What You Should Know About Your Taxes as a Business Owner

As a business owner, corporate tax issues will be part and parcel of your routine and one of the main  tasks that your accountant will have. If you are a director of a limited company, the tax issues responsibility falls on you. You have to make sure that the business’s tax issues are in order and that the tax liability is accurate. This also includes ensuring that HMRC is paid on time.

What is Corporation Tax?

Corporation tax is based on limited companies and their taxable income or the profits they make. As the owner of one you need to calculate this yourself and you need to pay the amount to the Inland Revenue without an assessment beforehand. The payment date is 9 months and 1 day after the due date of the business and this is usually the very last day of the accounting period itself.

The good news is that this tax rate will be cut from 20% to 17% come 2020 according to the government. The accounting period cannot be more than 12 months for this tax and it is usually the same financial year that your business’s annual accounts fall under. The duration also has an effect on your deadlines and filing your tax returns.

You can check your accounting period by logging onto the online service for HMRC and by checking the dates there. Once your business is registered for Corporation Tax, the HMRC will send you a letter for your exact accounting period.

What is Value Added Tax?

Value Added Tax or VAT is tax that is based on the consumption of certain services and goods that are accumulated through each stage of distribution and production. In other words, most services and products that come from a business will be accountable for this tax. The standard VAT rate is 20% but this can change according to the business you have. You should register for VAT if:

  • The total value of taxable supplies or services within 12 months is more than the registration threshold (which amounts to about £85,000).
  • If the forecast value of said supplies in the next 30 days or so may be more than the threshold.

The amount includes not only the profits you gain but also the amount that is being spent on the business and going through it. The returns have to be submitted online and the good news is that any and all liabilities can be settled electronically.

AK Book-keeping can help you with all of that and more.  We are based in Peterborough and have been in the book-keeping business for decades.

If your paperwork is taking you away from things that should have your undivided attention, then you know who to turn to. Allow us to manage your books so that you can manage your business with little or no distractions. Satisfaction guaranteed!

 

Call Les’ Hotline: 07732090847

Email: Les@akbook-keeping.co.uk

www.akbook-keeping.co.uk

Please share this information with other business owners if you found it helpful.

 

Payroll Management – Best Practices

 

 

 

The greatest asset for any organisation is its personnel or staff. This makes payroll management the most important task for Human Resources. However, it is also quite complex since it has to be completely accurate and efficient at the same time.

Besides ensuring each employee gets the exact amount they earned, payroll generation should also comply with employment regulations and help maintain morale at the same time. In order to ensure it is rolled out with minimum disruption, the following best practices should be considered:

Examine timekeeping protocols regularly

Paying employees overtime accurately is a legal obligation making classification crucial. In order to ensure no well-deserving worker is left out, you need to assign positions to all active employees as well as contractors and consultants, if applicable. These will help you manage payrolls efficiently, and that includes tax requirements.

This is necessary if your company gets audited in the future. If your employees are not classified properly or they were not paid the amount they were due, your business can incur costly financial penalties that may also land you in court. You can prevent this by ensuring that all of your employees account for the time they work and ensure changing job duties are also accounted for. Plus, if audits are not held regularly, you might end up overpaying some and underpaying other employees.

Outsource payroll

If you do not have the time or resources to take care of payroll matters yourself, engage someone who will. Rather than assigning it to someone in-house, you can offload all of that work by outsourcing it. That includes processing the pay period data and signing and printing paychecks, among other payroll tasks, all without disregarding taxes.

A payroll service that is outsourced keeps regular tabs on government rules and regulations that go into the payroll process. This includes keeping abreast of changes which a growing business might overlook for other, more important matters.

Prevent employee time theft and hold regular audits

Even if you think that your employees are loyal, chances are some will try to fool the system by misusing work hours. An integrated attendance system that keeps track of their breaks and when they sign in or out at the end of the day can help prevent this. It will also calculate all of the hours worked for each employee and provide an accurate payroll.

All manual and automated processes such as the payroll management should also be audited on a regular basis, or at least once a year, to check for errors. Even a minor one can make your payroll askew and compromise final payments. Promotions and salary increments may also not be provided on time which can have a serious effect on employee morale.

The best way to ensure all of the best practices are observed during payroll preparation is to hire professionals who have years of experience in the matter. AK Book-keeping can guide you better and assign an accountant for you who will ensure your payroll is accurate and is deployed on time.

 

Call Les’ Hotline: 07732090847

Email: Les@akbook-keeping.co.uk

www.akbook-keeping.co.uk

 

Please share this information with other business owners if you found it helpful.

 

What Motivates Businesses to Seek Bookkeeping Services?

 

What is the final straw for business owners to seek bookkeeping services?

Businesses require book keeping services for a variety of reasons.  They start managing their accounts at home until they realise they need outside help.

Here are some reasons why businesses finally decide to give the responsibility of managing their books and payroll to a bookkeeping service:

The Mismanagement of Accounts

Do your books close on time?

Do your books close on the same date each month?

Would you know what to do if your in-house bookkeeper handed in his/her resignation?

Do your accounting personnel manually manage data using more than one system without synchronisation and integration?

If you answered “yes” to any of the questions above, you have real problems on your hands. You need to have all of your accounting processes automated, with your books done in a timely manner. If your accounting personnel lacks experience in managing accounting software and processes, your business is in deep trouble.

Unable to Forecast Budget

Is your accounts receivable aging (AR) report not updated?

Do you know what your annual business forecast looks like?

Can you predict what your business’s expected future sales will look like by looking at the revenue data?

If you answered “yes” to the first question and “no” to the subsequent questions, you are standing on thin ice. It is important for businesses to be able to forecast their budget and cash flow without hesitation. If you cannot answer the question with confidence, hiring a bookkeeper is one of the best decisions you could make for your business.

Accounting Systems Do Not Sync

Is your accounting system capable of executing a certain feature, but your team doesn’t know how to execute it?

Do you use Microsoft Excel to perform the majority of your bookkeeping?

Do you use paper to monitor time and expenses?

Do you encounter problems when performing time tracking, expense management, payroll, job costing, etc.?

If you answered “yes” to one or more aforementioned questions, your accounting processes are not synchronized with each other. It takes too much time to draw up reports and perform bookkeeping duties in general. Unsynchronized accounting systems may make you overlook an error.

A way around this is to outsource your business’s bookkeeping services.

 

Inaccurate Financial Report

Do you know the exact profit margin?

Have you been able to incorporate job costing?

Do you often find several errors on your profit and loss (P&L) statement?

If you answered “yes” to these questions, you need to re-evaluate the direction your business is going in. This is especially true for business owners that do not know why their balance sheet is showing errors.

Did your business fit into any of these categories described above? If it did, you need to seek us out. We provide professional bookkeeping services to businesses in Stamford, Peterborough, Cambridge and Huntington and we can accommodate clients throughout the UK.

 

If you found this information useful, please share it with your friends.

Call Les’ Hotline:  07732090847 for help with sorting out the best system for your accounting and payroll operation.

Email: les@akbook-keeping.co.uk

Click here to learn more about our book keeping services or here to contact us.

Cutting Costs: Big Savings for Small Businesses

Is your business facing cash flow problems?

Are you looking for ways to bring down your operational costs?

Here are 4 tips to help you get there:

Track Your Inventory

Stocking inventory ( more than is actually needed) is a common mistake almost all small businesses make. Hoarding inventory ties up your working capital in addition to increasing your storage and holding costs.   The results of this? Cash flow crisis and an ever increasing amount of operational costs.

What do you do about it? Exercise the principles of Economic Order Quantity (EOQ) to minimize your inventory costs. Also, keep an eye on the slow moving and/or dead stock. It is often better to sell them off at discounted or scrap prices rather have them dumped in the warehouse for nothing. As they say: Something is better than nothing!

Think Green

Yes the environment needs your business to be friendly with it, but it’s your business that benefits more when you go green. Using recycled products, energy efficient lights and fixtures, and turning off all equipment at the end of the workday can save your business a lot of money in a year’s time. Also, try creating a paperless work environment. It will give the trees another day to live and help you streamline your cost-cutting process better.

Make the Most of Your Credit

Most small businesses use corporate credit cards for business transactions. This is where choosing the right type of business card can cut down major costs by a margin. For example if you have to travel frequently for your business, a corporate credit card that offers frequent flyer miles will save you airfare costs. Pick a credit card that offers reward points for cash back or discounts relevant to your business to save money.

Keep an Eye on the Accounts Receivables

If you allow credit sales, there’s a fair chance that a good amount of your working capital is tied up in unpaid invoices. This may lead to cash flow problems if you do not devise a system that helps you collect timely payments from customers against your outstanding invoices. The ideal situation would be not to offer credit sales, but if you do, you need to make sure you have a proper debt collection process that keeps the cash coming in. This will save you the need to apply for working capital credit or loans, which bring additional finance costs along with them.

Even if you choose only a couple of methods out of these, you can give a substantial money makeover to your small business. These tips can help you make your business more profitable and efficient in the long run.

For professional help with handling accounts and taxation, get in touch.

If you found this information useful, let us know! Feel free to share it so others can benefit too.

Click the video link below to meet Les Wells of AK Book-Keeping

Video of Les

 Email: les@akbook-keeping.co.uk

 

Tips for Effective Payroll Management in Small Businesses

 

 

 

 

Are you tired of trying to effectively manage and streamline your payroll process?

Payroll is a complex task for any company, and for many small businesses owners it is probably something that takes up an inordinate amount of their time, yet still isn’t as good as they would like it to be. Here are 5 useful tips to help you deal with your payroll system better,:

Get Payroll Software

Probably one of the smartest things you can do is to invest in good payroll software. This will automate the entire process, and make managing payroll much less complicated for you. From generating pay slips to calculating taxes, these software and apps are smart enough to make your life easier.

 

 

Xero for Payroll Management in the UK

 

Details. Details. Details.

Whether you’re doing it manually or using payroll software, when managing payroll, you need to pay special attention to employee details. The process of collecting and recording employee details can be time-consuming and cumbersome – so you obviously want to get everything right in the first place.

From joining dates, to date of birth, and change of address – your record needs to be accurate. Sloppy errors in this process will create further trouble and waste a lot of time too.

Follow Up With the Payroll Legislation

Payroll is regulated by law. Any changes in the payroll-related regulations may impact the way you calculate, process, and manage your payroll system. Hence, it is extremely important to stay updated about the major laws governing payroll.

You will also be required to keep abreast of taxation laws. These laws deal with the benefits and employee tax rates that change frequently. You may not have to get into the nitty-gritty of these laws, but it helps to be informed about them when managing payroll.

Train Your Payroll Staff

You can purchase sophisticated payroll software, but it won’t be of much use if your payroll staff don’t know how to use it.  Then what do you do? You invest in training your staff. Enroll them for short, flexible training courses that help them become familiar with and learn how to operate the software efficiently. This will save you a lot of time.

Plan for the Rainy Days

For small businesses, it is often difficult to keep the working capital flowing. Hence, it is important for you to stay on top of your credit control system. It becomes inconvenient when you have to chase customers for your payments that are already overdue, because you pay your employees when your customers pay you.

There are times when these things don’t go as planned. Your customers default or the payment gets delayed due to unforeseen circumstances. Save yourself the embarrassment and maintain a surplus fund to pay out salaries on time.

A great solution for small businesses to immediately take control of their disorganised payroll process is to consider outsourcing it to the professionals. They will make sure your payroll is processed timely and the necessary documentation is in place, without hampering the routine operations of the business.  It really can be false economy not to call in an experienced outsourcer.

For professional help, get in touch. If you found this information useful, let us know! Feel free to share it so others can benefit too.

 

 We can offer you more guidance on handling your payroll efficiently when you call Les’ Hotline:  07732090847, les@akbook-keeping.co.uk.

Startup Finance – 5 Fantastic Alternatives to Bank Loans

 

 

Have you considered these options for financing your business?

loans

For the majority of aspiring entrepreneurs, bank loans do not qualify as a feasible finance option simply because they do not offer enough to secure the borrowed amounts. With lack of initial capital to start a business, how are new entrepreneurs supposed to incubate their ideas and grow thriving businesses?

Here are 5 financing alternatives to bank loans that new entrepreneurs can look into.

1. Venture Capital

Venture capitalists usually invest in a particular industry. They put their money to help kick-start and boost new businesses that exhibit high-risk and high-growth potential. This channel of business finance is ideal for businesses that have a solid exit strategy with a fast-growth plan – these startups can obtain substantial amounts through venture capital to grow and network the business.

2. Invoice Factoring

Funding is not just required to start a business. One needs finance to keep the business running. Invoice factoring makes sure small businesses have the working capital they need to keep the business operations running smoothly. An invoice factoring service usually pays an upfront amount on billed out invoices. This amount can then be returned when the business actually receives payments for the same invoices from their customers. So even with the outstanding invoices, the business does not come to a halt.

3. Crowdfunding

Another interesting way to raise finance for your newly established business is through crowdfunding. Sites like Indiegogo and Kickstarter pool small amounts contributed by various investors into an investment pool that can provide a boost to small businesses seeking finance. This ultimately eliminates the need for businesses to look for one single investor willing to invest a big amount of money in the venture.

When picking a crowdfunding site, make sure you thoroughly read their fine print and know the terms and conditions applicable to the arrangement.

4. Government Grants

Startup businesses can also explore the variety of government grants available for promoting small businesses. These are usually unsecured, cheap loans that don’t require payback. This makes them a great medium of raising finance for startup ventures. The only catch with these loans is that the qualification criteria are quite stringent. Since these grants are far and few in number, one needs a robust business plan to be eligible for one.

5. The Incubators

Incubators act like nurturers for small, newly established businesses. They provide businesses with necessary facilities and office space on a shared basis. Incubators are usually funded by a private equity fund. In addition to the office space, facilities, and monetary finance, incubators offer seasoned mentors (industry experts and entrepreneurs) to promote group communication and learning.

Normally, incubators continue to support small businesses for as long as they wish to stay in it. However, once a business grows enough to sustain and prosper on its own, they can move out and set a pace for a solo flight. Incubators can be great financing options for businesses looking to build networks, obtain finance, and jumpstart their enterprise.

Setting up a startup business can be challenging. However, once you have the finances sorted out, you could opt for professional help to make things easier for you.

For professional help, get in touch. If you found this information useful, let us know! Feel free to share it so others can benefit too.

 

We can offer you more guidance when you call Les’ Hotline:  07732090847, les@akbook-keeping.co.uk.

 

5 Compelling Reasons to Hire an Accountant for Your Tax Matters

Why you should engage a professional accountant.

Tax is complicated. Filing tax returns can prove to be a stressful and traumatic process when you’re not aware of the process and the laws and regulations that govern it. In most cases, owners of small and medium businesses don’t know much about tax. This creates a number of problems for the business and the owners.

There is a simple solution to these problems – hiring a professional accountant’s services. However, most business owners are reluctant to do that, mainly because they are unaware of the following advantages that an accountant offers:

tax

 

 

1. They Know the Laws and Regulations and They Comply

The HMRC has a detailed set of compliance requirements for all businesses and tax payers. Often new businesses are unfamiliar with them or the way to navigate them. The accountant knows the law. They know what HMRC wants and requires and what’s the best possible way to get that done to honour compliance and legal requirements. It’s their job. It’s what they do best, and as a result of their expertise you don’t have to worry about it  a moment longer.

2. Reduced Tax Liability

No, we are not referring to any sort of tax avoidance or tax evasion. A professional tax accountant can counsel you on tax efficient methods of business operations. This can allow you to save a considerable amount of money that is otherwise paid as tax to HMRC. With their expertise they can advise you on the most efficient use of tax incentives and business support schemes given your business’ current circumstances. They can help you understand the tax process better and save you money through that knowledge, too.

3. Tax Planning

Tax planning is important. It is this planning that allows a business to keep up with its tax obligations through efficient utilisation of the resources available to it. The accountant can help your business with proper tax planning. This may include making arrangements with the HMRC for deferred payments in times of difficulty or setting aside tax money for later payments when the cash flows are healthy.

4. You Know Exactly Where You Stand with the HMRC

When your taxes are being handled by an accountant, you can count on being up to date with your tax obligations. This includes payments, filings, refunds, and even accuracy. There are times when HMRC makes mistakes too. These mistakes might not be obvious to business owners, but accountants are trained to check for and organise the business’ taxes properly.

5. Saves Time

Tax isn’t easy to understand. Although HMRC provides comprehensive guides to help taxpayers understand the system – they are much too detailed for small business owners to spend a large amount of their time reading and understanding them. That time could be better spent on ironing out business plans and growth strategies instead; and that is possible when you have a professional tax accountant handling your tax affairs.

Whether it’s personal tax returns, tax calculations, submitting VAT returns or other business taxes, a professional accountant is your best bet for a worry-free solution.

For professional help, get in touch. If you found this information useful, let us know! Feel free to share it so others can benefit too.

We can offer you more guidance when you call Les’ Hotline:  07732090847, les@akbook-keeping.co.uk.

 

Launching a Start Up Business?

Launching a Start Up Business? Spare a Thought For These!

Is this the first time you’ve tried to set up your own business?

Whether the answer to that question is ‘YES’ or ‘NO’, there are certain things you need to know about start up businesses. The life of an entrepreneur is more or less like a roller coaster. There are highs and lows to it, but the best part is that it all comes with valuable lessons. Start up businesses that succeed – there aren’t many – are usually the ones that learn from their experiences.

Establishing a start up business in Huntingdon, Peterborough, or somewhere else in the UK is a not an impossible feat. The process is rather simple. However, before you get to the process of setting up a new business, there are a number of things you need to iron out and these include:

The Business Plan

There is a common misconception among amateur entrepreneurs that a business plan is only good for obtaining finance. While obtaining finance is one of the main objectives of drafting a business plan, it is not the only thing you need it for. You need to understand that starting a business requires a vision that ultimately converts into a series of goals your business sets out to achieve, but without the path that leads to these goals, how do you plan to accomplish them? It is easy to come up with an innovative business idea – however, unless you can execute the idea well you don’t stand a chance of succeeding. Your business plan is the execution strategy that maps out your route to achieving your goals.

The Focus

Having your focus on the right things is crucial. You can’t be operating a business in 2016 based on the market principles and business strategies you succeeded with back in the year 2000. Business environments and industry dynamics are forever evolving. You need to keep abreast with the latest developments and integrate them into the structure of your business to keep it focused and steady – and you need to do all this before starting the business. Focus on one industry, one market niche, and one product/service when you begin. Once you get a strong foothold in the market, there will be plenty chances to diversify!

The Anchors

A number of start-up businesses employ friends and family in key positions in the business. They’re the ones you trust most and there’s no harm in that. However, the same family and friends may at times become anchors that weigh you and your business down. For example: you hire your best friend to manage your accounting and bookkeeping. A few months into the business you realise they have begun taking the position for granted and are proving to be a bad fit. What do you do? You pull the plug and look for better alternatives like a professional bookkeeping service!

As minor as these considerations may seem – they matter. Time and again they have proved to be the difference between a successful start up and one that couldn’t survive even as long as the first 5 years.

Let’s not sugar coat it. The idea may seem intriguing and the process may be efficiently handled with professional assistance, but setting up and running a business is not everyone’s cup of tea. It requires resolve and commitment; above all it requires the drive that forces you to stand up after every fall.

For professional help, get in touch. If you found this information useful, we’d love to know! Feel free to share it so others can benefit too.

If you are in a start up situation and need some questions answered call Leslie Wells for personalised, professional advice. Call Les’ Hotline: 07732 090 847 to get in touch with him.

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Auto Enrolment – Work Based Pensions

If you are an employer with just one member of staff you will be required by law to offer a work based pension. Whilst there are rules for delaying and opting out, the majority of employers will need to set up a scheme within the next year. As most small companies are finding out, this is a complex process with some strict deadlines set by the Pensions Regulator. There are initial fines for missing the date set for your scheme to commence, known as the “Staging Date.”

I have been astounded by some fees being charged by Accountants and Brokers for providing a service to set up a Pension based scheme. A leading payroll provider is charging a flat fee of £1,500 and I know of clients that have been approached with fees of £1,000+. In addition the regular payroll costs are also being increased significantly. The best advice if you know your staging date is to allow sometime to obtain quotes from various sources and avoid a costly, last minute panic.

We are taking a sensible approach to help our customers with fees significantly less than the market rates. Providing good service, meeting deadlines and taking away the headache from the employer. If you have been advised of your staging date and require help, then please get in touch.

New website for AK Book-keeping.

Today we are launching the new website after many weeks of development from Chadwick Design and ourselves.

Also special mention for Nikki Hassock in creating our new, innovative and fresh logo.

A big thank you to everyone that has contributed to the design.

Archives

Testimonials for AK book-keeping

Electronics online retailer

Our decision to choose the services AK Book-keeping and Payroll Services has turned out to be a really important enabler to the growth of our business and has delivered us fantastic value for money. Their accuracy and efficiency in compiling our accounts and payroll documents has allowed us to focus on the things which we do well and add real value whilst removing the distraction of unwanted and complex administration work. I would recommend them without hesitation.

Chris

AK Book-keeping
2015-10-23T16:25:46+00:00

Chris

Our decision to choose the services AK Book-keeping and Payroll Services has turned out to be a really important enabler to the growth of our business and has delivered us fantastic value for money. Their accuracy and efficiency in compiling our accounts and payroll documents has allowed us to focus on the things which we do well and add real value whilst removing the distraction of unwanted and complex administration work. I would recommend them without hesitation.

Carpet & Lighting retailer

Now that we have AK Book-keeping doing all our tax returns, wages but to name a few, we have more time to focus on the business and a lot more leisure time

Simon & Cathy

AK Book-keeping
2015-10-23T16:26:07+00:00

Simon & Cathy

Now that we have AK Book-keeping doing all our tax returns, wages but to name a few, we have more time to focus on the business and a lot more leisure time

Multiple Franchise Owner

I Periodically review my resources (like any business should) and on each and every occasion I have decided to retain AK Bookkeeping’s services. It’s one of those business I know I can depend on.

Bob

AK Book-keeping
2015-10-23T16:44:40+00:00

Bob

I Periodically review my resources (like any business should) and on each and every occasion I have decided to retain AK Bookkeeping’s services. It’s one of those business I know I can depend on.

John – Building Company owner

We engaged AK Book-keeping some two and a half years ago, from the outset their communication has been excellent. We were provided with a schedule of monthly costs and a clear indication of what was included. To date we have had no reason to consider changing from AK Book-keeping as their service has been reliable, efficient and cost effective.

AK Book-keeping introduced us to Xero accounting system from the outset and for a reasonable monthly fee we benefit from all the Xero facilities available and have access to view our account, use data and monitor our performance and it is all relatively simple. We would recommend AK Book-keeping and the Xero system.

John

AK Book-keeping
2016-02-05T16:33:23+00:00

John

We engaged AK Book-keeping some two and a half years ago, from the outset their communication has been excellent. We were provided with a schedule of monthly costs and a clear indication of what was included. To date we have had no reason to consider changing from AK Book-keeping as their service has been reliable, efficient and cost effective. AK Book-keeping introduced us to Xero accounting system from the outset and for a reasonable monthly fee we benefit from all the Xero facilities available and have access to view our account, use data and monitor our performance and it is all relatively simple. We would recommend AK Book-keeping and the Xero system.