Tag: business owner

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She made me cry

Last week at Accountex somebody made me cry. 

I was heading into the restaurant in my hotel for a quiet dinner and somebody recognised me and followed me in. With minor celebrity status (more Z list than A list) in the accountancy world I’m used to people stopping me because they’ve read one of my books or seen me speak. 

This time they wanted to thank me for an encouraging comment that I had made when she first set up her business in 2019. A single comment that I made to a stranger and she still remembered it 7 years later. Words really do have power! 

As an author I love the precision of words and deliberately dwell on the exact vocabulary to express my meaning as accurately and concisely as possible. But I’m not so careful when I’m just chatting, in person or on social media, as those words are very much ‘in the moment’.  

As a mother I was aware of the way that words can build up or tear down my children. Usually after I’ve said the wrong thing! 

As a boss I need to remember to take time to thank my team for the good job that they do looking after me and our clients. I’m often busy and just spit out instructions without thinking of the  human impact.  

We use words in our marketing all the time and our tone of voice, as well as the words themselves, allow readers to imagine themselves working with us … or not. 

So, today, I encourage you to look at the words that you use. In seven years time will somebody be thanking you or recovering from a damaging throw away comment that you have made while feeling stressed about something completely unrelated? 

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Keep your bookkeeping up to date! 

This is the single biggest thing that you can do to minimise tax and penalties. If your records are up to date you will:

  • know when you need to VAT register so no late registration penalties
  • know how much tax you are likely to need to pay so you can squirrel it away long before the due date so no late payment penalties
  • know how much profit after tax is available to take as dividends so no penalty tax on overdrawn directors’ loan accounts (DLA)
  • have up to date information to ask your accountant for advice before you make any major business (or life) decisions

Frankly, I’m sick of being asked to help directors out of a hole long after the time has passed for action. Whilst I might sympathise, I can do much more if provided with basic information and consulted early rather than having to refer clients to HMRC for a Time to Pay arrangement after the event when we are finally given information to START preparing the accounts.

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Minerva Momentum Review 

To keep your business moving forwards (without the faff). 

The Minerva Momentum Review is a sharp, monthly business check‑in for owners who want progress, not another report they’ll never read. 

In 30 minutes we boil your business down to one page: 

  • 3 key numbers that actually matter 
  • What’s going well, what needs attention, and what’s quietly shouting for help 
  • Clear actions, with names next to them (because things only get done when someone owns them) 

No jargon. No waffle. No 40‑page management accounts destined for a drawer. 

This review keeps you focused, accountable, and looking forwards, not just backwards at last month’s numbers. It’s structured enough to be useful, relaxed enough to be human, and designed to keep momentum going month after month. 

Think of it as a regular business MOT; quick, practical, and far cheaper than fixing things once they’ve broken. 

One page. Three KPIs. Clear actions. Real movement. 

Contact to book yours.

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How to improve profitability without cutting costs

1.Increase average order value – cross sell to existing clients. What else do you offer that they could use? (This could be the case for business advice sessions or our monthly Minerva Momentum Reviews) 

2.Improve client retention – it is always cheaper and easier to retain your existing clients than to go out and win new ones. Stop the leaks before you try to fill the bucket. 

3.Upsell to existing clients – who has grown and is now in a position to upgrade and take on a new level of service? 

4.Reduce scope creep – be clear on what is included in your contracts. Anything extra should be charged BUT make clients aware of this beforehand so they don’t get any nasty surprise. Every request for extra work should be greeted by “Yes and … that will cost £X” 

5.Improving operational efficiency – with so much technology and AI around there is plenty of opportunity to improve your internal efficiencies allowing you to take on more work without impacting on your existing clients. 

6.Pricing strategy tweaks – don’t forget that increasing prices is the single most effective way of increasing your profitability (but do make sure that you’re still providing sufficient value) 

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Building a business that doesn’t depend on you

Whether you want to make your business more profitable, scale up, have a better work-life balance, or to make your business more saleable than you need a business that is less dependent on you.

If you can’t go on holiday for a week without having to keep an eye on your emails, then your business is too dependent on you.

This isn’t about abdicating your responsibilities and letting your business go haywire, it is about delegating your day-to-day involvement in the business. When I sold my first accountancy practice, I achieved 32% above average because the business wasn’t dependent on me. It might not grow without me at the helm, but it definitely wouldn’t collapse. Everything was delegated to a competent team, reliable software and repeatable processes.

Yes, this takes work.

  • Designing and refining repeatable processes that will produce the best results again, and again, and again.
  • Investing in software and setting it up so that your business is less dependent on humans as experts, including yourself.
  • Hiring or outsourcing strategically where you need the human touch.

I love helping business owners to design all this for themselves. To date every business owner (accountant or otherwise) who has come to me for help in preparing their business for sale has ended up liking it so much that they’ve kept the business for a few more years as they’ve been able to work part time hours.

So don’t wait until you’re ready to sell to create a desirable business! Get a coach and get your life back.

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Why every small business needs business advice 

Times are tough at the moment and small business owners don’t know where to turn. Those who are fortunate to have an accountant who already provides business advice have a headstart on their competitors. The real value of a good accountant goes far beyond ticking boxes, filling in forms, and meeting deadlines. This is the basic service that we offer our ‘Essentials’ clients in return for a ‘no frills’ fee.

Business is advice is more than just tax advice! Business advice is about improving profitability, growth, and work-life balance. More and more of our clients are asking us for additional advice sessions throughout the year.

It’s not just about preparing management accounts that nobody bothers to look at but about sharing ways that will improve the business. An accountant can explain what the numbers mean, highlight trends, and identify issues early. I’m not just an accountant and an entrepreneur myself but am also a qualified Coach and Mentor so at Minerva Accountants, we are able to provide so much more than just financial advice.

Business advisers can play a vital role in strategic planning and decisions such as pricing, hiring staff, investing in equipment, raising finance, expanding into new markets or just growing your share of your current market. And they have an open book of contacts when it’s time to call in experts.

Why wouldn’t any small business take advantage of business advice from their accountant when times are tough? And why aren’t more accountants able to offer this advice?

In short, business advice from accountants is not a luxury for small businesses, it’s a strategic asset. By working with an accountant who focuses on understanding the bigger picture, small business owners gain clarity, control and confidence. Compliance keeps a business legal, but advice helps it to grow, even through tough times.

If you’re looking for support in this area, we have a few options for you:

👉 Business Advice & Part-time FD Services 

👉 Coaching and Mentoring for Business Owners 

👉 Minerva Clarity Review and Business Advice

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Eating out (just you, not entertaining)

The rules are different for sole traders and for companies. 

Generally sole traders can NOT claim for eating out. Eating is not ‘wholly, exclusively and necessarily for the purposes of business’ because it fulfils the dual purpose of keeping you alive! 

Employees of limited companies can claim if the meal is wholly and exclusively for business purposes. If business reasons require them to be away from home/office around meal times (so that they are unable to make their usual arrangements) then it is a reasonable business expense.  

The amount they can claim for a meal will be agreed with their employer but should not be overly lavish and I would suggest limiting alcohol to one drink with the meal. 

Entertaining is generally not allowed (see other Tax Tips on staff entertaining) for tax or VAT purposes.  

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Companies House carnage 

What a week it’s been with confidentiality issues at Companies House following on from weeks of confirmation statement failures back in November and problems with accepting personal ID numbers for directors.

We try to stay on top of all these deadlines with reminders to clients on top of all those from Companies House themselves but it’s not easy and, whilst we haven’t let down any clients yet, I have encountered problems with my own companies. Yes, as an entrepreneur as well as an accountant I run two other businesses alongside Minerva Accountants.

Having requested that all directors verified their personal ID by 18 November last year we’re still chasing in some clients in order to submit their confirmation statements. Even where we don’t submit confirmation statements we will soon need these in order to submit accounts.

The latest round of personal ID verifications is for PSCs (Person with Significant Control) but, for some unknown reason, it was not possible to add these to the confirmation statements that we have already submitted. Instead there is a 2 week window for each company at some seemingly random time of year.

And this is what has caught me out.

On 10 March I received an email reminder to ID myself as a PSC on one of my companies. Great, I’m all ready to enter my number BUT my window isn’t until April so it’s going to sit in my inbox until then. I’m pretty sure that half our clients will lose this email when their window comes. Good thing they’ve got Minerva Accountants looking after them!

Yesterday I received a letter for another of my companies forwarded from my old home address saying that I had missed the window to ID myself as a PSC. No idea what happened to the original letter/email and why they sent it to that address when I carefully updated everything at Companies House at the time and have even submitted a confirmation statement. The letter was fierce but toothless and just gave me an extension so no real problem but something clearly isn’t working.

Basically, if the system isn’t easy for somebody like me who is used to compliance, then small business owners don’t have a hope!

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How to prepare for a stress-free year end

The best time to prepare for a stress-free year end is nearly a year ago. Trite but true.  

But we are where we are so what can you do now? 

  • Make sure that all invoicing is up to date 
  • Make sure that you collect as much cash as possible from your clients. (See other articles on improving your cashflow and credit control procedures).  
  • Write off old, uncollectable debts to understand the true financial position 
  • Upload all purchase bills (next year you can start to add Hubdoc, Apron, or Dext so that you can do this as you go!) 
  • Chase the team for expenses 
  • Check for any draft sales invoices or purchase bills and either process them fully or delete them if necessary. 
  • Check for old, unpaid bills. Are these genuinely waiting to be paid or the result of a duplicate entry? (This often happens if the bank account is reconciled before uploading bills 
  • Reconcile the bank account (we hope you do this regularly anyway!) and chase VAT receipts for all payments 
  • Run a P&L by month and look for missing expenses each month such as 11 rent or software payments instead of 12. (Xenon Connect or Dext Precision software is great for this) 
  • Reconcile payroll to the accounts. Salaries should agree to payroll summary reports and balances owed to HMRC should agree to the business tax account 
  • Reconcile the final VAT return to the accounts and the business tax account. This is easiest if the VAT period is aligned with the year end. You can change your VAT period online in the business tax account. 
  • Review the Directors’ loan accounts (DLA) to make sure that they’re not overdrawn (and remind directors, yet again, not to keep helping themselves to company cash without declaring proper dividends!) 

Doing this early, and regularly, will help to make the year end easier. 

While you’re at it why not consider regular management accounts to provide a true financial position BEFORE directors draw money out of the business? It would save the company so much money on overdrawn DLAs leading to S455 penalty tax and tax/NI on P11D beneficial loans. 

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Understanding the gap between profit and cash

Lack of cashflow is the number one cause of failure in small businesses. Even profitable businesses still run out of cash. This can because they’re not forecasting their cashflow requirements properly as they grow (See our webinar on How to Scale Without Cashflow Chaos https://youtu.be/hmPssYUINWY?si=8nRJW-KGaAQfZRQy ) 

But sometimes businesses are busy tracking the wrong thing. Your profit and loss is only one of the reports that you should be looking at regularly. This doe not show: 

  • Timing differences between invoicing and payments 
  • VAT and corporation tax due to HMRC are big lump sums that still seem to surprise some business owners 
  • You might also have cash tied up in stock, work in progress and other uninvoiced work, and prepaid costs 
  • Directors, loan accounts often accumulate an overdrawn balance when director/shareholders help themselves to cash and call it ‘dividends’ without carrying out the necessary solvency checks beforehand. 

Ideally you should have a proper cashflow forecast and there is software that will connect to Xero (and other software) to help you to do this for yourself, or with our help.