Axis

I think a number of people have ben intrigued by this post. I am not aware of any other accounting firm offering their service in this way but stand to be corrected.

We are offering a monthly accounting support plan where you get the help you need with your accounts direct to your pc via a secure remote access internet tool.

There are many ways you can utilise this service – for training; accounts production or just to chat through your results and what they are telling you.

IT services and support companies use this tool regularly and I recognised that this was a good way to help clients with their accounts without their location becoming an issue. It saves time – it saves resources too as no-one has to go anywhere!

I would welcome any direct questions on this topic if people are sceptical - we have clients using this service and finding it the most practical solution to their everyday accounting needs.

In today’s economic climate, perhaps more than ever, having your accounts up to date, accurate and relevant is a must. Here are some simple ways to achieve this plus the benefits awaiting you if you do!

Using an accounting software package (ASP) is my top tip for anyone running their own accounts. They can cost as little as £30 ex-VAT (some versions are free on-line) and so do not have to be expensive. If you need something more sophisticated but don’t have the cash you can rent various accounting software packages by the month, some even allowing access via secure virtual server.

A few people have told me they do not see this as relevant to them, even if they are running their own business:

“My accountant/bookkeeper does all that” is one favourite, or

“All the figures are in my head, I don’t need a computer” is another.

To these people I would like to say the following:

“In what way do you present your accounting records to your accountant/bookkeeper? How much extra work do you think you have to pay for to get your accounting information in order – before they can start to calculate your profits and/or tax liabilities?”

Even if your paperwork is neatly filed with typed or handwritten summaries, there are still a number of checks and balances to go through – such as:

Establishing a correct bank figure

Summarising Sales (Money In) & Purchases (Money Out)

Who owes money to you?

Who do you owe money to?

Should you be performing these tasks for yourself? Is the information relevant to you? How much less would your accountant charge you if you were to present him/her with this information along with your neat and tidily filed paper-work.?

“A-ha” you cry “I can do that without having an ASP. I have my manual cash book and/or my spreadsheet.”

“Fabulous!” say I “But what else can that do for you? How long does it take you to do?”

The biggest advantage of the ASP, whether it is Sage, Quick Books or MYOB (to name a few) is that from the single entry of a document, or a bank receipt or a cheque payment you get a vast array of information back. All of which is relevant to you. All of which will help your accountant do a better job for you, in less time and for a smaller fee.

Please do not think that your accountant will be unhappy when you turn up with a box file containing ordered receipts and a back up file copy of Sage Instant Accounting or Quick Books Simple Start instead of the usual box file (posh man’s carrier bag) full of unsorted receipts.

Whether you are using an accountant/bookkeeper or not, using an ASP will enhance your business and show your customers and suppliers that you are a professional firm using 21^st century methods.

I am not suggesting you invite them round for a cuppa and give them a guided tour of your books. No.

I am referring to you being able to supply them with crisp, clean professional documents, complete with your firm’s logo and detailing:

 to your customers , what they have bought, how much it costs and when it should be paid for.

And for your suppliers you could post a remittance advice with your cheque, telling them what you are paying for, or even better, email them the remittance advising that you are paying electronically direct into their bank account and on which day the money should arrive.

These are just a few good reasons in favour of using an accounting software package to keep your own accounts up to date, accurate and available.

1. Don’t wait until you have completed your trading year to make sense of your accounts. Keeping track of where you are will enable you (or your accountant) to plan how much tax you will need to pay. Keeping track means all the yucky bits like filing (bare minimum) plus knowing what you have bought and sold and perhaps most importantly who you have paid and who has paid you!
2. If you choose (or have to) register for VAT make sure that you consider the different schemes available. They are designed to make sure you do not pay too much too soon. If you have to pay out to suppliers faster than you get paid – use the cash basis scheme; but if the reverse is true – use the accrual basis scheme. If in doubt – ask! The wrong choice could see you run out of cash!
3. Consider carefully the legal entity for your business. Sole Trader businesses may be simpler to run but, should you run into difficulty, having “unlimited liability” means that you could end up losing the shirt off your back or worse – your home! Setting up and maintaining a limited company or limited liability partnership (LLP) is not as difficult as it sounds and your potential loss is “limited” to the value of the company.
4. If you are going to look after your own day to day bookkeeping the best way to avoid accumulating a back log (paperwork can seem as high and as daunting as a mountain) is to break the job down into tasks. Doing one task per “session” will actually save you time because you can work faster doing one task repetitively as you will not waste time by jumping around from job to job.
5. Don’t forget the big picture – you are in business to make a living. Work out how much money you need to live on and add this to your overheads (costs that have to be paid regardless of sales) as if you were any other supplier. If you are not making enough money to pay you at least what you need every month then you need to address the problem sooner rather than later.
6. If you have more than one way of making money, track related costs for each method from day one. This will enable you to tell what is making you money and more importantly what isn’t. High sales do not necessarily mean high profit. Different items can have different margins (amount left from sale after direct costs have been deducted). Don’t forget to factor in the relative cost of your time!
7. If you have more than one way of making money, track related costs for each method from day one. This will enable you to tell what is making you money and more importantly what isn’t. High sales do not necessarily mean high profit. Different items can have different margins (amount left from sale after direct costs have been deducted). Don’t forget to factor in the relative cost of your time!

Finally – I cannot stress enough the importance of keeping up to date. Remember first and foremost that there is an ART to preparing accounts in that they must be:

Accurate              Relevant              Timely

SMART is an acronym common among business coaches. We should apply it within our accounting procedures and make it a part of our everyday accounting results.

In order to achieve we must first set targets – our accounts can only tell us how we are doing if we prepare them using the right information and the right amount of detail.

Today’s economic climate makes it necessary for all of us to manage our money in the most cost effective manner. Every business has to have their eye on the bottom line.

Traditionally, SMART is a business planning tool where goals are set that are specific, measurable, achievable, realistic and timely. Accounting and finance are a core element in business planning and as such deserve our full attention when setting any kind of business goals or operational plan.

Without goals how do we know when we have achieved anything?

Your first target should be to ensure you will be able to take enough money home, after the business has paid its taxes, to meet you and your family’s needs.

From knowing what you need, you should then add on the tax you would need to pay and also the amount of spend you cannot avoid – such as Rent /Rates /Insurances.

This figure should then be at least equal to your gross profit – your sales less the associated direct costs. If your direct costs are known – even if only in percentage form – you can then work out your sales targets.

As a business owner it is vital to become proactive in your accounting methods. Rather than the reactive way that some employ where the accounts are simply a reflection of the year’s activities, make them a useful tool in planning your business’ activities.

Get back to basics first. Look at your chart of accounts.

Does it give you scope to measure accurately
• your different income streams
• your direct costs
• the effect of your spend on advertising and promotion

You can introduce sub accounts to break out this information if it is not there already. It is not enough to know you have sold x number of high value items unless you know what it has cost you to make or sell them.

It is also important to be able to differentiate between fixed costs that must be paid, where you have a choice and also what you need to take out of your distributable profit. You need to know not just if your business is profitable but if it is profitable enough to meet your needs.

How are you orgainising your paperwork at present?
The way you look after your paper records can make a huge difference to how much time you spend processing your accounts and how easily you can find information when your pc is switched off.
Keeping up to date with filing and marking your paperwork with important information indicating that it has been processed and/or paid can make a massive saving in time when you want to find a particular bill or sales record or just working out where you need to pick up from since the last time you worked on your accounts.

Axis Accounting & Training Ltd have launched an innovative new way to deliver their training.
Using remote access, they can provide one to one support via the internet to:
1. Talk you through any element of your software or accounts that you are having difficulty with
2. Train you in any accounting procedure you want to learn
3. Discuss your results and help you interpret or correct data from reports