It’s not that we don’t like you. Far from it. We like to serve people where we can provide the most value.
At Hudson Business Advice we only choose clients in certain industries and who have the time, resources, and motivation to implement any agreed actions. We don’t like people to waste their money if they’re not going to do anything. But we also want you to succeed in having the business you first dreamt about as I get my real reward seeing happy business owners with time freedom and financial freedom. (Yes, I do cry real tears of joy when that happens)
At Minerva Accountants we use a lot of automation to operate as efficiently as possible so that clients have up to date management information to make informed business decisions. We can’t provide the sort of service I’d like for people who aren’t tech savvy. We can help them a little bit but will often refer them elsewhere.
Similarly we encourage you to be picky about your own clients so that you can run your business more efficiently without trying to be all things to all men.
Work out who your ideal client is (have a look at your current best clients) and focus on finding more of these by creating valuable content and resources for them.
An unlimited market?
In accountancy there seem to be far more businesses than good accountants and it is possible to take on unlimited clients (assuming you had the resources). So why wouldn’t you?
Because you want clients suited to YOUR business.
You want clients from the industries you know well and that will fit well into your processes. This will enable you to provide a better service with your enhanced knowledge.
You want the clients who fit you personally so that you enjoy working together. This will enable you to provide a better service that you enjoy.
You want the clients who can afford your fees. This will enable you to provide a better service as you won’t have to take on too many clients all vying for your time.
Keep an eye on your client list and your fees to ensure that you can provide high quality work.
The ‘Icarus’ budget
I set up my first business with the intention of doing a few sets of accounts from the kitchen table to fit around my kids. But my background BC (before children) was running larger businesses and, if you do the right things, you get the right results. I needed to decide whether to limit my activities or to deliberately grow the business which would entail taking on staff and premises.
In the meantime somebody talked me into running the Bristol and afterwards, high on endorphins, I wrote my ‘Icarus’ budget. Yes, I really did name it that as I didn’t know if what I was planning would be achievable on just 25 hours per week (because I still wanted to fit it around my kids)
The rest is history*. Stay off the endorphins kids, you never know what might happen ?
What would you do if you were feeling brave?
*If you haven’t heard the story then ‘The Numbers Business: how to grow a successful cloud accountancy practice’ is available on Amazon and Audible
Collaboration for the win
A while ago our local post master observed my kids spending their pocket money and reported back to me. Apparently they figured out that if they pooled their money they could get a big packet of sweets between them which was even better value. Collaboration for the win!
Years later, when they were old enough, he gave each of them a job as soon as he had a vacancy. Watching their behaviour over the years had given him some idea of how they would get on with customers.
In our business we rely on each member of the team using our different skills collaboratively to provide the best service to our clients.
But it’s not just internally that we work together. We extend our support to clients’ bookkeepers. They can contact us through the year with coding or other queries. In return we benefit by getting neater records coded as we like them so the year end is faster. Sometimes we get early warning of areas we can advise our mutual client. We’re always happy to explain any year end adjustment journals so that Xero (or other software) records are better each year.
We also work with software providers to ensure that any new software is properly set up to give both year end and management information. Or with IFAs and mortgage advisers to provide the best information to help our mutual clients with nonbusiness finances.
How could you collaborate with others to increase the size of the pie?
Is it your husband’s business?
When I set up my first business in 2009, I lost track of the number of times that I was asked whether it was my husband’s business or mine!
Initially I ran the business from home in order to be available for my small children. But it didn’t look like a typical house because it was a former Post Office where we had two rooms set aside for me and my staff.
When we reached a team of 5, we had to move out to commercial offices in the next town in order to grow further. This had the benefit of a large meeting room where we could host our Money Matters events and Xero training courses. (It was also above a Domino’s which was great when the whole team got together for our monthly lunch and learn sessions) With larger premises and running events I was clearly the public face of the business, and nobody asked about my husband anymore.
Since I sold that business in 2017, I have started 3 more businesses, all of which operate remotely with no permanent office space. The Money Matters events are now a series of monthly webinars to help business owners and the Xero training is also online.
Once again people are unable to judge the size of my business from any physical premises. Now I get all sorts of subtle questions probing for how big the team is. (In case you’re curious Minerva Accountants currently has a permanent team of three people plus regular and occasional sub-contractors but watch this space)
How do you think your business is perceived and what can you do to change that?
Should I be a limited company?
There are all sorts of reasons for incorporating and most of these are unchanged but two things have changed or are about to change.
1.Corporation tax increases combined with National Insurance reductions mean that the level and which it is tax efficient to incorporate have increased to around £100k* profits
2.At the moment small companies do not have to publish full accounts at Companies House. In future they will need to show their profit and loss account. This means that sensitive commercial and personal information will be in the public domain. For sole directors their salary will be available for anybody to see.
There may still be reasons, tax and otherwise, why business may choose to trade through a limited company so personal advice is more important than ever.
*This is a guide and the actual level still depends on individual circumstances.
What is a Clarity review?
We try to encourage all our business clients to have regular Clarity reviews. These can be monthly, quarterly or annually depending on the size of the business.
- We connect their Xero or Quickbooks to Clarity HQ software which analyses 7 key indicators that reflect profitability, productivity, and value of the business.
- This shows where their business is NOW
- We discuss where they want to be on each of the 7 indicators in the next 12 months
- We come up with an action plan on how to get there
- We have regular check ins to help them work through their actions. This is where Della’s business experience and coaching come in
- We celebrate clients getting closer to their goals
- We repeat with enhanced goals
It’s all about constantly moving forward
Tax Tip
Client gifts are not usually tax deductible. Here are a few simple rules to ensure that you can claim them
- They can not be food, drink, or tobacco
- They must be under £50
- They can not be cash or cash equivalents eg gift vouchers
- They must carry a conspicuous advert for your company
Free samples of your products are usually acceptable
10 questions business owners should ask their accountant
- What was my turnover this month? How does it compare to previous months/years/budget?
- What are my main sources of income and how can I grow them?
- What is my gross margin and how does this compare to others in my industry?
- How much cash do I have in the bank? How much do I need to pay out in the next week/month?
- What is my working capital and how can I improve it?
- How much tax (corporation tax, VAT, PAYE) do I have to pay and when?
- What are the key financial ratios that I should track and why?
- How can I collect money from customers faster?
- What is the best accounting software and processes for my business?
- 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?
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?