The A-Z of Charnwood Accountants

Accountants – seems silly not to start here as that’s the day to day job and fundamentally what we are!

Business Advisors – We’re not just about the numbers though – a big part of the services we provide focus around general business advisory services. We see the detail behind the scenes of your business and will always look at ways to help you improve.

Communication – this is key for a successful relationship. If you only hear from your accountant once a year then that’s not enough. We speak to all our clients before their year end, following the year end to agree the accounts and after key events such as recent budgets. All clients will receive personal e-mails on any changes that will impact their business. We also encourage our clients to call us with queries with no fear that the clock will start running as soon as we answer! (more…)

5 Ways to tell if your accountant cares about you

For many people an accountant is an expensive and necessary evil much like the taxes they pay them to calculate. But this does not have to be the case. The relationship between a business owner and their accountant should be just that – a relationship. There should be understanding, compassion and assistance available when required. Above all your accountant should care about you and your business. (more…)

THE FRIGHTENING RISE OF INTERNET BANKING SCAMS

THE FRIGHTENING RISE OF INTERNET BANKING SCAMS

There appears to be a flourishing industry of ever more complex and sophisticated scams that are designed to divert our hard earned money from our bank account into the wrong hands.

Even within our own client base we have seen a frightening increase in the number of clients that have fallen foul of these scammers. Often, because of the complex nature of the scams, and due to the clients’ own inadvertent involvement, the clients have had no way of recouping their funds.

“IT WILL NEVER HAPPEN TO ME!”

We all believe that the systems and internal controls we have in place will protect us. However, the clients who suffer these scams often do have strong internal controls and the recent experiences have shown that everyone is vulnerable if the fraudster(s) catch you at the wrong time, on the wrong day, with the right information.

The good news is that we believe there are two golden rules to follow that will significantly reduce the risk of you or your business being the next one to lose out.

GOLDEN RULE 1

No matter what, always ensure that when anyone is contacted in relation to the business bank account, that they understand who initiated the phone call.

This is particularly important when phone calls/messages get passed on within the business. It should always be made clear whether the business has contacted the individual/perceived bank or whether the call came into the business.

If the phone call was an incoming call at no point should any information be discussed or any actions initiated in relation to logging on to the business banking system.

It is vitally important that the telephone number given as a return contact number and/or any website verification/sites provided should not be used or relied upon. It is important that a trusted number exists within the organisation for the actual bank, so that it can be used to verify the relevant person.

We cannot emphasise enough how important it is that any action involving the business bank account, only gets undertaken once the steps are retraced through a trusted number /actual contact, at the bank.

You would be surprised how many of the current scams would have been avoided if this golden rule had been applied.

GOLDEN RULE 2

This is mainly for people who have access to internet banking but it is equally important.

No “new payee” should be set up on the system or existing bank details changed for a current payee, without face to face contact or a phone conversation with a trusted individual to confirm that the new bank details are correct and valid.

Many of the current scams would have been avoided by following this second golden rule.

Neither of the above will strike you as particularly difficult or onerous, and you may feel these are both solid internal controls within your own business already. However, we finish by pointing out this is not something you can implement once and assume that everybody obeys these rules on a day to day basis. These should be regularly communicated for the benefit of all new staff and to remind existing staff, so that the risk of succumbing to one of the ever more sophisticated scams is significantly reduced or eliminated.

We hope you find this article interesting and we urge you to action/review the 2 golden rules in your organisation (and your personal life) to prevent any more people falling victim to the growing army of crooks.

DAVE MCKEON
Charnwood Accountants & Business Advisors LLP

A new style of exit for the owner manager business

Dave McKeon from Charnwood Accountants LLP sets out a new style of exit to add new and exciting business opportunities to owner managed business. This “John Lewis” style of exit offers a wealth of opportunity to businesses to move forward in a new and exciting style of ownership that suits modern business. Utilising an Employee Ownership Trust can add real value to the business and it’s potential for growth.

The main points are set out below:-

Benefits

• Employee engagement
• Potentially stronger growth in difficult markets
• Longevity of the business
• Ability of the current owners (and their successors) to maintain
shareholding after sale of the majority to the Trustees
• Highly effective exit route
• Highly tax effective exit (0% tax)
• Ongoing ownership incentives for employees
• Ongoing tax incentives for employees

Identifying Traits to Assess Suitability

• A desire to leave the business as a lasting legacy
• Employee retention and motivation
• Responsible capitalism
• Attraction of future talent
• Stronger growth
• Competitor differentiation

Initial Questions to Ask

• What percentage of current owner(s) shares will ultimately be sold
(and/or initial tranches)? (Must be more than 50%)
• Over what period of time do the current owners wish to sell/gift their
shares to the EOT and receive proceeds?
• Are there any special conditions that are required in the Trust Deed to
protect the future of the business?
• How will the Trust fund the purchase of the shares?
• Will the employees feel a sense of real ownership of the business in
the absence of direct ownership?
• The tax implications of this model of ownership for the company?
• The tax implications of this model of ownership for the employees?
• What form of hybrid ownership (mix of current ownership, new direct
ownership and employees via the Trust) best serves commercial requirements now and in the future?

Potential sources of finance

• Funding from the company
• Funding by the employees
• Vendor finance
• Loan finance (including peer to peer loans)
• Mezzanine finance
• Equity finance
• Crowd funding

Dave McKeon is happy to meet and discuss the potential of this idea with any forward thinking local businesses.

Increasing need for business advice among self-employed as more people become their own boss

The  pros and cons of being your own boss have been highlighted by Charnwood Accountants after new research revealed that almost one in seven people in the UK is now self-employed,

Chris Hutton, partner with Charnwood Accountants in Mountsorrel, said working for yourself offers a wide range of benefits – but it also presents a number of drawbacks.

His comments came in response to the Government’s 2015 Workplace Employment Relations Study which found that microbusinesses accounted for 33 per cent of private sector employment and 19 per cent of total output.

And, according to a survey by the Royal Society of Arts, 27 per cent of people who have become self-employed in the past five years have done so to escape joblessness.

Chris said: “Although people working in microbusinesses  tend to earn less,  receive less training  and have fewer benefits, research has shown that they are also the most satisfied group  of workers in the UK labour market  Among the reasons given for this are better job control, more  influence in decision making and even satisfaction with pay.

“However, despite benefits such as flexible working hours and the option to choose what work you undertake, there can be drawbacks – namely no sick pay, holiday pay or redundancy   pay; worry about not being paid on time; longer, unsocial hours; little or no support and no company contribution to a pension.

“With more people moving into self-employment, there is a corresponding growing need for good business advice among freelancers, sole traders and microbusinesses.

“Those who are starting up and feeling the pressure should to talk to their business adviser for guidance and support.”

How can an accountant help me grow my business?

Some people may only use their accountant to ensure they don’t miss any filing deadlines for their accounts and tax returns.  However, we can, and prefer to, offer so much more than that.

Here are some of the ways a good accountant can help you grow and develop your business:

  • We can identify and make you aware of key trends in your business
  • We can help you implement structures to incentivise and maintain key members of staff
  • We can help you identify and access any available grant funding
  • Once you have received a grant, we can help prepare any ongoing monitoring documents required by the grant awarders.
  • We can act as impartial and independent advisors – you can bounce ideas off us and we can share experience gained from the wide range of businesses with whom we work (of course this will be on an anonymous basis, as maintaining client confidentiality is of the utmost importance)
  • We can help you formulate and work towards a retirement and succession plan
  • We can review the structure of your business and implement any changes which may make it more effective

In addition to all of the above, as a client of Charnwood Accountants, you will receive free access to online business growth software – this will help you identify the key areas on which you should focus to grow your business; and then will give you strategies on how to do so.

If you would be interested in talking more about any of these ideas, please do get in the touch.

In the meantime, why not have a look at either of our free apps:

  • Charnwood Accountants app: full of tax tips as well as calculators so you can see how much tax you will have to pay in different scenarios
  • Profit Predictor app: discover what level of turnover your business needs to generate for you to be able to take out the money you want from it.

Brand new profit predictor app released by Charnwood Accountants

A new app designed to help businesses maximise their profit potential is being launched this week by Leicestershire accountancy firm Charnwood Accountants.

The tool aims to provide companies with greater clarity on their financial performance as they plot their long-term growth. The Profit Predictor was designed so companies can simply and easily check how much money they were generating.

The app was developed for Charnwood by Leicestershire-based Swipe & Tap.

The idea was to help businesses quickly and efficiently gain the detailed information they needed to set viable turnover targets and move their business forward. The Profit Predictor will help our clients to grow their businesses by equipping them with the key financial performance criteria they need to progress towards their financial targets.

For many owner-managed businesses, performance is measured by turnover, as that can be easily reviewed year on year or month on month.

The app was designed to perform a true breakeven analysis, identifying the value of sales required in order to cover the costs of the business and the required takeout of the business owners. Once a core base line is established, this can be simply adjusted to factor in, for example a pension contribution, or an increased dividend.

The Profit Predictor app will work back from your desired takeout, accounting for the current business costs and gross profit margin to establish the required business turnover. Plus, it will inform you of your estimated Corporation Tax to put aside if you hit your target.

Charnwood Accountants had been using the principles of the app for many years, to help clients to better understand the link between their financial targets compared with the level of turnover required to attain them.

The app’s features include allowing users to: check changes in business overheads; review the effect of changes in gross margin on required turnover; see the effects of increased or decreased takeout from a business and change directors’ takeout mix to include a pension contribution.

The free Profit Predictor is available at apple store in the business category and can be downloaded here:

AppStoreIcon

Swipe & Tap is a Leicestershire-based independent mobile app development company.