Tag: accountant

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Don’t call it ZERO! 

One of my pet hates is people who call XERO Zero. 

I can understand it when business owners make the mistake but accountants and bookkeepers who claim to be expert enough to assist clients do it too. 

And too many of these accountants don’t understand Xero’s full functionality and use it like any ordinary desktop (some even ask their clients to print out the reports at year end rather than logging in themselves). For these people Xero is just a big cost whereas, for us, it can really help a small business to punch above their weight in terms of both management information and business efficiency. 

I’ve been using it since a random client came to me using Xero for their bookkeeping back in 2012. And I liked it so much that we became Xero partners in 2013. 

Being a Xero partner means that we get full Xero training FREE of charge. Xero pay the cost for us to get the most of their software. In turn we can pass that on to our clients which we do through online videos as well as advice on how they can use their Xero better and/or take advantage of many of the add ons to save them time. 

So, in our experience, Xero is worth a whole lot more than zero. 

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No more Google! 

Why are you googling when you have a dedicated accountant on tap? Someone who can give you good quality personalised advice. 

Whether it’s ‘my mate at the pub’ or ‘my colleague on the golf course’ there’s nothing more annoying to accountants than their clients taking tax ‘advice’ from unregulated sources. 

As a qualified accountant I have to stay up to date with the latest legislation every year, to spend time understanding my client’s circumstances, and to refuse or refer work that I’m not personally qualified and experienced to carry out. But that doesn’t stop ‘Dave at the pub’ from offering his personal insights. 

Depending on the advice my usual response is that it’s not applicable to my client’s particular circumstances, not viable, or it may even be illegal. It may even refer to US tax legislation rather than UK! Even HMRC’s own website is so heavily dumbed down to be accessible to lay people that it can not always be relied upon. And it certainly isn’t personalised. 

I’m often asked to do live budget commentaries but I always refuse these as I prefer to listen, make notes about the clients each aspect will affect, and then read the full supporting documentation. Only then will I start to offer advice.  

I’m very much in favour of HMRC clamping down on unregulated tax advisers. Let’s make sure that accountants offer the best service possible by staying technically up to date and taking time to understand our clients and their financial circumstances. 

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10 questions business owners should ask their accountant

  1. What was my turnover this month? How does it compare to previous months/years/budget?
  2. What are my main sources of income and how can I grow them?
  3. What is my gross margin and how does this compare to others in my industry?
  4. How much cash do I have in the bank? How much do I need to pay out in the next week/month?
  5. What is my working capital and how can I improve it?
  6. How much tax (corporation tax, VAT, PAYE) do I have to pay and when?
  7. What are the key financial ratios that I should track and why?
  8. How can I collect money from customers faster?
  9. What is the best accounting software and processes for my business?
  10. How can I grow my business or make it more profitable or increase the value for my retirement?

Do you have regular reports/conversations that show this?

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An accountant you can trust

The latest Edelman Trust Barometer was published on Wednesday to coincide with Global Ethics Day and revealed a significant increase in trust in Chartered Accountants in the wake of ongoing economic uncertainty.

The research, commissioned by ICAEW in conjunction with Chartered Accountants Worldwide (CAW) and other professional bodies, found that globally trust in Chartered Accountants has reached 85% and is the only profession – aside from nursing – to have seen an uplift in trust.  In England, 89% of respondents said they trusted Chartered Accountants

What a fabulous accolade, thank you to everybody who trusts chartered accountants like Minerva.

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Tax Tip

Director’s responsibilities

Whilst it might feel good to be the director of your own company you have several responsibilities as directors under the Companies Act 2006:

  1. To act within their powers (in the articles of association etc)
  2. To promote the success of the company for the benefit of its members as a whole ie not benefitting one member above the company eg by allowing one director/shareholder to take out more dividends/loans that the company can afford
  3. To exercise independent judgement – you can take advice but must decide for yourself
  4. To exercise reasonable care, skill and diligence eg using a chartered accountant or professional bookkeeper if you don’t have those skills in house
  5. To avoid conflict of interest
  6. Not to accept benefits from third parties
  7. To declare interests in transactions
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How to buy yourself more time

Having taken over a small practice I have been able to see the time saved by good practice management software.

We use Accountancy Manager but any decent practice management software will offer similar services

  1. A simple spreadsheet upload of all client standing data and services so everything is in one place (the PA from the new practice kindly provided this in the form of multiple spreadsheets which we merged)
  2. Engagement letters generated based on the services provided
  3. Engagement letters and accounts signed online
  4. Clients can update any missing information and changes of address in their standing data
  5. Automatic requests for missing data eg proof of ID or a UTR
  6. Recurring tasks set up automatically for each service
  7. Adding our own internal deadlines for tasks eg 3 months for accounts and 2 weeks for VAT returns rather than the 9-10 months and 5 weeks for the statutory deadlines.
  8. Automatic records request emails generated from those tasks and deadlines (all templates can be modified to suit your personal style)
  9. Time recording as the new practice still uses hourly billing
  10. Marking a task as complete automatically sets up the next occurrence
  11. Automatic links to Companies House to keep deadlines etc updated
  12. Generating confirmation statement reminders and submitting from within the software (a small handling charge on top of the Companies House fee)
  13. Tracking emails between clients and team members so they don’t have to CC me on everything
  14. Central repository of all information which helps as all the team are part time and even I am juggling two businesses.

It hasn’t been perfect (I’ll share my learnings/improvements separately) but it has been relatively smooth.

This technology has freed me up to ‘meet and greet’ the new clients as tech is still no replacement for human relationships.

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5 minutes a day keeps the accountant at bay

I’m starting an initiative for business owners to do their bookkeeping in FIVE MINUTES PER DAY rather than leaving it all to the end of the year.

If you’re on Xero or similar software this would be:

  1. Raise all your sales invoices and quotes. (Don’t forget to add a button to the invoice template if you take card payments. Remember to set up recurring invoices for regular clients. And don’t forget to turn on invoice reminders)
  2. Mark any accepted quotes so that they can be converted into invoices
  3. Forward electronic receipts to your Automated Bill Entry on Xero or Dext
  4. Take photos of any other receipts using Hubdoc or Dext
  5. Reconcile your bank by matching against the sales invoices or purchase bills/receipts. (You can set up recurring transactions for regular bills)

All this can be done through apps on your phone. When bookkeeping is this simple it’s not just kids who will be glued to their phones.

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Less is more

Management accounts. What should they include?

It depends very much on the users, their goals and their understanding of finance.

Most management accounts that I have seen over the years are just information overload. I prefer to focus on three key numbers at a time. These numbers may vary over time as focus shifts to improving different parts of the business.

Of course there should be more information available to drill down but most managers prefer to focus on a few key items at a time.

What do you like to see in management information?

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Why Monday morning made me sad

I recently decided to make a concerted effort to stay on top of my emails. Not an Inbox Zero exercise where you just hide them in different folders (I tried it and out of sight is definitely out of mind for me) but actually dealing with them. As part of this exercise, I started measuring how many emails I have in my inbox when I log on in the morning and how many I have at the end of the day. Of course more emails come in throughout the day too but I don’t currently measure these.

It is quite alarming how many emails come in outside of conventional office hours!

Some of these are automated or from clients and colleagues in different time zones or people who, like me, choose to work odd hours but most are not.

And far too many people were working over the weekend so my inbox was jammed when I logged on on Monday morning.

If you’re one of these people and you’re working through necessity rather than choice then I really wish that we could talk. I’ve always run my businesses on an average of 25 hours per week and it breaks my heart to see people working long hours and missing out on family or personal time when I know I can help them.

We have all sorts of options from individual coaching to group coaching and online courses. If you’re really strapped for cash then I run free webinars and write books but frankly, most people don’t take action without a coach of some sort to motivate/nag them.

Have a look at hudsonbusiness.co.uk to see what we have available for accountants/bookkeepers and other business owners and make your business work for you in 2023.

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Confidentiality comes as standard

When I joined ICAEW as a trainee accountant sometime back in the dim and distant past I signed up to a code of ethics. Like most accountants I take that code of ethics very seriously as I believe it is part of being a professional. Amongst other requirements was confidentiality. Everything is confidential so the extent that ICAEW suggest that I shouldn’t even share the names of my clients without their permission, let alone information about their business.

So it was quite a surprise when a prospective client asked me whether our conversations would be confidential. It felt a little like somebody asking whether I like tea (I’m a self-confessed tea addict). It is something so ingrained that I hadn’t even realised that lay people may not know this.

Which got me wondering what else we don’t share as we take it for granted.

We’re so busy focusing on what differentiates us from our competitors that we forget some of these other positives that are shared by many of our competitors.

Anyone can call themselves an accountant, but ‘chartered accountant’ is a protected title in law. I’m proud that I’m not just a chartered accountant but a Fellow and also an elected member of ICAEW Council helping to shape the future of the profession. But we need to make more of this.

Most professional accountancy bodies have similar codes of ethics whereas unqualified accountants or those not belonging to any professional body are not bound by any such code but dependent on the individual’s personal integrity. We’re supervised by our professional bodies so clients have recourse if they believe that we have failed to live up to those standards. We are required to undergo checks to ensure that we are ‘fit and proper’ persons. And we are also required to have professional indemnity insurance in order to protect our clients in the event that we make a mistake.

I have also signed up to a code of ethics as a member of the PSA (Professional Speaking Association) which means that I pay for copyright to use pictures on any slides so that the event organiser won’t be sued. Similarly for any music and videos I use in my talks. It’s not something that most speakers think about and they may not even realise the importance of paying royalties to the creators of those media.

What mundane things do you do instinctively to protect your clients? Can it become part of your marketing?

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