Landlords with rental income over £10,000pa, ie charging rent of just £834 per month, will have to join MTD ITSA (Making Tax Digital Income Tax Self Assessment). This means that they will need to keep digital records and submit quarterly reports to HMRC from April 2024.
Speaking to friends on both the accountant and HMRC side of the project there is no sense that this date will move so I’ve been looking for some software to help landlord clients to comply with these new requirements without costing a fortune. I have a couple of possibilities that I will be reporting on over the next couple of months. I’ll be sharing the articles on social media but, if you miss them, then please do get in touch for the links.
A lot of business owners avoid increasing their prices, either because they’re worried about losing clients or because they don’t know how to go about it. Even when they know that they need to increase their prices it is too easy to procrastinate (I’m the queen of procrastination, I have all the excuses)
I’ll cover the ‘how’ in separate tips but today I want to talk about why.
We all started our business for a reason which broadly come into one of three areas:
• Build something valuable to sell at retirement
• Better work – life balance
All of these will benefit from having better prices allowing you to earn more money, increase the value of your business, or to earn more in limited time.
But the real benefit to our clients is that we will have time to provide a quality service. To do things properly and not cut corners. And to run a business that will still be around to help them in future years.
When we provide a quality service our clients benefit, they stay with us, and they refer other people to us. It’s a virtuous circle because everybody wins.
To create the business you want you need to charge the right prices.
I’m the first person to remind you that you need to work ON your business as well as IN it and I will only take on coaching clients who agree to commit half a day per week to working on their business, but I’m a business owner too and I know how hard that can be to make the time.
We’re always torn between things that earn money now and things that will earn money later such as marketing and business improvements. Not to mention that we’d like to spend some time on the things we enjoy.
I’ve written before about my default diary which includes time for marketing and my own business and personal development. I then allocate particular tasks to those slots. But if you truly want to improve your business then you need to learn to delegate and think systematically.
I love lazy marketing when I use one piece of content in different ways. I also know that my strength is in writing/recording the content and then my wonderful VA tidies it up and distributes it across multiple channels. Whether you’re reading this in our Top Tips e-news or a blog or on social media then she is the one who has put it there (with the help of some software).
My job is to prioritise getting the content out each and every week. When I tried to do the whole job myself it took four times as long so I only got around to it about once a month, maybe less.
Look at everything you do, maybe keep a rough timesheet for a week or month, then go through the list with a highlighter to see what could be delegated to the right person. Then find that right person.
Your priority should be the things that only YOU can do.
If you’re an accountant, you can find somebody else to do the accounts themselves and some of the marketing (I write a monthly content pack for accountants who don’t want to do it themselves) so that you can focus on being the face of your business. If you’d rather be the one doing the accounts, then find somebody else to manage your business. Don’t think that you have to be the MD just because you’re the majority shareholder.
To create the business you want you need to be clear on your priorities.
I work with a lot of people who are overwhelmed in their business as they have bitten off more than they can chew. When we start working together it soon becomes clear that they need to improve how they set boundaries.
Here are a few ideas I often use:
• Practise saying “no” in front of a mirror. It makes it easier to say to a real person.
• Practise saying “no” without feeling the need to offer an explanation.
• Practise saying “no” with a polite smile
• Be clear on what you are willing to do for your clients. Your engagement letter should act as a reminder to you as well as to them of what you are contracted to do.
• When a client asks for something extra tell them “yes we’d love to help you with that and it will cost £X” (fixed fee or per hour)
• Do not discount your fees. You are not a charity. If people are struggling then reduce the scope so they do more for themselves eg we provide basic bookkeeping training videos if the owner is capable of doing this themselves
• Do not provide extended credit. You are not a bank.
• Set appointments in your diary to make time to do something for yourself
• Ring up an old friend and arrange to meet for lunch or an enjoyable activity. It will get you out of the office. If you’d prefer to be alone then book a facial or a massage or plan a bike ride with a nice cake stop.
• Set an alarm for when you intend to finish your working day and then leave your laptop on your desk when you close your office door
• Stop reading this and practise saying “no”
I don’t know about you but I use social media for networking rather than selling. Like face to face networking I like to take my time to get to know somebody and find out what interests we have in common, exchange a little bit of information about our respective businesses, and to see whether we actually like each other. I’ll then arrange to meet for a coffee if they’re nearby or if we’re going to be at the same business event.
The other form of networking I’ve been doing recently is internet dating and, rightly or wrongly, I follow the same sort of format. I get to know somebody online before meeting up to see whether we get along in real life.
But both forms of networking have pushy people.
Linked In has the annoying people who connect with you only to try and sell you something, or to persuade you to give up your valuable time for a “free” software demo (hint: my time is a limited resource so it has a value). The online dating arena is full of people wanting to promote their “assets” by sending photos or wanting sex before you’ve even met for that first coffee.
Whether in business or dating, timing is everything. Please take your time to get to know people and don’t assume that people want to see the whole package before they have got to know you. A good relationship is worth investing a bit of time up front.
I’m on holiday and the town I’m staying in has all sorts of churches in the centre. But the thing that strikes me is how uninviting some of them are. I’m sure these churches would probably say that they want to welcome and encourage outsiders to come inside but that’s not the message they’re putting across.
One has a sign ‘Consecrated ground – no dogs’ which is short and to the point. Could this have been worded in a gentler way? And how many people know what consecrated means anyway?
One has a sign ‘John 3:16’ which is just a mystery to everybody apart from the initiated. Could this have been written in plain English without code or jargon?
As an accountant we’re often guilty of making people feel excluded through our use of jargon and poor communication skills. Have a look at your own business with the eyes of an outsider and see how you could be more inclusive and welcome in people who want to know more.
And don’t forget to book your holiday if you haven’t yet done so.
Several years ago I started speaking to promote my old accountancy business, Hudson Accountants. Like most people I hate public speaking but I went to a school that taught this useful business skill and, by about the third event, I felt reasonably comfortable.
Until I joined the Professional Speaking Association!
Being an occasional speaker is very different from being a professional speaker and so I felt that I needed to relearn my craft. Fortunately the PSA is really good for helping speakers to speak more and speak better and I am now a full member, a former Regional President, and I’ve been invited to speak at one of their national conferences for the second time.
Usually I speak to accountants and business owners who are more interested in my content than the way I deliver it. At the PSA my peers will (kindly) analyse the way I deliver my expertise too. It can be quite scary but I know that, if I’m brave enough to ask for feedback, they will be very helpful.
How do you make sure that you’re always getting better at what you do?
PS. If you’re new to speaking then I recommend joining your local Toastmasters or ask me about individual speaker coaches.
Both Hudson Business Advice and Minerva Accountants are paperless businesses. It feels great but, if you have a lot of paper in your business you may wish to start by becoming a less-paper business.
Look at all the ways that you handle paper in your business:
Paper in – can you get your clients to deal with you electronically through email, online portals and electronic forms etc. (Don’t forget to offer a telephone option). Ask suppliers to send their invoices electronically and use bank feeds instead of paper statements. We scan all incoming mail and file electronically.
Paper processing – try to replace paper with electronic systems as much as possible. Use workflow management software or even something simple like Trello to manage the processes in your business. Keep all your working papers electronically and look at the, on a second (or third) screen rather than printing them out. If your work involves going to site then use a laptop or other handheld devices to access your business software rather than carrying around piles of paper. Use client portals for sharing confidential documents. You can also use client portals for getting signatures or we use Signable software for ad hoc signatures.
Paper out – Use email and client portals to send information out. The only things that we send through the post are gifts.
Paper storage – You may use a DMS (document management system) or a series of folders on OneDrive or similar. If you have archives of paper information then it is rarely worth scanning these unless you are desperately short of space. You will rarely refer back to documents over a year old and few papers need to be kept more than six years. Start your paperless systems from today and dispose of your old papers as they pass their relevant date.
But it doesn’t end there. Now that we’ve reduced our paper, we’re working on reducing our digital footprint.
I am so annoyed with myself!
Last night I woke up with a brilliant idea for this article but I failed to make a note. Not surprisingly I had forgotten it by the time I woke up properly this morning.
I have the memory of a flip flop (or a thong as my Aussie friends call them which can lead to some misunderstanding). Usually when I have an idea I make a note on my phone so that I can then make sense of it when I’m properly awake. Or I make a voice note if I’m driving.
I don’t just keep ideas for articles, I also keep ideas of projects that I think will drive my businesses forward so I also keep a folder of ideas amongst my other documents. Far too many of these are on Excel as that’s my app of choice as an accountant but it doesn’t really matter as long as they’re out of my brain and stored somewhere reliable. I also used to keep a box file of paper ideas and a folder full of photos or screen shots that I want to think about properly.
Once a year I spend a couple of days pulling around 12 business improvement projects together by wading through my random notes. I then implement these throughout the year. This means that I have separate times for ideas, deep thinking, and implementing my plans.
How do you capture your ideas until you’re ready do turn them into projects?
Anyone who had to do timesheets in an accountancy firm probably remembers how much time they spent/wasted recording their time to the nearest 6 minutes. Then trying to make sure that the hours balanced. What did you do with the extra hour you worked but didn’t get paid for? And what about the 7 hours on the job that was already over budget? And then being beaten with a big stick (not literally) for dumping everything to admin.
Most businesses, with the notable exception of lawyers, now charge fixed fees rather than hourly rates so timesheets are rarely used for billing. So, what purpose do they serve?
They are a mine of management information.
That over budget client was undercharged for years because nobody was honest about how long the job actually took. One staff member took twice as long to do jobs as another because they hadn’t been trained properly. And the amount of time genuinely spent on admin justified investment in some automated systems to speed things up.
So, what is the compromise?
We keep timesheets to the nearest 15 mins with the exceptions of phones calls and ‘quick’ emails which are recorded as a minimum of 10 minutes because of the disruption to other work. If I do some work on the train to a meeting, then I may double record the time as part of the meeting time AND the job I worked on on the journey as otherwise it would have had to be done in the office.
This means that I know roughly how much time (our most expensive resource) is spent on each job so I can ensure that our fixed fees cover this as well as a share of the automation and overheads. What I really need is reporting by exception. What jobs are taking significantly longer than expected so that I can see what the holdup is and how to improve. This doesn’t need 6-minute reporting. And it doesn’t need a timesheet balanced to the official working day.
Before implementing timesheets think about WHY you want them and make sure that they will give you the information that you need. You may find that the recording process doesn’t need to be too onerous. I use the Xero project app on my phone, but Toggl is another free resource.