No VAT invoice = no VAT reclaim so it is important to request a VAT invoice (which shows the VAT number along with other necessary information) and not just the receipt from the card machine.
A good bookkeeper is worth their weight in gold!
I’ve said it so many times that I think ICB (Institute of Certified Bookkeepers) made me a Champion a few years ago to try and shut me up.
The line between accountants and bookkeepers is quite blurred these days. Many accountancy firms use client bookkeeping as a way to train juniors but we prefer to use a properly qualified bookkeeper for most of it.
As a technophile I love machine learning and other AI but bookkeepers are particularly good at detail and spotting anomalies. Accountants tend to view the accounts as a whole to ensure that they tell the true story of the business and to look for ways to help the business to grow or operate more efficiently. We provide telephone/email support to all our clients and their bookkeepers so that we can work together. This helps them to code strange items correctly first time. Depending on the size of client we also carry out regular bookkeeping checks using Xenon Connect or Xavier (some bookkeepers do this themselves)
With a good bookkeeper doing all the data entry and regular reconciliations we can just swan in at the year end, press a few buttons and produce the accounts. Okay, that’s a bit of an overstatement but it certainly makes our life easier if we have ‘clean’ records as our starting point. It also helps us to provide better value for money when we’re not sorting out messes.
Do you use a bookkeeper or do you do it yourself?
Tax tip
Cash is king and most small businesses fail due to lack of cashflow. Even if you have a relatively small business you can use accounting software like Xero to:
- Add a link to your invoices for clients to pay by card using Stripe, Paypal, or similar
- Plug a small (usually free) card reader (Zettle, Square, or similar) into your phone for clients to pay by card before you leave site
90 day planning
A lot of businesses don’t bother with a business plan because things change and they’re out of date almost as soon as they are written.
I sympathise.
Although I do like to have a 12 month budget to check that I have enough money to pay the team and to reinvest in the business we rely mainly on a 90 day planning cycle. Things are usually fairly predictable for the next 90 days so we get together as a team. It’s the only thing we try to do in person as we all work remotely the rest of the time.
We loosely follow this agenda:
- Review KPIs for last period
- Check actions from the previous meeting
- Discuss any issues and solutions
- I share my plans to move the business forward for the next 90 days and we all agree what needs to be done step by step, and by whom.
After the meeting
- My PA, Kate, emails me with a summary and the detailed action lists for each of us
- I add my actions to my to do list.
- If necessary I allocate slots in my diary.
- Kate works through all her actions (much more efficiently than me!) and gently reminds/nags me to get on with mine
The result is that, over the next 90 days, we make a lot of progress. Even if we don’t quite get around to everything the business has moved forward a lot from last quarter.
It’s like my running – CONSTANT FORWARD MOTION, no matter how slow.
If you’d like a copy of our budget workbook you can purchase a copy here or drop me a line if you’re interested in group or individual coaching to improve your own business.
HMRC do not make the law
HMRC do not make the law, they interpret it in the same way that accountants and tax advisers do. If we can’t agree on the interpretation then the courts will decide. HMRC is not the final arbiter.
HMRC have all sorts of helpful information on their website for the public to read. This means that it is often dumbed down and vital points can be missed in the interest of simplicity. This means that Google and ChatGPT can lead to ‘interesting’ ideas from clients on how they can save tax which ends up with me correcting them by quoting chapter and verse of whichever act is applicable.
Our clients work hard so we don’t want them to pay any unnecessary taxes but we also want them to sleep at night knowing that they have complied with all laws and regulations.
Too many accountants just rely on the HMRC website and forget to check the correct sources. Proper CPD is really important to maintain professional standards and to give the best advice. We should be better than Google!
Software efficiencies
When you started up your business you probably ran it using a spreadsheet or a Word document. But now you’ve filled your time and you’re trying to grow you need better to software to ensure that everything runs as efficiently as possible. Here are some things that I use in my businesses:
Marketing – I use Active Campaign as both my CRM (customer relationship management system) and to email things like this top tip to our clients and prospects. Active Campaign links to forms on our website and to our scorecards.
Process management – Minerva Accountants has lots of beautifully repeatable processes so we use Bright Manager (formerly Accountancy Manager) to manage those processes, client documents, file client emails (so anybody on the team can see all the communication), and automated reminders. My coaching and consultancy business has fewer repeatable processes but it is much smaller so I manage my to do list on Trello
Cash collections – as far as possible we use recurring monthly invoices on Xero and collect payments through direct debit using Gocardless. Any invoice on Xero is automatically fed to Gocardless and, when payment is made, the receipts are matched to the invoices on Xero. Clients can also pay by card using Stripe which also matches the invoices. These save hours of debt collection time and bookkeeping in a small business.
Collaboration for the win
I’ve been working away in the frozen North aka Manchester. On one of the days I had a break between speaking engagements so I borrowed a desk from another forward thinking accountant, the lovely Stuart Hurst. We exchanged a few ideas on how we could each improve our accountancy businesses and look after our clients better.
Collaboration beats competition every time.
Who do you collaborate with?
The beauty of integrated apps
As you know I’ve just been on holiday. We stayed in 3 different towns/cities on the edge of the map! I had to download three different German maps to my satnav in order to drive a total of about 5 hours.
This made me think about how wonderful it is to use integrated applications for business (because I often think about my business when I’m not busy working in it!)
We are a Xero based firm so there are over 1,000 integrated apps available in the official app store and other unofficial ones too. The ones we use most are:
Gocardless – raise an invoice in Xero and it automatically collects the direct debits and matches the payment to the invoice so it saves bookkeeping time too.
Dext/Hubdoc – clients can scan/photograph/email invoices to upload them into Xero (also QBO or Freeagent) where they, or we, can do their bookkeeping. Dext is the most expensive but saves much more time with their OCR (optical character recognition) and machine learning changing the roll of the bookkeeper to checking rather than typing.
Clarity – this is a big hit with clients as we can help them to see their numbers in a simple format and decide how they want to grow their business. The software uploads the latest info from Xero (also Sage or spreadsheet) so that we can discuss the current situation and improvements. It then helps to prepare an action list for the client.
These are the most valuable integrations that we use. What do you have on your list?
Tax tip
Payments on account can add a large chunk onto the amount of tax that you have to pay. If your income is likely to be lower next year than this year then it may be worth reducing your payments on account and we sometimes do this for clients who are winding up their sole trader business or who are going through a hard time. But BEWARE! If you reduce your payments too low and the final tax bill comes out higher then you will have to pay interest on the shortfall. This is to discourage people from reducing their payments too far.
Success is not a solo sport
I like to think that I work hard but nothing that I have achieved has ever been done alone.
Both Hudson Accountants and now Minerva Accountants owe a lot to my fabulous teams. When starting out I learned so much from other accountants and coaches who generously shared their ideas and experience.
I have used a fabulous business coach to help me clarify those ideas and apply them to my own business. And to hold me accountable for getting things done!
I’m pretty sure that my books wouldn’t have won the awards they did without the skill of my publisher gently helping me to share my expertise in my own words but also in a form that is easy for you to read.
As a parent I was fortunate that my children had a wonderful father and, although I chose the traditional female role of primary carer, he did a lot to support me.
I’m currently doing Couch to 5k for the umpteenth time to recover my running fitness after my operation earlier this year. It’s the first time that I’ve done it with a group of people and it has been great for keeping me motivated on rainy evenings.
To everybody who has helped me along the way, a big thank you.
But what can I do for you? I provide individual and group coaching sessions which have helped clients to develop award winning businesses themselves. And, for those just starting out we have free webinars each month.