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The importance of delegation 

Some people find it easier to delegate than others. I’m one of the former, perhaps because I find it easier to find people who are better than me? 😉 But it is also important to be able to stand back and let them get on with things while ignoring the temptation to micromanage.

I’ve written and spoken elsewhere about HOW to delegate so I’ll address WHY it is important for you to delegate.

  • Moving away from hands on work allows you to remove yourself from the business in order to focus on strategy and business improvements. You can’t see the view from the bridge if you’re busy shovelling coal in the engine room.
  • It empowers your employees and enables them to step up (using you’re your training, procedures, and checklists) and maybe even step beyond your current standards
  • It allows your team to develop more skills themselves and even to add new skills to the team
  • It improves team productivity and efficiency. Get the right pegs in the right holes instead of trying to do everything yourself, irrespective of whether it’s in your area of expertise or not
  • Spreading the workload allows you to reduce your personal stress and avoid burnout

So, sit back, relax, and delegate.

A couple of extra bits that caught my eye:

New supercomputer in Bristol UK’s most powerful supercomputer Isambard-AI comes online – BBC News

ICAEW Q2 Business Confidence Monitor (regional updates will follow) UK Business Confidence Monitor: National | ICAEW

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Tax Tip – 10 point tax review with year end 

When we complete year end accounts for our clients we complete a 10 point tax review for each business as standard to ensure that they are making the most of their various allowances.  

1. Are the using the most appropriate trading vehicle eg sole trader or partnership vs limited company 

2. Should they register for VAT voluntarily or if they have exceeded the rolling 12 month limit (currently £90k including reverse charge income)? If already VAT registered are they on the most suitable scheme? 

3. Should their spouse be a partner, shareholder, or employee? 

4. Are they taking the most appropriate salary vs dividends? 

5. Are they approaching certain cliff edges such as 25% corporation tax, higher income child benefit charge, etc and are there legitimate ways to keep their income below these limits? 

6. Are they investing in pensions? 

7. Should they be paying/receiving interest on their DLA? 

8. Are they using part of their home for business and should they claim these costs? 

9. Are they eligible for Research and Development tax credits and is it worth claiming (as the fees can be quite high for legitimate experts)? 

10.Would they benefit from an EIS/SEIS scheme? 

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How to automate your business processes 

Start by identifying the most repetitive tasks, or the repetitive steps of larger tasks.  For us that is the accounts production, bookkeeping, onboarding new clients, and chasing client records. 

Choose the best tools for you. This may not be the same as for another business. For instance, we wouldn’t use the same tools as a large accountancy practice as we have fewer clients, a smaller team, and our clients’ needs are much simpler. 

We use (mainly) Xero for our client bookkeeping which means that we can use Hubdoc, Apron, or Dext for our clients to upload their invoices digitally. XeroTax fits smoothly onto our Xero clients or we use Xero Ledger for those clients not already on Xero. We have two different working papers for limited or unincorporated clients. The danger with small clients is that the checking can often take longer than the actual accounts production so we try to simplify this as much as possible. Onboarding, and the interminable task of chasing clients for records, is done through Bright Manager. 

Train your team to use the software. Xero provides free training and certification for accountants which enables us to get the most out of the software. We create our own training videos for clients. Bright Manager has some training but we rely more on our own internal videos. 

In line with our continuous improvement mindset we keep trying to get more out of our existing automation and to keep an eye out for other automation that can help us. 

Automation is great but never forget to have a human being available when necessary. 

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Tax Tip – Dividends

If you take dividends out of your business without sufficient profits after tax to cover this they can be classed as ILLEGAL dividends. To avoid this we often end up reclassifying payments as director’s loan account (DLA) but this can lead to additional taxes in the form of Section 455 penalty tax on an overdrawn DLA, class 1A employers national insurance on beneficial loans, and personal tax on beneficial loans. 

To avoid this please stop taking money out of the company and instead check:

  • Will there be sufficient profits left in the business to cover corporation tax? This will require you to have up to date bookkeeping or even management accounts.
  • Will there be sufficient cash left in the business to pay all bills as they fall due? This will require a cashflow forecast. It is particularly important to ensure that you have funds to settle all tax bills when they are due as HMRC take a particularly dim view of business owners helping themselves to cash that should have been used to pay taxes. 
  • Have I completed the correct paperwork? You will need a minute of the board meeting declaring the dividend and a tax voucher when it is paid out or transferred to your DLA?

If you do not have enough money in your business then you will have to find the cash for your personal expenses elsewhere or to alter your lifestyle to live within your means.

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Your business isn’t your family

Okay, some of us run a family business, but it should still be run along professional lines.

Employees may underperform and you will need to follow your disciplinary procedures to bring them back in line. You may even need to sack them if they are more of a liability than an asset so make sure that you do everything legally. Employees may leave you for better pay, conditions, or opportunities. Or you may need to make their positions redundant if you need to reorganise the business or make cutbacks if the business is underperforming.

While many clients will become friends yours is primarily a business relationship. Why would you offer ‘mates rates’ when your mates should be supporting you to set up your new business? Would they give up part of their salary as willingly as you drop your prices? You may need to be disciplined about only answering business queries during working hours and not in the middle of your sister’s wedding. Real friends wouldn’t want to spoil your free time.

Clients may leave if they feel the grass is greener on the other side in terms of price or services. Similarly we need to charge commercial prices to everybody and to increase those in line with inflation each year.

If you treat your business as a business and your friends as good employees or good clients then you will be able to offer a much better service overall. If you have to sell yourself cheap or accept poor standards to keep their friendship then are they really friends?

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Interest on directors’ loan account (DLA) 

If you have put money into your limited company that has not yet been repaid then you can pay yourself interest on this loan. This can be a tax efficient way to take money out of the company BUT you would need a CT61 form completed for HMRC each quarter. 

If, on the other hand, you have borrowed money from your company then you may face a higher tax charge and even a personal tax charge.  

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Time Management Tips for Entrepreneurs 

If you’re managing a business then you probably have 101 tasks requiring your attention even if you have delegated as much as you can. 

  1. Schedule tasks in your calendar. Knowing how long each task will take will help you to understand what is realistically achievable 
  1. Prioritise tasks based on importance and urgency. We use internal deadlines to ensure that we’re not running up against important external deadlines but also to keep internal projects on track 
  1. The way to eat an elephant is one mouthful at a time. Break larger tasks into smaller, bite-sized steps. This seems less daunting but it may also be possible to fit a smaller task in around larger ones so that you make forward progress. 
  1. Avoid multitasking to maintain focus. Easier said than done! I often flit around when I have ‘too many’ tasks on my list and end up achieving nothing as I stop-start each task multiple times. 
  1. Set aside specific times for checking emails and messages. I do a quick triage each morning and then answer emails and call backs from 4pm (unless I’m doing the flitting around in 4 above!) and all of Monday is to clear leftover bits. 

I’d love to hear what works for you. Any habits or apps to recommend? 

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Tax Tip – Changes to Companies House reporting 

From 1 April 2027 all small and micro businesses will need to file a profit and loss accounts at Companies House. This makes sense as an anti-money laundering measure but it can mean sharing confidential information such as turnover and margins with competitors. 

As the tax benefits of trading through a limited company are now minimal you may prefer to become a sole trader or partnership BUT remember that MTD (Making Tax Digital) will mean quarterly tax filings from April 2026. 

Talk to us if you want to learn more.

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How to achieve work-life balance as a business owner 

You may have started your business with the intentions of having a better work-life balance or for some other reason and the work is now taking over your life. If so here are a few tips. 

  1. Set clear boundaries between work and personal time (and place). I find it helpful to clear my desk each evening and to ensure that I actually log off my computer (it’s also better for keeping your software updated) 
  1. Prioritise tasks – you’ve probably already seen the matrix of urgent vs important where you start with the tasks that are urgent AND important 
  1. Delegate where possible – be aware of how much you could earn in an hour and delegate everything possible to somebody with a lower hourly rate. This might be a virtual assistant, a junior member of the team, or even buying in help at home. 
  1. Schedule regular breaks – I always block out an hour for lunch and an alarm to finish working at the end of the day. My need for tea ensures that I take regular breaks to make another drink (or go to the loo after drinking so much!) 
  1. Schedule holidays – I start each year by blocking off the last week of March, June, September, and December as well as a week around my birthday. I sometimes need to change these dates nearer the time but it means that I don’t book meetings in when I expect to be away. 
  1. Practice mindfulness or other stress management techniques – I don’t meditate but I do enjoy running and letting my brain unwind. It’s how I originally got into triathlons 
  1. Create a flexible work schedule that works for you and your life – this isn’t just for the business owner as all our team have this option 
  1. Monitor KPIs around this – I track my weekly working hours and also my profit per hour. 

What are your top tips for work-life balance 

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Cyber security tips for small businesses 

When we do a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis for our business cyber security is pretty high up our list of risks. As accountants we hold a lot of confidential data of a personal and/or commercial nature so it is important that we do everything that we practically can to protect that data.

Having worked in the Disaster Recovery team during my stint in IT here are my top tips on cyber security:

  • Use strong, unique passwords for all accounts.
  • Use a password keeper such as Onepass to store these so that they can be used on your different devices.
  • Implement 2 factor authentication
  • Don’t share accounts/software licences!
  • Always use the latest version of your software and instal updates asap as these will include security updates
  • Train your team on best practice
  • Do not display your router password to casual visitors or on the router itself – this is a particular weakness for those of us who use cloud software
  • Backup regularly and hold the data securely. Cloud software can help with this.
  • Take extra care to look out for phishing attacks. Hover over senders’ email addresses and any links. Any HMRC/government links should end .gov.uk
  • Delete access for former employees as soon as they leave.

I recommend getting CyberEssentials certified. Find out more here: https://www.gov.uk/government/publications/cyber-essentials-scheme-overview