dispose of the receipt straight away – no more clutter in your pocket or wallet for weeks on end!

 Secondly, I’d never recommend storing the scanned receipt on your phone.  So much can go wrong, such as getting the phone stolen or it crashing.  Once you’ve scanned the receipt, I’d recommend using a free online storage application, such as Dropbox to transfer your receipts to.

 Finally, if you use one of the great online bookkeeping software packages, such as Kashflow, Free Agent or Xero, you can then upload your receipt from Dropbox into the software and store it as an attachment to your accounting entry.  That way, the receipt will always be “tagged” should you ever need to retrieve it.

 There you have it, three simple steps using today’s technology that will ensure you never have another lost receipt, another receipt not claimed for or a pocket full of old receipts!

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The 12 Tax Tips of Christmas

December 6th, 2010

Whilst the festive season is almost upon us, business owners are strating to look towards 2011, how they can reward their key people and save tax at the same time.

I’ve put below our “top 12 tips” for keeping your key team happy, whilst at the same time reducing your tax bill.

  1. Put on a free staff party (or parties) costing up to £150 a head (incl VAT).  More details here
  2. Provide free bicycles for travelling between home and work
  3. Offer a free company mobile phone
  4. Introduce a childcare voucher scheme
  5. Provide a free car parking space at or near the place of work
  6. Pay long service awards of £50 to anyone who has worked at the company for over 20 years
  7. Introduce free or subsidised meals in your staff restaraunt
  8. Offer free eye tests & glasses.  More details here
  9. Make company contributions to pension schemes
  10. Introduce free directors liability or professional indemnity insurance
  11. Offer a free healthscreening session
  12. Offer welfare & counselling services

With all of these ideas, you need to ensure that the paperwork supporting the implementation is done correctly.  If you’d like any more information on any of these ideas, or if you’d like help implementing them, please do give us a call.

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Let the Company pay for your eye tests and spectacles

October 19th, 2010

Where employees need to use computers or other screens in their day to day work, Companies can provide eye tests under health & safety legislation.  Whilst eye tests can be paid for by the Company, there is no taxable benefit against the employees.  Even better, should the employee need glasses these can also be paid for by the company, should it be shown that glasses are needed for work.

Whilst having their eyes tested for work related purposes employees mad add on additional tests, such as a test for contact lenses.  If there is no additional cost for this test, then it’s also tax free.  If there is an additional cost, then it’s likely to be less than that of a stand alone appontment and, as long as the employee re imburses the company for that part of the test, there is also no tax charge on the employee.

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One simple way to increase profits

September 6th, 2010

How do you increase your profits?

The most common reply I hear is “get more customers”.  However, getting more new customers can take a long time and be costly.  Instead, wouldn’t it be easier to sell more services to existing customers?, the customers who already have an established relationship with you and like the service/ product you provide. 

When trying this approach, an common mistake is to market every service you provide to every customer.  The problem with this is that the one service a customer needs may be hidden in the middle of a list of loads of services or you may be marketing inappropriate services to the wrong customers.  For example, there would be little point in me sending marketing messages about payroll services to all my clients who work alone.  They (currently) have no need for this service and it would be obvious that I wouldn’t have put much thought into their needs.

How to get the right messages to the right customers

There’s a simple and practical way to get the right messages to the right customers.

Firstly, open a blank spreadsheet.  Start at column “B” and list all the services/products you supply across the remaining columns.

Then, in each row, list the name of each of your existing customers.

Once you’ve done that, work through each customer and “tick off” the services they currently buy from you by highlighting the relevant cell.  When you’ve finished doing this for every client, you’ll be left with a chequerboard effect, the white spaces being where customers doesn’t buy those services from you.  You’ll be amazed at how much “white space” there is left!

The second, and equally important, stage is to work through the list again, this time highlighting irrelevant services for each customer e.g. payroll for single person businesses.  Once you’ve done this, you can start to market your products/ services intelligently to the customers who may have a need for them.  As customers buy more from you, you can update the matrix, crossing off each service as it is purchased.  Once the spreadsheet is completely shaded in, you know you’ve maximised your income potential.

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Think Visibility – An Accountants View

September 6th, 2010

This Saturday I attended the Think Visibility conference in Leeds.  The conference covers subjects such as search engine optimisation, the use of social media and how to get great PR as well seminars on affiliate marketing and spamming!

The majority of the audience were from the digital industry and a couple of people asked me why I was attending, seeing as I run an accountancy practice.  Well, my attendance was down to three reasons:

  • I work with a lot of clients from the digital industry, from freelancers to agencies.  Attending these events helps me understand their industry that little bit more and helps me add value to their businesses.
  • Whilst the seminars did include some technical content, a lot of the content was delivered in plain english and my notepad is now full of great ideas that I can introduce into my own business.
  • I may be able to share some of the ideas with my non digital clients and help them find the expert help to implement them.

What about the day

I’m not going to go into lots of detail about what I learned as the experience will be differant for every attendee.  One particular point did stick in my mind though…..One of the speakers discussed ROI on social media, but called it Return On In action, i.e. the measuring of not doing anything…a term I really like.  We often measure the return we’ll get from investing in a project or new piece of software, but seldom do we consider the cost of doing nothing.   It’s funny that during these tough times many businesses have chosen to do exactly that…..nothing.  I often here “we know we should do XYZ, but it’s going to cost us and we don’t really want to spend that much”.  

How often do Digital Agencies talk to their clients about the cost of doing nothing, I wonder?

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