Small Business Matters

Take the Intuit financial fitness challenge

Intuit is searching for 300 small businesses in need of a fitness boost as it launches the latest in a series of government-supported training workshops.

The workshops will take place in Liverpool as part of Global Entrepreneurship Congress (GEC) – the largest gathering of start-up champions in the world. More than 400 businesses have already benefited from Intuit’s financial fitness workshops since they were launched in November 2011.

Intuit's financial fitness initiative was devised in response to figures from the Office for National Statistics which revealed that one in three businesses do not make it past their third birthday. 

Intuit’s own research into early-stage businesses, the Three-year Glitch report, highlighted that poor financial management is one of the key contributors to business failure and that getting to grips with their finances early is vital to the success of startups.

Get your business financially fit

Intuit is offering 300 places to small and early-stage businesses to take part in the next series of workshops, hosted in Liverpool on 12 March as part of GEC2012. 

Intuit, makers of QuickBooks desktop and online accounting software and one of the main sponsors of this year’s GEC, will host three workshop sessions throughout the first day of the GEC. The free-to-attend workshops offer unique opportunities for regional businesses in and around Liverpool to shape up, with practical advice and training on the key aspects of financial fitness, including:

• Invoicing and being paid
• Tracking income and expenses
• Managing cashflow
• Handling VAT and other taxes

Is it the right time to hire?

Perhaps surprisingly given the current uncertain economic climate, small firms are still busy hiring – a recent survey found that nearly 75% of UK SMES plan to recruit in 2012.

Hiring staff is always a big decision but it’s something you’ll need to consider at some point if your business is to grow. There are a range of options you can consider to balance the need for an extra pair of hands with business risks.

If you’re thinking of hiring this year, consider the points below to make sure you get recruitment right first time.

Predicting demand

If your business has been facing a sustained level of demand in the area that you wish to hire (or if you have secured a long-term contract for services), you know that you should have a reliable stream of work so it could make sense to hire an employee on a part-time or full-time basis, depending on the amount of work available.

If you have good reason to believe that the work will last for more than a year, then you may be in a position to offer a permanent contract.

Taking on your first permanent employee is a big step – you’ll have a number of new responsibilities, including abiding by employment laws and registering with HMRC as an employer. It may seem daunting but there is lots of support and information available as well as tools (QuickBooks payroll software, for example) to help you manage your responsibilities much more easily.

It’s also an investment in your business – good people make a business work and once you find talented people you’ll want to keep hold of them.

Alternative options 

If you find that the demand for the services in question tends to increase and decrease unpredictably, then it still may be the right time to hire - but perhaps on a more flexible basis. You should be looking to use people who can be recruited at a moment's notice, who can hit the ground running, and who can be let go quickly if demand wavers.

You could consider:

Five essential invoicing tips to help you get paid faster

If you don’t raise an invoice, you won’t get paid. Invoicing should not be seen as a back-office administrative nuisance. Rather, it is a vital first step in achieving healthy cashflow.

Can you answer yes to all these questions?

• ­ Do you raise an invoice immediately after you have supplied the goods or service?
• Do you make sure that everything the customer requires appears on the invoice?
•  Do you have an effective accounting system and have you considered using dedicated accounting software?
• Do you have a process for investigating and resolving disputed invoices immediately after the query is raised?
• Do you log the details of disputes so you can fix any avoidable root causes?
• Do you keep documentation relating to disputes as evidence in case the problem escalates?
• Do you keep a record of the customers that dispute invoices so you can spot any who do so regularly as a way of avoiding prompt payment?
• Do you ensure your sales invoices are fully compliant with HMRC requirement for VAT if you are registered?

Five top invoicing tips

1. The sooner you ask, the sooner you can get paid; send invoices by first class post or, better still, by email.

2. Get invoices right first time; raising credit notes and reissuing invoices takes up resources and time better spent elsewhere. It also changes the payment due date.

Use QuickBooks Online? Refer a friend and you can both earn £25 in Amazon vouchers

If you are a current QuickBooks Online customer, you can now refer friends and get rewarded with £25 in Amazon Vouchers.

Both you and your friend can earn these rewards but be quick as the offer ends on the 25 February 2012. 

For more details click here  

Enjoy your vouchers!

How to make sure your employee records are correct for your Employer Annual Return

HMRC has launched a new online video to help employers reduce the problems caused by inaccurate employee data.

Every year, HMRC receives thousands of employer returns, containing the details of millions of employees, including names, dates of birth and National Insurance numbers. While the vast majority of the employee data is correct, HMRC says that in some cases dummy, incomplete or incorrect information is included.

For example, a recent study of employer returns found that 128 staff were entered as Mr, Ms or Mrs Dummy, while 824 employees had the surname “Unknown”.

Another 40 employees, according to their dates of birth, were aged over 200. Many other employees had their forenames and surnames swapped around, or their first names replaced by initials, which can make it more difficult for HMRC to identify the individuals.

This new video discusses how inaccurate employer returns can affect employees, employers and HMRC, and offers advice on what information is required and how employers can help reduce errors.

Jim Harra, HMRC’s Director of Customer Operations, said:

“It’s really important that employers get their employees’ information right, so that HMRC can match it to the right tax records. Otherwise, it can lead to more contact from staff, trying to sort out their tax, and from HMRC, trying to sort out the data issues."

HMRC has also launched two free webinars which you might find useful:

Any advice for our small business lonely hearts?

By Anthony Teasdale

February 14th. An otherwise ordinary day at perhaps the least appealing time of the year is transformed into a festival of enormous pink balloons, teddy bear greetings cards and the sort of restaurant bills that would make Michael Winner think about doing a runner.  Such is Valentine’s Day. 

Despite the advent of online dating, lonely hearts ads still have a certain charm and online and in the press, the personal ads are full of people looking for love and romance. There are plenty of small business people desperately searching for something too. 

Here are some of the best… (OK, some we made up just for fun):

Looking for a LTR

Disorganised businessman, with my accounts in a mess WLTM accounting software that creates invoices, monitors cash flow, manages VAT and tracks sales and profit. I’m looking for a long-term commitment.

Best match? Naturally we recommend QuickBooks. You can even try it free, no strings attached!

Cashflow king

Lovely, trusting business with great product wants to prosper in a relationship with customers and suppliers but keeps getting stung by cashflow. So before I get intimate again I need to know that you’ll pay me when you say you will – I don’t want to do all that work and then have to extend my overdraft again. If you tell me the truth then we can form a flexible relationship but with businesses settling their debts an average of 26.1 days late, I have to be cautious.

Best match:  Someone signed up to the Prompt Payment Code should be interested in going steady.

Let's talk

New business-owner working from home seeks company from likeminded souls for friendship and possibly collaboration. Let’s swap advice and information and chat online.

Understanding Profit - It’s not as obvious as you might think

This post is by John Sollars, serial entrepreneur and MD of online printer ink supplier, Stinkyink.com.

I started my first business back in the 80s when you had to prepare your books and VAT reports manually using day books and cash books. Because of the complexities of double entry bookkeeping I felt that my accountant was talking to me in double dutch. A modern accounts system is simple and you should be able to understand your profit and loss with ease. 

Mind you, when I watch entrepreneurs presenting on Dragons' Den and they don’t understand the difference between net and gross profit, I really wonder if they are capable of running a business. These are the most basic of financial performance figures which you need to understand, yet even experienced business people are often unclear on their differences. Read on for a quick-and-easy breakdown of what they mean and why they’re important.

NB: I always quote profits before tax.

Gross Profit

What is gross profit?

Gross profit is simply your business revenue minus the cost of creating your goods/service. If you sold a desk for £80, and the materials for the desk cost £60, you have made £20 gross profit.

Calculation: Revenue − Cost of goods

Remember: Gross profit comes BEFORE deducting things such as wages and rents. It is purely the direct cost of your sale.

So what is gross profit margin?

In our previous example, our desk sells for £80 and made £20 profit, giving you a gross profit margin of 25%.

Calculation: ( Revenue − Cost of goods ) / Revenue

Remember: Gross profit margin is simply your gross profit reported as a percentage of revenue. If Product A and Product B both made £10 profit, but cost vastly different amounts to produce, you’d want to know the difference! 

What does gross profit show?

Gross profit itself shows very little except how much money, before overheads, you make on each product/service you sell. Gross profit margin is the important figure, as it shows how efficiently your company uses its supplies. 

QuickBooks tips and tricks: Quickly Into QuickBooks -Three top tips for getting started

This post is by Loredana Stroup, author of QuickBooks for Dummies 2012 (UK edition). She also runs Alta Training, a QuickBooks training and support company.

If you’re starting or running a small business you’ll know how important it is to have an accounting system in place in order to meet legal obligations and to be able to see quickly the financial health of your business.

QuickBooks is accounting software which helps you do all this and more. It’s an excellent choice as the foundation of your accounting system because it’s so easy to use and affordable.

As an expert QuickBooks user, these are my tips for getting up and running with this accounting software smoothly and quickly. You’ll be using it with ease and reaping the benefits in no time if you follow this guide. 

Make time

QuickBooks will actually save you lots of time in the long run but you need to make some time at the start to get things set up right. The process is quite simple but you’ll need to leave time to find all the information you need, install the software and then work through the set-up process.

Once you have all the bits you need to hand, set aside a morning or an afternoon for your set-up session, although you may need somewhat more or less time depending on your requirements. Rest assured that you’ll more than recoup this time investment once the accounting software is working for you.

Transactions, not features

QuickBooks does lots of exciting and useful stuff but don’t be overwhelmed when you first get started. The best way to do this is not to focus on all the features floating before your eyes but instead to concentrate on the transactions that are relevant to you.

In short, you need to work out the transactions that need to be recorded for you to keep adequate records.

If you’re a one-person consulting business you might only need to figure out how to record three types of transactions:

QuickBooks Online updated: What’s new?

We’ve introduced some exciting new updates to QuickBooks Online.

The new features are:

Income List and Copy Estimate

Your feedback is important to us and thanks to some valuable customer input, we’ve added some great new features.

The new Income List lets you view, sort and filter all your invoices, estimates and sales receipts in one place. You can also print and email these forms as well as packing lists.

You can now also easily copy all the information on an estimate to another estimate.

Customers > Estimate > Copy button

Change Your Accounting Scheme

Now you can change your VAT accounting method from cash basis to standard VAT accounting.  As your business grows, HMRC requires you to use standard VAT accounting to report your VAT.

(Available in Essentials and Plus only)

VAT > To Do List > VAT Accounts > Change Basis

Purchase Orders

We’ve added purchase orders to help you keep track of what you’ve ordered and what you’ve received (available in Plus only).

Here are a few things you can do with purchase orders:

• Email a purchase order directly to a supplier
• Copy it to a bill, cheque, cash or credit card transaction
• Create a template for recurring purchase orders
• Track open orders by supplier or product and service

Company > Preferences > Suppliers & Purchases > Purchase Orders

Not using QuickBooks online yet? Try it now for free. 

Do you have any feedback or requests for improving QuickBooks Online even more? We’re all ears!

 

February tip: Get professional advice

As part of our monthly calendar tips, our tip for February is:

If you don’t already have one, get an accountant and talk to them about financial management.

To find a QuickBooks ProAdvisor in your area, visit quickbooks.co.uk/february

Here’s why:

You’ll save time and stress

Successful business owners know it's best to focus on what they’re good at, rather than struggling on with something they could pay an expert to do better in half the time. Time spent tearing your hair out over tax forms is time away from doing what you do best – running your business and generating income.

Even if you’re comfortable filling in all the relevant paperwork yourself, with an accountant you’ll have the peace of mind that you’ve filled in everything you need to and that you’ve filled it in right. If you make a mistake you’ll certainly be asked by HMRC to correct it, taking more of your time. However, in the worst case scenario, a tax inspector may want to look over all your financial records