Tag: business advice

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Slowing down to move faster 

December is our busiest month of the year. We have lots of limited company deadlines* for companies with March year ends as well as personal tax return deadlines* in January. AND we close the office for 2 weeks so that the team can spend time with their families. 

This December has been busier that usual with trying to prepare sole trader and landlord clients for MTD in April at the same time as talking limited company directors through verifying their ID for Companies House* 

The only thing for it was to escape for a day with other UK based members of GWAI (Global Women Accountant Influencer group) discussing future plans and sharing ideas while also relaxing at a spa. We’re all back at work revitalised and ready to power through to Friday when Christmas holidays begin and we can switch off completely. (For those with families they just switch their accountant/business leader role for their mum role) 

Sometimes you can move faster if you just take time to rest. 

*None of these would be at all stressful if clients responded to our first, or even our second reminder earlier this year 

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How SMEs can scale without cashflow chaos 

Scaling is both an opportunity and a risk for businesses. It isn’t for everybody and you may prefer to stay small and focus on improving yout profitability instead, in which case many of the same advice can apply. 

Rapid growth can often mean increased costs ahead of receiving the additional cash and this can cause a cashflow bottleneck. We believe in sustainable scaling so here are a few tips: 

  1. Have a cashflow first approach to scaling 
  1. Forecast your cash requirements and the same time as you forecast your growth 
  1. Review your payment terms for both sales and purchases 
  1. Tighten up your credit control processes. Chase early, and chase hard. If a customer isn’t paying then you will lose whatever costs you have incurred. 
  1. Review your terms of business to ensure that you are invoicing promptly or even getting paid in advance 
  1. Arrange the right type of debt. Lower interest secured debt may be cheaper than short term credit card borrowing 
  1. Consider taking on more equity funding but be aware that this will dilute your ownership and control of the business 
  1. Track your cash balances and forecast daily if necessary  
  1. Keep an eye on your run rate ie the number of days of overheads your current cash balance will cover (Even my son did this when first setting up as a freelancer!) 
  1. Tighten inventory management, work in progress, and costs that aren’t generating a decent return on investment. 

Minerva Accountants can help with all of this by reviewing your current processes, preparing forecasts, arranging finance, and recommending useful software. Even accountants need to pay attention to their cashflow when scaling. 

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10 reasons to use a mentor 

  1. Experience – unlike a coach they can offer real world advice as they’ve been where you are before and survived 
  2. Some mentors, like me, are also qualified coaches so they can help you do what’s right for your business rather than just share their own stories. This gives you the best of both worlds. 
  3. They speak the same language 
  4. They will always be in your corner to support you 
  5. They can offer friendly critique of your ideas 
  6. They may have a black book of useful connections for you 
  7. They can act like a NED for an individual business owner 
  8. You can bounce ideas off them before you implement 
  9. You are allowed to disagree as your business is not the same as their business 
  10. As somebody on the outside of the business looking in, they may have a better view from the bridge while you may be busy in the engine room of your business
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KPIs for a better work-life balance 

You probably know by now that, in order to focus on getting something done then you need to start measuring it. 

I love what I do and we only have good clients so it’s too easy to work when I should be doing other things. Like relaxing. Two KPIs that I use to ensure that I maintain a decent balance are total hours worked and profit per hour. 

The first one is fairly clear. I ran my first accountancy practice on 25 hours a week (the length of a school week) to fit around my 2 small children. I do work longer hours now they’ve grown and flown but I still want time for me.  

By measuring profit per hour I have a clear benchmark when deciding whether to do something myself, to automate it, or delegate it. Whilst somebody else might take the same time as me they may be cheaper or, they might do something faster because they are an expert more familiar with the task. Software may cost money but it can save time which is why we invest quite a bit in order to run a lean business.  

Taking yourself out of the day to day of the business will also increase the value if you are considering a business sale at some point in the future. A business that operates independently of you will give you a better balance AND allow you to scale AND increase the value when you finally exit. 

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“Your success in life depends on your ability to speak, your ability to write, and the quality of your ideas, in that order” Sir Patrick Winston 

Professor Winston is a computer scientist and director of the MIT Artificial Intelligence Laboratory 1972-1997. Somebody renowned for the quality of his ideas, and yet he promotes communication over this. 

And I have to say that I agree. We need good communication, whether on a stage or in a book, to demonstrate what we know. It isn’t much good if we can’t share our ideas in a way that others can understand and act on. 

I’ve worked in companies, and with accountants who appeared to believe that ‘knowledge is power’ and kept everything to themselves. But that only gives power to one person. Let’s find ways to share our good ideas with those who need it. Not regurgitating unsolicited advice for our own ego but because we are genuinely able to help. 

If you’d like to learn to speak then I recommend Toastmasters or I know several good speaking coaches such as Scott Johnston. 

If you’re already comfortable and speaking regularly and want to do this professionally then I recommend joining the Professional Speaking Association

Writing is harder but AI can help to improve your writing.  

  1. Draft it 
  1. Pop it into AI along with the tone of voice, intended audience, and purpose eg please (I always say please because, who knows, it might make a difference when machine rules the world 😉) rewrite this draft in the tone of voice of Della Hudson FCA for an audience of accountants/business owners wanting to grow their business. 
  1. Re-edit it back into something a little more human and in line with something that you might actually say. 

Have fun experimenting with the right AI prompts for you.

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Les bons comptes font les bons amis 

It’s a French saying that means that keeping good accounts makes for good friendships.  

Usually this means that debts should be settled promptly. I’ve written before about how important this is in the business world whether you’re the one paying promptly or ensuring that your clients pay you on time. 

But it could also be used to talk about the quality of your accounts and the importance of keeping them up to date. And this is why I’m (broadly) in favour of MTD (Making Tax Digital) which finally goes live in April with the requirement for maintaining digital records and making quarterly submissions to HMRC.  

The benefits I see are: 

  • Up to date information for decision making, debt collection, and just knowing roughly how much tax is due, and how much the business owner can take for themselves. Anybody who has dealt with the extortionate rate of ‘penalty’ tax on overdrawn directors’ loan accounts will understand the importance of this. 
  • Faster year end accounts when seeking finance or renewing mortgages. 
  • Processing bills faster with the use of technology just by taking a photograph or forwarding an email. No more mourning over lost receipts, without which VAT can’t be claimed. 
  • Tools to store receipts electronically and saving the need to print out paper invoices which frees up space and is much better environmentally 
  • Faster cash collection with recurring invoices, prompt invoicing from a phone, connecting to direct debit software, or card reader apps on your phone. 

And I believe, with such a tech savvy nation, this is the time for it. Most people have a smart phone on which to take photos of their children or their receipts to upload into bookkeeping software (the receipts, not the kids although we don’t mind seeing pics of the latter too) to be processed by the business owner or bookkeeper with the help of AI suggestions.  

Up to date record keeping will allow accountants to provide much more proactive support to clients and, as somebody who likes to see my clients thriving, I’m looking forward to it. No more websites with the empty promise that ‘we’re PROACTIVE accountants’; it’s about to become reality. 

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Create without restraint 

I saw this on a social media post yesterday and it got me really excited. (Okay, accountants clearly have a different tolerance for excitement compared to the rest of the world 😉) I love coming up with ideas to improve my own businesses and also clients’ businesses.  

We even have quarterly meetings to discuss my ideas. Strictly they’re our 90-day planning meetings where the team get together, in person, if possible, to plan the next quarter. 

Fortunately, I have a very pragmatic business manager (Kate) who restrains me and keeps me on track! Apparently, we don’t have time to do EVERYTHING I want to improve the businesses in the next 90-days, so we discuss everything and then prioritise.  

Kate then creates an action plan and sends these out to each of us. And then she NAGS me to get these done. This accountability means that my ideas become reality instead of drifting away like dandelion seeds on a summer day. 

We even package this as for our clients: 

  • Business coaching from me (I’m a qualified coach as well as an accountant) to help unblock your business  
  • 90-day planning sessions with Kate who also runs a VA business to get things done 
  • Clarity financial reviews to grow your business by numbers (and I’ll even throw in a copy of my Growing by Numbers book) 

So, feel free to indulge me and my creativity by booking a group or individual coaching session this month. 

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Be a Joy Seeker 

Marie Condo goes through homes clearing out anything that isn’t essential unless the client can honestly answer the question ‘Does this bring me joy?’ 

My suggestion is that we should do the same with our businesses. Weighing up profit and passion. 

Some work we do because it is highly profitable but, if you’re like most business owners, there’s probably some work that barely breaks even. You can either stop doing it or find a way to do it more profitably, perhaps by automating it? This may be the nature of the work or the particular clients, so it is worth reviewing both each year. 

Some work we do because we love it. Coaching is my passion, and I love seeing the result of my advice in clients reclaiming their work-life balance or taking holidays after making their businesses more profitable. 

Ideally you would only do things that fall into both categories but sometimes they only manage one. Once you’re making enough money to cover your essentials I’d focus on your passion. If we do this, we will generally do a better job and be able to increase our fees.  

If something is neither profitable nor enjoyable then you should stop providing that service or pass on that client. And you should carry out this review each year until you have a profitable business that you love.

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Building a business can be as painful as walking on Lego 

I read this somewhere last week and it is so true. Whilst there are great highs on the roller coaster of business there are also some real lows. 

So what can you do?

When you identify a problem that is likely to recur in some form then it is worth spending time to make changes to prevent it. But sometimes the solution is not really obvious. 

It may help to work through this with a coach, a colleague, or on your own by asking some simple questions 

  1. What exactly is happening? 
  1. When did this issue start? 
  1. What is the impact? 
  1. What changed recently that might have triggered this? 
  1. Have we had a similar problem before? How did we resolve it? 
  1. What outcome do I want to achieve? 
  1. Is this realistic given any current constraints? 

Here’s to using your Lego creatively instead of as an instrument of torture. 

Business confidence monitor 

The Q3 ICAEW Business Confidence Monitor is here and shows the increased tax burden are holding back business and economic growth 

ICAEW Business Confidence Monitor | ICAEW 

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Accountant: therapist or dentist? 

When I set up my first accountancy business one of my old school friends, now living in USA, told me that a visit to her accountant felt like a visit to her dentist. As I’m one of those people who is terrified of the dentist (in spite of never needing treatment) I was determined that my business would be nothing like that. 

When we had offices I invested in a decent coffee machine and we ensured that clients could charge their phones while visiting. 

When we used to provide monthly envelopes for clients to send in their invoices for bookkeeping I chose some that felt quite velvety (even though they were four times the price of the others) so that clients would have a bit of niceness. 

We send welcome gifts of chocolates from a local business (obviously we had to sample them first!) and birthday cards by a local artist. 

Now we are busy building an app for clients to calculate how much tax they need to save and how much is available for dividends. 

What can you do to make your clients’ experience smoother? 

Business confidence monitor 

The Q3 ICAEW Business Confidence Monitor is here and shows the increased tax burden are holding back business and economic growth 

ICAEW Business Confidence Monitor | ICAEW