Your year end can cost you more than you think

Preparing your year end accounts can be costly your business – and that’s before you’ve event considered the financial aspect.

In finding, organising and making sense of your paperwork and records, there are time costs, emotional costs (usually stress!) and work-life balance costs to consider.

15% off your year end with us

Cross Accounting Services can help on all fronts. We love year end and so as a thank you from us, we’re offering 15% off your first year end fees with us.

So, you get to spend time doing the things you love at a reduced all round cost – and we get to spend time doing the things we love, thanks to you!

Call Nicola on 029 2065 3995 and quote reference CA15 to receive your discount or email her asking for more information also quoting CA15 Closing date 31 March 2014

The Business Plan

9 April 2014

This blog is intended to explain the full potential of your business plan.

We have just updated our Business Plan and wanted to share some insights as to why these are important for the growth and success of your business.

You may have put one together when you started your business and it is now collecting dust in the drawer, next to the filing cabinet.

How about if we told you it can be adapted to be used as a positive tool to be developed as your business develops.

You maybe three years into your business, you have changed both as a person, and as a business in that timeframe. What was important three years ago, may not be so important, you may have other ideas, now you’ve dipped your toes into the world of entrepreneurship.

Why Do This In The First Place?

To focus on specific goals you wish to achieve, have something to aim for.

To take on a planned approach to your daily routine. The successful companies plan everything.

To know your customer better 

To know your competitors better 

To work on your threats and weaknesses . Stand out from the crowd.

Lets break it down.

Your Mission Statement

What do you want to be?

What do you want your business to be?

What is your Unique Selling Point, what is your business goal all about?

Why are you doing what you are doing?

Update the business plan with these new inspirational ideas.

SWOT Analysis

You have now been in business for while. You now have experience with what you are doing. You may have made some mistakes along the way, but have learnt from them using that knowledge to better use.

The SWOT analysis is all about where you are today, and how you compare with your expectations and more importantly against the competition.

Strengths - you have first-hand experience of running a business. What have you gained from your time doing it.

Weaknesses – you listed these in your first business plan, did you manage to eliminate some. Have you gained new ones?

Opportunities – No matter how big or small your business is there are always opportunities to promote and sell your product. Use your contacts you have now built up. They may be able to put some work your way. Give you access to that contract you’ve been chasing. Its not necessarily what you know, its who you know.

Threats – Whether you own the local shop down the road, or run a large corporation.

Three main threats to your business survival. The economic environment, cashflow and the competition. Embrace and learn all you can about them, be one step ahead.

The Products Or Services You Offer

What services or products do you offer ?

What is your Unique Selling Point ?

How saturated is the market place ?

How big is your market, what is your potential piece of the pie?

Is it local area or a global market ?

Can you make a profit from what you are doing?

The Marketing Strategy

How am I visible to the market place 

Website development 

Online presence 

Advertising in the local press 

The Directories 

Word of mouth 

Business contacts 

Referrals 

Looking at the competition and your customer base, the target market. This should be taking up the main part of your business plan Your strengths and weaknesses against the competition Your target market

How your marketing campaign has been working so far, track what works and what doesn’t. Some Number Work Set yourself a detailed budget and compare to actual figures Put together a cashflow statement.

Whatever youre doing always keep an eye on the cash and profitability.

Check and triple check your costings.

Nicola Cross 9 April 2014

This blog is intended for information purposes only and is only advice from past experience, you may have other suggestions of your own. It is not intended to be used to make all of your business decisions but as a guide only.

How Graphs Can Be Used For Your Business

Graphs can be used by Financial and Non Financial managers in a variety of ways.

Sales

Sales Managers have targets that are set for them by the company they work for.  They can track their sales in a variety of ways.

Our example shows Sales split by category/or segment and shown against budget. Targets that were set at the beginning of the year.

This graph also tells you the most popular and productive products on sale.
You can take this further and look at the margins of each product category, you might not sell a lot of something but if it returns a higher margin/profit rate, you don’t have to sell as many to get the same profit figures. There may also be seasonality in that product line.

Ie in hot weather a newsagent may sell a lot more drinks than bars of chocolate.
In cold weather the icecream freezer might go untouched. Easter, Half Term, Christmas. You would tailor your sales targets to match demand.

Apply this method to your particular product line.

 

Cashflow

You might want to set yourself a target bank balance for you to meet your overheads and make a profit.

The graph will show against budget whether you are meeting that goal.

It also gives indication of the business behaviour, see our example the graph shows above the line at first, then dips over February to April then comes back up.  Back into the target position and above.

If the graph had shown erratic it would give an indication of how well the manager is managing the business. In a planned approach, or finger in the air approach.

Gross Profit

This is a key figure in your accounts, it indicates whether you have made enough sales to now cover your overheads and make a profit.

Our graph shows a rise and then a sharp dip in May, this could be down to several factors.  The Sales themselves were generally low that month, an error in charging the right selling price for a new product line, an operational issue.

If you see a dip in any of these things, look for the reason, if easily explained, you could be putting action in to put yourself back on track.  Also look out for high peaks, these should be explainable.  ie a new contract, timing issues, seasonality, or it could be an error.

This blog is intended for information purposes only and is only advice from past experience, you may have other suggestions of your own.  It is not intended to be used to make all of your business decisions but as a guide only.

Tips To Cashflow Success

Cashflow funding of a business is key for its survival. A number of businesses fail within their first two years of trading, not because they didn’t have a good product or service, not because they didn’t have a market. They simply ran out of cash.

Sales Income

Prepare a detailed cashflow of your normal business trading, information from Sales already in your diary, if you have been trading for a few years. Use past history to project forward. For the new business set an achievable goal. Always look ahead a minimum of a year, three years if possible.

You may have peaks and troughs, downtime or seasonality, build these into your forecast.

Don’t forget VAT if that applies. Ideally shown it separately, and offset the VAT on purchases. Your sudden inflow of cash may belong to the Inland Revenue.

Your Costs

Main costs first

Materials
Wages
Rent
Travel etc.

At the bottom, how much do you have in the bank to start off with. Show the opening balance of the bank.

We always look at forecast cashflows, ie a budgeted one along with an actual one. As the months pass by update the cashflow with your actual figures and roll forward. So that you are always looking at a year to date. It does not necessarily need to be in line with your year end. Do a separate one for the year end if necessary.

By now you will know ahead of time your cashflow issues, peaks and troughs, you can now put a plan of action to make sure that you are covered in the troughs, and are saving in the peaks.

If you need a large amount of cash in six months time. Don’t leave the sudden influx of cash to the last minute. Build up over a period of time.

You might be wanting to buy capital expenditure, or take on more staff, it will help you predict when this can take place.

Look at your marketing to increase sales. Check your margins to make sure your sales cover your costs. Keep a close eye on the costs themselves.

Look at other options for finance other than your cashflows from the business.

Gain credit from your suppliers
Finance leases from the banks and other money lenders
A mortgage

Your credit score can even affect you being able to take on a large contract. You will still need the credit from your supplier to make that important sale.

By gaining credit it will increase your credit score and make you more attractive to lenders.

Nicola Cross
26/9/11

This blog is intended for information purposes only and is only advice from past experience, you may have other suggestions of your own. It is not intended to be used to make all of your business decisions but as a guide only.

With the latest announcement and ever-changing forms of support, it looks like the Government have given in to the pressure and will continue with the furlough of 80%. The furlough scheme also known as the job retention scheme is to last until March 2021. This is to support businesses with the cost of employees’ wages as it seems likely to be in and out of a ‘firebreak’ lockdown.

Coronavirus job retention scheme

This is like the original scheme when it started up back in March. The scheme contributes the wages of people who cannot do their jobs, either because their workplace is closed, or because there is no longer enough work for them.

About 10 million jobs have already been claimed for, with an estimated two million people still on furlough at the end of October.

The government will pay 80% of salary for any unworked hours, capped up £2,500 per month, with employers responsible to pay pension and National Insurance contribution. If staff are on furlough, they cannot undertake any work for you. Any work done by staff, will then be the responsibility of you paying 100% for hours worked.

Rishi Sunak, the chancellor said the furlough extension meant the plans to pay a £1,000 job retention bonus to companies for every furloughed staff member they kept on until the end of January would now be scrapped. 

Support for the Self-Employed

Support for the self-employed will also be increased for November to January to a similar level as the furlough scheme. So, the grant will cover 80% of profits up to a total limit of £7,500. Please note that this grant will be treated as income, and tax implications will apply.

Applications will be open from 30 November 2020 for those who are eligible and have been affected by coronavirus. The government's original plan was for this third grant to only cover 40% of average monthly trading profits, with a limit of £3,750 in total. This was then updated to cover 55% of trading profits, but just a few days later was extended again to 80%.

Economic Resilience Fund 

These packages of support are designed to cover as much of the Welsh Economy as possible and are mainly focused around providing financial support for businesses.

There are two types of fund available. You will have to choose the correct one that applies to you.

Lockdown Non-Domestic Rate Grant

Grant 1
Business can get a grant of £5,000 for retail, leisure and hospitality businesses that have been forced to close and occupy properties with a rateable value of between £12,001 and £51,000.

Grant 2 
A grant of £1,000 is being made available to ALL businesses eligible for small business rates relief in Wales with a rateable value of up to £12,000

• Businesses eligible for small business rates relief that have been subject to local restrictions for 3 weeks or more and have been materially impacted (>50% reduction in turnover) up to the 23rd October will be eligible for a further grant of £1,000

•  and a discretionary enhanced £2,000 top-up grant will be made available on an application basis for those businesses with a rateable value of £12,000 or less who are forced to close by the firebreak lockdown.

You are not eligible for the Lockdown Non-Domestic Rate Grant if, you are eligible for, or have received, the Lockdown Discretionary Grant from your Local Authority.

The second of the fund is the Lockdown Discretionary Grant.

Lockdown Discretionary Grant

Grant amount 1

A discretionary grant of £1,500 is available to assist businesses that have:
•    Been forced to close as a result of the national firebreak lockdown
•    OR are able to demonstrate that the national firebreak lockdown will result in at least a 80% reduction in their turnover for that period

Grant amount 2

a discretionary grant of £2,000 is available to assist businesses that have:
•    Been forced to close as a result of the national firebreak lockdown
•    OR are able to demonstrate that the national firebreak lockdown will result in at least a 80% reduction in their turnover for that period

AND 

have been subject to local restrictions for 3 weeks or more up to the 23rd October and experienced at least a 50% reduction in their turnover for that period.

You cannot apply for both Grant 1 and Grant 2.
You are not eligible for the Lockdown Discretionary Grant if you are eligible for, or have received, the Lockdown Non-Domestic Rate Grant from your Local Authority, if you have 50 or more employees and If the business generated less than 50% of your income, the business must be your main source of income.

The grant will be open to applications from the timeframe of 28th October to 20^th November 2020 or when the fund is fully committed.

The Local Authority will deal with applications on a first come first served basis. This may lead to applications not being appraised after they have been submitted if the fund is fully committed.

The Local Authority aim to process grant within 30 days of receiving the application. If your application is unsuccessful, you will receive an email outlining the reasons for rejection. There unfortunately is no appeal process available if unsuccessful.

As summer has ended and the colder nights approach, it can be a bit tough to take with the local lockdowns in place. We need to try and stay spirited and make the most of our situation. If you are having to close or reduce hours, make sure to keep promoting your business on social media, so once you are back, you are still in front of people’s mind. There is some support still out there, carry on reading to see what you can apply for before the deadlines approach.

Coronavirus Loans

The Chancellor, Rishi Sunak has announced that businesses that have borrowed money through the government's loan scheme, such as the “bounce back” loan and the “Coronavirus Business Interruption Loan Scheme” would be given more time to repay the money.

A new Pay as You Grow flexible repayment system has been introduced by the chancellor for small businesses who took out the "Bounce Back". It means borrowings can be repaid over ten years instead of the original six-year term.

The longer repayment time also applied to small and medium-sized firms who borrowed under the “Coronavirus Business Interruption Loan Scheme”.

Businesses will also have more time to apply for these loans, application dates for the schemes had been due to end in October.

Job Support Scheme

As furlough comes towards the end, the chancellor announced a new replacement scheme for the Job Retention Scheme (furlough). From 01 November, the new scheme known as Job Support Scheme will see that the government will contribute towards the wages of employees who are working fewer than normal hours.

Any hours worked by the employees the employer will continue to pay their usual wages of the hours worked. For hours not worked, the government and the employer will each pay one third of the equivalent salary. The government’s contribution will be capped at £697.92 a month.

Kickstart Scheme

With Coronavirus effecting everyone, some of the hardest hit were the young people. The Kickstart Scheme provides funding to employers to create new 6-month job placements for young people aged between 16 – 24 who are currently claiming Universal Credit and at risk of long-term unemployment.

This is the government’s plan for jobs and to create hundreds and thousands of new, fully funded jobs across England, Scotland and Wales. More details are yet to come out and the first placements are likely to be available from November.

The Kickstart Scheme will cover 100% of the National Minimum Wage for 25 hours a week as well as the employer National Insurance contributions and employer minimum automatic enrolment contributions.

There will also be extra funding to support young people after the 6-month period to help build their experience and help them move into sustained employment after they have completed their Kickstart Scheme.

Self-Employment Income Support Scheme

The previous support for the self-employed has been decided by the government to be extended. The extension will provide two grants and will last for six months, from November 2020 to April 2021. Grants will be paid in two lump sum instalments each covering a 3-month period.

You must currently be eligible for the original Self-Employed Income Support Scheme, though you do not need to have claimed it. It must be declared that you are actively trading and that you are impacted by the pandemic. HMRC will provide more details about claiming in due course.

VAT Reduced Rate

There was a series of new measures introduced to help hospitality, holiday accommodation and attractions sector. These included VAT being cut to 5%, effective from 15 July 2020. The VAT cut will remain in place and has been extended to run until 31 March 2021.

For restaurants and cafés that provide food services for both take away and dine in, the temporary reduction in the VAT rate only applies to;

·         Food for consumption on the premises on which they are supplied

·         Non-alcoholic beverages for consumption on the premises on which they are supplied

·         Hot takeaway food for consumption off the premises on which they are supplied

·         Hot takeaway non-alcoholic beverages for consumption off the premises on which they are supplied

We all need to continue supporting each other, shop local wherever possible, helping the small independent shops. Let’s follow government guidelines and rules, to stop a spike in cases and who knows, our sacrifices may be worth it when we may be able to celebrate come Christmas.

As we try and get back some normality in our lives, and places start to open back up for business. We still need to remember that the fight is not over and need to abide by the rules set in place. Well done to all pushing through and staying motivated. Throughout lockdown we have updated you with what the government have announced and plan to do. There have been a lot of information announced, you can find all the latest below.

How has the Furlough scheme changed?

One of the many questions we get asked is, how has the furlough scheme changed? The Coronavirus Job Retention Scheme, furlough as its more commonly called is designed to help people who could not do their jobs because of the virus and prevent mass redundancies.

The scheme is to close in October and has had some criticism with the decision to close, but it has been backed by the Bank of England boss, which says workers should be helped to ''move forward'' and not kept in unproductive jobs.

From 01 August 2020 the government will pay 80% of wages up to a cap of £2,500. Employers will now have to pay employers National Insurance Contributions (NIC) and pension contributions. You can bring back employees to work shifts and then put back on furlough if needed. Remember any hours worked, the employee is entitled to 100% of their wage and this needs to come directly from the employer.

From 01 September 2020 the government will contribute 70% of wages up to a cap of £2,187.50. Employers will again pay employer National Insurance Contributions (NIC) and pension contributions just like for August. However, now employers will have to pay 10% of wages to make up the 80% total up to a cap of £2,500. Part time furlough is still available, but any hours worked by staff, employers will have to pay 100% of wage.

From 01 October 2020, 60% of wages will be contributed by the government up to a cap of £1,875. Employers will pay employer NICs and pension contributions and top up 20% of wages to make up 80% total up to a cap of £2,500 until when the scheme ends at the end of the month.

The aim of the tapering is to allow employers to ease employees back in to work at the same time as businesses productivity hopefully resumes.

How does the part time furlough work?

The part time furlough is designed to give you the chance to call an employee back in to work if there is a lot of work or put them back on furlough if the workload drops off. So, how does it work?

If you have a member of staff who works 8 hours a day, 5 days a week and your business is closed, you can furlough the member of staff and the government will cover a percentage of the wage, depending on the situation as mentioned above. If you want to trial opening your business for a couple of days a week, and you need the member of staff for 3 days a week, you will be liable to pay 100% of the wage for the 3 days worked, and the government will pay the percentage equivalent for the remaining 2 days not worked and on furlough. The rules mentioned above applies, regarding the percentage amount and NIC’s being paid by yourself.

The government has allowed the part time furlough to relieve some of the financial strain of keeping staff and prevent mass redundancies. For each furloughed member of staff still employed as of 31 January 2021, the government will give the employer a one-off £1,000 bonus

Kickstart Scheme

The chancellor also announced a new Kickstart Scheme worth to be in the region of £2 billion. The plan is to be launched to create hundreds of thousands of new, fully subsidised jobs for young people. If you claim Universal Credit and are aged between 16-24 and at risk of long-term unemployment will be eligible. Funding will be available for each six-month job placement and will cover 100% of the National Minimum Wage for 25 hours a week. Employers will be able to top this wage up if they please.

How to apply for this, still has not been fully revealed by the government. As it gets closer to the scheme being live, more information will be revealed and as always, as soon as we know, we will pass the information to you.

Help Out Eat Out

A little more positive news from the hospitality sector is for the month of August you can get 50% off your bill in participating restaurants with the other half covered by the government. This is capped at £10 per diner and excludes alcohol and is only valid for Monday – Wednesdays in August and can be used as many times as you like. The offer is for dine in only as the government encourages people to go out. To check which restaurants are participating click here and enter your post code to see who around you are participating.

Remember to support your independently owned food venues during these tough times and remember to practice social distancing. Stay motivated and stay safe as together we can end 2020 on a positive bang!

We have all been paying closer attention to the news in recent times. It does look like better days are to come, with restaurants and bars been given the green light to open. While we all are excited and wanting to enjoy ourselves, please remember to social distance as this is still very vital to our fight against this virus.

The Chancellor, Rishi Sunak has pledged great support during these tough times and has again set the foundation for all of us to come out of this. It will be no easy job, but together we can do this. Supporting small businesses is vital.

The Chancellor mentioned a few things in his speech, while some of his policies apply to Wales, others do not as they are the responsibility of the Welsh Government. We digest the main points here.

Job Retention Bonus

The furlough scheme will be ending in Wales at the end of October. We are more reliant on the job retention scheme here in Wales than any other part of the UK. There are about 300,000 people on the furlough scheme. The Welsh Government has said that it does not have the "financial fire power" to be able to continue the scheme itself.

The Chancellor said he would be introducing a new scheme called the Jobs Retention Bonus. Under the new scheme, firms will be paid £1,000 for each employee they bring back from furlough and continuously employ through to January 2021 on an average of at least £520 a month.

            Eating Out Discount

The Chancellor has said there will be a 50% discount on food if people eat out in August on Mondays to Wednesdays. This is to try and get people using restaurants.

This will entitle every diner to a 50% discount of up to £10 per head on their meal, at any participating restaurant, café, pub, or other eligible food venue. There is not a limit to the amount of times the discount can be used and will be valid Monday to Wednesday on any eat-in meal (including on non-alcoholic drinks) for all of August. Participating establishments will be fully reimbursed for the 50% discount.

Temporary VAT Cut

If you supply food and non-alcoholic beverages for consumption on your premises, for example, a restaurant, café or pub, you’re currently required to charge VAT at the standard rate of 20%. However, when you make these supplies between 15 July 2020 and 12 January 2021 you will only need to charge 5%

It will apply to supplies of accommodation and admission to attractions as well. This will include takeaways, restaurants, cinemas and theme parks.

These are all in the pilot stages, and more information is to be released in the days to come. As soon as we know, we will also share the information with you. If there is something you want to know more about, you can call us on 02920 653995 to discuss. The introduction of these will mean we have a better chance to finish 2020 on a high.