A few weeks ago I had quite a heated debate with Richard Murphy on the issue of cash accounting for small businesses. As he opposed that idea, I - and others - asked him to put forward an alternative solution, as the one point we all agreed upon was that the tax regime for small businesses is in dire need of simplification.

Further to a posting by Mike Truman on the Taxation website

Richard has responded and his article can be found here

In summary, Mike and Richard suggest that micro businesses (with a turnover under the VAT registration limit and not registered for VAT) could have the option to work out their taxable profit by:

1) Adding up the sales for the year, figure x

2) Taking a fixed percentage of sales according to what trade sector the business operates in, figure y

3) x - y = taxable profit.

This to me has advantages over cash accounting. It is less open to manipulation and teeming and lading, would be simpler for HMRC to work with since they would set the trade sector percentages, and would be very easy to work out, with far fewer ifs and buts. Also there would be no transitional arrangements since a business could easily use the simple method one year, and switch to preparing full accounts for the next - similar to when a business has to stop using the VAT flat rate scheme.

This simple method wouldn't suit all micro businesses, but for those which don't want to grow and expand but just want to tick along quietly and earn enough to run the home, and/or one man bands selling their services (interior designer, party organiser, web site designer, plumber, taxi driver, etc), I can see serious advantages.

I would though, recommend a safeguard be put in place to ensure that businesses still keep records of sales invoices, purchase invoices, cash received and spent (as in the Winweb cashbook), so that they keep track of potentially late- or non-paying customers, and make sure they have enough cash to pay bills.

Views please?

M

Tags: Accountants/CPAs, Accounting, Business Infrastructure

A note from the Revenue to its staff tells them to "use your common sense"…

A client of ours has recently moved.  VAT know that we’re his accountants if only because we’ve been working with them on a long-drawn-out query.  But a letter from us and a phone call from the client, while they’re enough to have his Return sent to his new address, aren’t enough to change the address on VAT’s system.  They have to have a signed letter from the client.

He’s already sent this in but they haven’t received it.  So either it’s gone astray in the post, or else it’s been filed in someone else’s in-tray and forgotten about.

Common sense has also been filed in someone else’s in-tray and forgotten about, it would appear!

Tags: Accountants/CPAs

I was on a course yesterday called “Small company reporting requirements”.

The amount of red tape and paperwork that even a small limited company needs to keep up with can be mind-boggling.

Now that the tax savings from being a limited company are not so significant, many smaller businesses (with profits under £50,000 per year) may decide not to become limited companies, to avoid the extra admin and red-tape.

If you’re a small business owner, a discussion with your accountant may help you choose which is the best course for you:

- Stay unincorporated and reduce the red-tape burden, but pay more tax

- Become a limited company, and pay less tax and have the protection of limited liability, but have more paperwork and reporting to keep up to speed with.

For example, we have several smaller clients who have chosen not to be companies, because they’ve got young families and want to have as much time as possible to spend with their children.

It’s all about what works best for you - but if you have a limited company, be sure to take advice from your accountant and make sure you are doing your best to keep up to date with all the required paperwork.

Doing it all in a rush after the year-end is not a good idea!

Tags: Accountants, Business Development, Business Infrastructure, Business Start Up, Client Relations, CPA, CPAs, Entrepreneur, Home Business, Micro Business, Outsourcing, SBI, Selfemployed, Small Business Infrastructure, smb, sme, sme-blog, SOHO, Teleworking, United Kingdom, VAs, Very Small Business, Virtual Assitants, VSB

It is not only my believe that the accountant has a prominent SME role to play, as a trusted financial and business advisor.

A 2004 survey by Sage Heartbeat revealed that just under 50% of small accounting firms have 500 active business clients, with an average turnover of a staggering £1.7 million.

In total the SME market in the UK comprises of about 3 million companies with a combined turnover in excess of £1.152 trillion.

This is certainly a staggering market place for approximately 22.000 small accounting firms, but what kind of service do the accounts provide to their clients?

In my discussions with accountants it is obvious that they would like to spend more time with clients on planning, for-casting and analyzing. Especially the smaller end of the client spectrum needs this kind of support from accountants, due to the lack of dedicated and qualified in-house personnel.

For the SOHO business other “quality” advice sources are often difficult to come by. In my personal experience the so called “Business Advisors from Business Link” can do more damage than good. General statement like “You need to do a business plan.”, are all well and good, but who is going to explain how to do a cash flow for-cast. The advisors I invited to “advice” me certainly could not do that.

Around 50% of business start-ups fail within the first 12 month. Is this due to bad products or services? I don’t believe so, all you have to do is go along the high street and you are surprised at what kind of business can survive long term. I think in most cases it is bad or disastrous financial management and planning.

So why are many accountants not stepping up to the plate and get stuck in? They are uniquely qualified to solve these often very simple problems and educate their clients, this would also benefit the practice long term.

Tags: Accountants, AIA, Business Development, Business Infrastructure, Business Link, Business Mentoring, Business Start Up, CIMA, CIPFA, Client Relations, CPA, CPAs, Entrepreneur, Home Business, ICAEW, ICAI, ICAS, IFA, Micro Business, Sage Accounting, SBI, Selfemployed, Small Business, smb, sme, sme-blog, SOHO, Very Small Business, Virtual Assitants, VSB

I am very proud to announce a new contributor for my blog, Emily Coltman. Emily is a qualified accountant working for 5-director firm Cannon Moorcroft Ltd in High Wycombe, Bucks.

She qualified 3 years ago and since then has developed a strong interest in using accounts software to help small business clients keep their records with as little worry as possible.

As a result of talking to Jason Holden, she became interested in SaaS, trailed WinWeb and Cannon Moorcroft have now signed up to be Gold Partners themselves.

Emily is apparently delighted to receive my invitation to join this blog and looks forward to talking to lots more small businesses and users of WinWeb.

I am looking forward to her contributions and hope you will enjoy them as much as I will.

Tags: Accountants, Business Mentoring, Cannon-Moorcroft, Client Relations, Entrepreneur, Holden Associates, Selfemployed, Small Business, smb, sme, sme-blog, SOHO, Teleworking, Very Small Business, VSB, WinWeb, WinWeb AccountsOffice , WinWeb CashBook, WinWeb OnlineOffice

After spending a couple of hours on online support on Saturday and Sunday, following our new Plug-in CashBook (find Demo here) release, you may be mistaken to believe that I was helping my customers to use the new plug-in. That of course is true in a fashion, but most of all my clients helped me to sort out the obvious marketing nightmare I had created.

In my last post about CashBook I said it needed AccountsOffice+ or OnlineOffice. You may know that AccountsOffice is free of charge, and as promised it will stay that way. Following the “online support” I received over the weekend here are the changes I have decided to implement:

• WinWeb CashBook will be a standalone product from tomorrow.
• Anyone can sign up for it from our website and use it.
• Some browser issues will also be resolved.
• WinWeb CashBook single user version will also be free.

Another great idea, I had from one of my “new” accountant partners, was to use WinWeb CashBook, even for those “plastic bag” accounting clients who do not want to get involved, on a in-house basis. What that means is the accountant or bookkeeper will use an admin person to enter the receipts into WinWeb CashBook and then the accountant / bookkeeper will process the entries. This will be a big time saving for the professional part of the work, allowing the accountant/bookkeeper to service more clients.

Every day when I do online support, I think I get more out of it then my clients, and that is not only because I “suck” at giving support! Thank you everyone!

Tags: AAT, ACCA, Accountants, Accounting, AIA, Bookkeeping, Business Development, Business Infrastructure, Business Mentoring, Business Start Up, Cash-Flow, CIMA, CIPFA, Client Relations, CPA, CPAs, Customer Service, Entrepreneur, FREE Business Tool, Great Business Idea, Home Business, Homesourcing, ICAEW, ICAI, ICAS, IFA, IT, Micro Business, On-demand, Outsourcing, SaaS, SBI, Selfemployed, Small Business, smb, sme, sme-blog, Software as a Service, SOHO, Teleworking, VAs, Very Small Business, Virtual Assitants, VirtualOffice, VSB, Web Technology, WebOffice, WinWeb, WinWeb AccountsOffice , WinWeb CashBook, WinWeb OnlineOffice, WOW

Here is a little “something” about the SaaS - Software as a Service vendor reality. It is a fact that it takes SaaS vendor longer to break even, than an old type software vendor. But, when it happens you can do things like this:

From October 1st, 2006 all our Silver and Gold Accounting Partners will receive a 80% subscription revenue share on all clients signed up through the partner firm.

This will further enhance the opportunities for our partners to offer help and support for our SOHO clients. Our accounting partners can offer our products from any price at or below the RRP. Some may even decide to absorb the monthly fee for the marketing benefit.

While our AccountsOffice is free of charge anyway. It allows partners to offer our AccountsOffice+, OnlineOffice to clients with the additional benefits of accountant business advisor input for the client. This all includes our newly launched CashBook.

This in turn will further enhance our SBI - Small Business Infrastructure approach, by getting our partners into the SOHO businesses, with the aim to reduce mortality rate among our clients. This makes sense for the entrepreneur, our partner firms and WinWeb.

Tags: AAT, ACCA, Accountants, AccountsOffice, AccountsVision, Bookkeeping, Business Development, Business Infrastructure, Business Start Up, Cash-Flow, CharterGroup, CIMA, CIPFA, Client Relations, CPA, CPAs, Customer Service, Entrepreneur, Evenlode Network, Great Business Idea, Home Business, ICAEW, ICAI, ICAS, IFA, IT, Micro Business, Office/IT, On-demand, Online Shop, OnlineOffice, Outsourcing, SaaS, SBI, Selfemployed, Small Business, smb, sme, sme-blog, Software as a Service, SOHO, United Kingdom, VAs, Very Small Business, Virtual Assitants, VirtualOffice, VSB, Web Technology, WebOffice, WinWeb AccountsOffice+, WinWeb CashBook, WinWeb OnlineOffice, WOW

Dennis over at AccMan has put an interesting twist on a job advertisement.

The job advert is for accountancy firm Goodman Jones, who unfortunately use one of WinWeb’s competitors Twinfield, never mind you can’t always get it right (only kidding David, we all know it’s a nice product).

Dennis has rewritten, and in my opinion, very nicely humanized the advert, I wonder if this is the way all job adverts will go, a bit less stuffy….

Nice rewrite Den, I like it …. just off to post my CV, the pubs sounds great, only I see no mention of 3 hour lunches in the pub to discuss business strategy, is this an oversight?

Tags: WinWeb, Twinfield, Dennis Howlett, AccMan, Goodman Jones, Job advertisements, Staff recruitment

Damian Wild over at Accounting Age wrote about growth for accountancy firms. And as far as the big firms are concerned I agree with him. He writes:

(….) Yes, there is plenty of evidence to suggest that a slowdown is underway (comments from PwC chairman Kieran Poynter, less-good-than-previously financials from a big recruiter etc.) (….)

and then carries on:

(…) Deloitte’s chief executive John Connolly says: ‘ “Calling” the market in the year ahead is challenging. (…)

I think this may be true for several reasons. In my discussions with big firms so far I always got the “It’s our way, or the highway” for SOHOs who want to do business with them. Because of their size, the bigger firms find it difficult to deal with “all these small business needs“. In fact often they do not want to get involved, and that is very bad for SOHOs.

One other reason my be, that the large medium size market is more and more saturated. So the business that is there for the taking is not serviced correctly (IMO), and the business that could be serviced is no longer growing fast enough.

But for the small firms I see a very different picture, since the SOHO sector is largely untapped. Small firms locking after SOHOs are in for a period of growth and long term customer relationships.

Why do I believe that? Because small firms or sole practitioners are:

• closer to their clients needs,
• often more cost-effective,
• willing to offer “special” services.

For reasons of relevancy and financial importance to the accounting firm, it is also better for a SOHO to use a sole practitioner or small firm.

Tags: AAT, ACCA, Accountancy Age, Accountants, Accounting, AccountsOffice, AccountsVision, AIA, Bookkeeping, Business Development, Business Infrastructure, Business Start Up, Cash-Flow, CharterGroup, CIMA, CIPFA, Client Relations, CPA, CPAs, Customer Service, Entrepreneur, Evenlode Network, Home Business, ICAEW, ICAI, ICAS, IFA, IT, Micro Business, On-demand, Outsourcing, SaaS, SBI, Selfemployed, Small Business, smb, sme, sme-blog, Software as a Service, SOHO, Teleworking, United Kingdom, Very Small Business, Virtual Assitants, VirtualOffice, WinWeb

Following our recent agreement, Steve Checkley and I had our first working meeting yesterday. He surprised me by showing me the first customised parts of AccountsVision for WinWeb. I am happy to present:

We developed our WinWeb API just in time. We will have a fully integrated version of WinWeb AccountsVision sometime in November. Should any of our Partner Accountants wish to use the software beforehand, on a regular .csv or manual basis, please let Rachael know.

What I enjoyed even more about our discussion, was the near 100% alignment of our vision for the future. Steve worked in practice for many years, and is passionate about helping accountants to safe time and making their daily tasks more productive.

It is in this framework, that we will work together, and I am sure Steve will help us to improve our AccountsOffice from an accountants point of view. I am looking forward to his input. Here are some cornerstones of our joint venture:

• We will jointly work on SaaS offering around AV, with a beta by the end of the year;
• AccountsVision will leverage the WinWeb platform for these SaaS developments;
• WinWeb will leverage AccountsVision knowledge in this area;
• AccountsVision will offer more and more applications around the accountants practice, i.e. Company Secretary tools with online filing, automatic tax return generation and online filing, and so on….;
• WinWeb will concentrate on the client side of things, with enhanced AccountsOffice, launch of AccountsOffice Lite ( in testing as I write ), online filing, enhanced cash flow and business planning tools, etc.

It is not often that one can find a partner, which fits in so perfectly with our own development focus. Together we will offer solutions for entrepreneurs and accountants alike to reduce accountant time spend on worthless IT tasks and free this time for active involvement in clients businesses to reduce mortality rate and increase business success.

Just to clarify, all Silver Partners and Gold Partners will get WinWeb AccountsVision ( Standard Edition ) FREE with their annual partnership, for all Bronze Partners we will subsidise the product by over 60%, from £ 379.00 (+VAT) to £ 150.00 (+VAT).

It is our relationship with our Accountant Partners and Solution Partners in connection with our online technology, forming our Small Business Infrastructure, that sets us apart from our competition, and represents our value model.

UPDATE: Read more on this story on Steve’s blog.

Tags: AAT, ACCA, Accountancy Age, Accountants, Accounting, AccountsOffice, AccountsVision, AIA, Badger Hakim, Business Development, Business Infrastructure, Business Mentoring, Business Start Up, Business Tool, Cash-Flow, CharterGroup, CIMA, CIPFA, Client Relations, CPA, CPAs, Customer Service, Entrepreneur, Evenlode Network, Finance, Holden Associates, Home Business, Homesourcing, ICAEW, ICAI, ICAS, IFA, IT, Micro Business, On-demand, OnlineOffice, Outsourcing, SaaS, SBI, Selfemployed, Small Business, smb, sme, sme-blog, Software as a Service, SOHO, Teleworking, United Kingdom, VAs, Very Small Business, Virtual Assitants, VirtualOffice, VSB, Web Technology, WebOffice, WinWeb, WOW