Business Hints & Tips

Business Tip #70 – Director’s duties under company law

Directors are appointed by the shareholders of a company to run the company on their behalf. For many companies the directors and shareholders are the same people; however where they are not it is important to realise that the appointment is one of trust and that they are to act…

Business Tip # 69- Reading for profit

I was at a business event recently when someone came out with the phrase ‘leaders are readers’. At first I dismissed this as just another bit of slick corporate-speak, but actually the more I thought about it the more it made sense. Just as that the old adage ‘knowledge is…

Business Tip #68 – Understand the past to manage the present

Getting to grips with the business finances on a day-to-day basis may seem like an impossible task to some, particularly with early-stage enterprises. But as time goes by the business will develop a track record, a history of data that can be used to help understand what is happening on…

Business Tip #67 – Shareholders Agreements

The main rules for how a company is run are set out in the Companies Act and in case law decided by the courts. However these rules are a framework that all companies have to work within, whereas a shareholder agreement can be designed to suit the particular circumstances of…

Business Tip #66- Making Tax Digital

The government is introducing some of the biggest changes to the tax system since Self Assessment came in more than 20 years ago. The current proposal is that this will be phased in from April 2018. But what does it mean? For business owners, Making Tax Digital will mean digital…

Business Tip #65-Understand your balance sheet 4 – Capital

In our final look at company balance sheets we turn to the Capital section, which is found at the bottom of the balance sheet. As a reminder, the balance sheet sets out ‘where we’re up to’ in monetary terms. It is often described as a ‘snapshot’ of the company finances…

Business Tip #64 -Understanding Your Balance Sheet – Part 3 Liabilities

As mentioned previously, the Balance Sheet sets out ‘where we’re up to’ in monetary terms. It is often described as a ‘snapshot’ of the company finances on a particular day and separates the businesses assets and liabilities at a given date. Broadly speaking, liabilities are amounts owed by the business…

Business Tip #63 – Understand Your Balance Sheet 2 (Assets)

As mentioned previously (Business Tip 61), one of the least-understood sections of the business accounts is the Balance Sheet. If you think about the Profit & Loss account as ‘telling the story’ of the business from a financial point of view (what’s come in, what’s gone out and what’s left…

Business Tip #62-HMRC & Emails

As we know from the news, cyber attacks seem to be forever on the increase and there doesn’t seem to be any sign of this changing. With this in mind it’s worth repeating that if HMRC owe you money, they will never inform you by email, only ever by post.…

Business Tip #61-Understand Your Balance Sheet (Part 1)

One of the biggest problems with accountancy is ‘accounts speak’ and one of the least-understood sections of the business accounts is the Balance Sheet. So what is it and what does it do? The Profit & Loss account is easier to understand. It shows all of the incomings and the…

Business Tip #60-NATIONAL MINIMUM WAGE – TRAPS FOR THE UNWARY

The National Minimum Wage (NMW) hit the headlines recently when the owner of a well-known sports goods retailer was quizzed by MPs. It turned out his company had been breaking the law because his staff should have been paid while they were waiting to be searched on leaving the warehouse!…

Business Tip #59-KEEP YOUR STAFF COOL

With the British summer you never know what’s round the corner: one minute it’s cracking the proverbial flags and the next… well who knows? But on the rare days when it is hot productivity can drop as workers wilt in the heat. In the UK there isn’t a maximum work…

Business Tip #58-HOW TO MAXIMISE THE VALUE OF YOUR BUSINESS

As we’ve looked at previously (see FAQ #57 2016) businesses are usually valued using two components It’s earnings potential It’s balance sheet value To maximise the value of your business you need to be showing good figures for both of these. Earnings are relatively easy to understand – it’s the…

Business Tip #57-Buying a Business – What to Look Out For

Caveat emptor – Let the buyer beware – is one of the oldest principles in English law and basically means that it is up to you as a buyer to make sure you know what you’re getting. Over the years we’ve developed a complicated set of consumer regulations to protect…

Business Tip #56- Working Out the Return on your Property Investment

At first glance this is quite simple. Let’s say you charge £750 per month rent, or £9,000 a year, on a £150,000 property. The return (or yield) is 9,000/150,000 = 6%. But in reality this is only the yield you will get if you are buying the property outright and…

Business Tip #55 – Understand your processes

Every business has processes, from the smallest to the largest. And they’re not confined to manufacturing companies with production lines, it is every operation that a business performs, from answering the telephone to filing a VAT return. The key to the success of McDonald’s is that every process for every…

Business Tip #54 – Valuing Your Business

If you’ve ever seen Dragons’ Den on TV then you will know that one of the entrepreneurs’ pet hates is contestants over-valuing their businesses. A typical scenario is a start-up business demanding £100,000 for a 10% share of the company. The stunned dragons ask how they have arrived at a…

#53 – Get Tax Relief Early

We are well into 2016 tax year now and with many businesses having a 31 March year end it may be time to do some pre-year end tax planning . One of the simplest but most effective steps you can take is to bring expenditure forward. It’s not a case…

#52 – Cloud Computing: What are the Pros and Cons?

Using ‘cloud computing’ simply means storing data and running applications over the internet rather than on your computer’s hard drive or a local server. This may seem like the latest craze, but email services like Gmail and Hotmail have been doing the same thing for years. Using the same principle,…

#51 – Five Steps Towards Better Cash Flow

December and January can present cash flow issues for many businesses, particularly with the Christmas break and tax bills on the horizon! So here are five steps to help you get cash in that little bit quicker

#50 – Profit is Profit. Right?

Yes, but some profit is better than others. For example let’s say your business has two products, ABC and XYZ. If A generates £500 profit and X earns you £200, on the face of it selling more ABC than XYZ makes more sense. But what if A takes 20 hours…

#49 – Paying HMRC

Paying HMRC recently got much easier with the launch of a new section on the .Gov website. Now instead of trailing through many pages of the old site to find the relevant link for your particular tax, they’re all accessible through one page https://www.gov.uk/topic/dealing-with-hmrc/paying-hmrc There’s also information about when you…

#48 – Alphabet Shares

When most people think of shares in a private limited company, they think of Ordinary Shares. Ordinary shares give the holders certain important rights – rights to income (dividends) rights to control (voting rights in a general meeting) and rights to capital – the value of the company if it…

#47 – Investment Readiness Workshop

Our Business Tip this month comes in the form of a workshop offered by Access to Finance Northwest. A full day Investment Readiness Workshop will give you the opportunity to: Find out more about writing a business plan and forecasting for business growth. Talk to Access to Finance specialists about…

#46 – Free Information from Companies House

Companies House have, as promised, launched a newly updated version of their website through which data held on UK companies and their directors is now available free of charge. This provides access to over 170 million digital records including: Financial accounts Company filings such as annual returns and allotments of…

#45 – Small Company Accounts – all Change!

There’s a new accounting regime coming in for small companies from next year – so anyone with an accounting year starting on 01.01.2016 or after, this affects you! So what’s changing? For many years now small companies (turnover below £6.5million) in the UK have prepared accounts under the Financial Reporting…

#44 – Tax on Electric and Hybrid Cars

Company cars have always been seen as a perk for employees, but can end up being very expensive. For owner managed businesses it is generally more tax effective to keep the cars out of a company and charge for mileage undertaken. With Electric and Hybrid vehicles, however, the picture is…

#43 – Overtrading – The Dangers of a Growing Economy

Spring is in the air and the economy is growing. So the feel-good factor is all around? Maybe not totally but at least the darkest days are behind us and many businesses are putting expansions plans into place. A growing business means more jobs, greater wealth, greater prosperity. But a…

#42 – Plan Your Exit

Every business owner at some stage will reach the point at which it is time to exit from the business. This could be many years into the future or just around the corner; either way it is never too early to start thinking about this important event. Here are the…

#41 – Why Wait Until January to Deal With Your Tax Return?

As you will know from reading this newsletter the deadline for filing a self assessment tax return is midnight on the 31st January! The tax year end is the 5th April of the preceding year.  So for the year ended 5th April 2014 the deadline for filing your tax return and paying the…

#40 – Crowdfunding

Crowdfunding is a simple concept – it’s about spreading risk associated with raising finance between numerous individuals. The practice has grown over recent years and is becoming more widespread through internet platforms such as Crowdcube, Funding Circle and Funding Tree. In a nutshell, it works by putting businesses in touch…

#39 – Protect Your Business’ Intellectual Property

The main types of Intellectual Property (IP) are patents, trade marks, copyright and designs, but it can also cover things like databases, website domain names and trade secrets. Most types of IP are owned automatically by whoever creates it. If an employee creates the IP in the course of his/her…

#38 – 21 ways to make a great first impression

Firstly, is making a great first impression of that much importance? Surely we are judged on what we do (the usefulness and value of the service we provide and the problems we solve)? Yes, that’s how we’re ultimately judged, but we have to be invited to perform our service before…

#37 – Personal Guarantee Insurance

Personal Guarantees (PGs) are usually required when a limited company borrows from a bank or other lending institution, with little or nothing to offer as security in return. In these circumstances the company directors stand as guarantors for the loan should the company be unable to repay the debt. This…

#36 – Don’t Hide Your Light Under a Bushel

 If you’re good at your particular trade or profession, or have acquired a niche that sets you apart, tell the world about it! This may go against the grain for many of us reserved Brits, but in business it’s important to stand out in a crowded market place. After all…

#35 – Fraud Prevention

Invoice fraud in the UK is said to cost the economy over £150 million, and the criminals are targeting businesses more and more as government departments become increasingly difficult to attack. A recent event run by Barclays Bank gave some useful and practical tips to help business owners protect themselves…

#34 – Write a Will

It’s a common misconception that writing a will is both expensive and unnecessary: after all ‘my wife/partner/kids will get everything automatically, right?’ Well maybe and maybe not. If you die without making a will the law dictates who gets what and in what proportions. For example, if you are married/in…

#33 – Sticking to your plan!

There’s a saying in business that goes ‘failing to plan is planning to fail’. It’s been around for years but still holds today. But having a plan and sticking to it just for the sake of it, or flogging yourself to death to reach unrealistic targets, are just as bad…

#32 – Research & Development – It’s Not Just For Boffins!

When most business owners think of Research & Development they picture men in lab coats peering down microscopes and assume that it doesn’t apply to them. But there’s a great number of businesses that are missing out on these significant tax breaks because of this popular misconception. R&D is all…

#31 – Strengthen Your Balance Sheet

In last Month’s Business Tip we looked at the Balance Sheet and how it shows a business’ financial standing at any given point in time, usually the year end. If you have a limited company, this Balance Sheet, along with some other information, is what is published at Companies House when…

#30 – The Balance Sheet – What’s it all About?

Unlike the Profit & Loss account, which shows incomings and outgoings for a whole period (usually a year), the Balance Sheet gives information as it was at a particular date in time (usually the Year End). So if the balance sheet date is 28.02.2014 then the balances shown will be…

#29 – Get Tax Relief Early!

We are well into 2014 now and with many businesses having a 31 March year end it may be time to do some pre-year end tax planning. One of the simplest but most effective steps you can take is to bring expenditure forward. It’s not a case of ‘spending some…

#28 – Business Plans – What Should They Include?

With the end of the year approaching, many people will be taking time out to look at their business plans for the coming twelve months. But what should a business plan include? Here’s a quick guide to putting a plan together for a twelve month period. 1. The Big Picture.…

#27 – Five Steps Towards Better Cash Flow

December and January can present cash flow issues for many businesses, particularly with the Christmas break and tax bills on the horizon! So here are five steps to help you get cash in that little bit quicker. 1.  Invoice early/on time. If you finish a job at the beginning of…

#26 – Exporting to Foreign Markets

If you’re thinking about selling goods or services abroad and don’t know how to go about it, or are already exporting and need advice on practical issues, the Government has a special department specifically to help you. Called UK Trade & Investment (UKTI), it exists to encourage both outward exports…

#25 – HMRC access debit & credit card details

With effect from 3 September 2013 HMRC can, under new powers, access data from the companies that process card payment transactions. The number and value of transactions made by a specific trader in the last four years can be provided and HMRC will cross check the information to identify tax…

#24 – A Simpler Basis For Preparing Your Accounts

As previously reported in our June Newsletter (see here) HMRC have relaxed the rules whereby certain traders are required to use the accruals basis for their accounts preparation and have permitted the use of the cash basis instead. But what are the differences? The Cash Basis. As you would expect, income and expenditure is recorded…

#23 – Holiday Pay & Seasonal Workers

If you employ temporary workers over the summer, they are entitled to holiday pay just like every other worker. Employment law states that workers have an entitlement to a minimum of 20 days paid holiday a year (including bank holidays). So, if your employees work for 13 weeks in the…

#22 – The Difference Between Gross Profit & Net Profit

Gross Profit (GP) is the profit before overheads are deducted, where as Net Profit (NP) is after. In calculating GP you only need to know what your Sales and Cost of Sales (ie purchasing stock, materials etc) are. When you have calculated your GP, you can then deduct all of…

#21 – Make Sure Your Staff Have The Appropriate Training

If you have staff in your organisation, how often do you get frustrated with them because they can’t perform what to you is the simplest of tasks, resulting  in wasted time, effort and often money? These scenarios also de-motivate and frustrate the member of staff too. This is particularly the…