Importing transactions into your accounts system
I find many businesses I start to work with still manually input their sales and purchase ledger or detailed general journal transactions. With most accounts packages (even the smaller ones) having the ability to import transactions from spreadsheets or directly from another system, there is very little need to spend hours on manual inputting directly into your system.
Some of the reasons/excuses businesses don’t import their transactions:
- No one knows how to do the imports. Once a template has been established, most imports are very simple to do and require minimal training.
- They believe it’s quicker to input directly as they don’t need to look up the accounts seperately. Very simple formulae in a spreadsheet could help with this. It’s easier to see from a spreadsheet whether the totals are correct and reduces the time taken to drill down into multiple screens on each transaction.
- By the time they’ve set up the template, they could’ve input it already. This is usually true of the first time but when staff members get used to processing this way, they are able to get a handle on it’s further potential uses and like anything, the time taken to do this reduces.
There are many reasons why I believe businesses should consider importing their transactions, here are some:
- Most transactions within accounts are repetative on a daily, monthly or quarterly basis. By having import templates ready to edit not only acts as a checklist of which entries are needed but will (after the initial set up) save time and improve accuracy of the data.
- Having information on a spreadsheet allows quicker reviews and clarity on what’s being input without the need to ‘drill down’ into the transactions.
- Importing saves manual processing time allowing staff to do more value added activities. By having more detailed information in your accounts system it vastly improves the information you’re able to then get out of it for management reporting and budgeting.
- The quality of data will improve as you’re likely to have more fields completed if you import due to the copy/paste function within spreadsheets and having all fields on one line rather than different screens.
- The accuracy of the data improves due to the ability to set up checks within the template file that let you know if something is incorrect. Transposition errors are less likely.
- If you link your accounts system to another database e.g. CRM system or Project Management software, then it can remove duplication of the data entry. A lot of accounts systems now allow you to import or link directly to your banking software which is a huge benefit as often bank reconciliations can be done daily which helps monitor cashflow.
Some examples of what can be set up to import (system dependent) and be of value to your business:
- Detailed payroll journals (by department) – Payroll is often the largest cost to a business yet often the one most overlooked in terms of reporting. You can improve a potentially complicated journal by setting up a template to import to a higher level of detail.
- Bank Statement Imports – By importing your bank statements from the data downloaded from your online banking, you eradicate the all too common transposition errors or possible duplication if you have multiple transactions of the same value. Some accounts software now has the facility of ‘bank feeds’ which imports transactions directly for you on a daily basis e.g. Xero.
- Sales invoicing especially when periodic – For example one of my clients was a group of private schools which had complicated discount structure based on age of each child and sibling discounts. This processing went from several weeks of manual inputting each term (with a high chance of errors and lots of disputes/complaints) down to 3 hours and a far greater level of accuracy. Checks were put in place on the import preparation spreadsheet to ensure that family invoices were grouped together and that all children had been accounted for and the correct discounts applied.
- Prepayments & other month end general ledger journals – Full descriptions on each line with each value seperated and not grouped together. This provides clearer transactional analysis and helps greatly when it comes to budgetting and cashflow forecasting.
- Customer/Supplier Records – updating or adding. If you have a lot of fields to complete often they’re omited with manual entry, by using a spreadsheet to complete the data it is likely to contain more consistent information as you can copy/paste or fill down on certain fields.
- Budgets – Depending on your reporting software, this could streamline your management pack by utilising functionality already available in the system without the needfor further processing in spreadsheets.
If you’re still not convinced of the value to your business by utilising data imports, consider this:
Saving just 1 day of processing time per month for a £25k employee is a saving of approximately £1,580pa* to your business. Use the ‘saved’ time on producing more timely, informative management information and KPIs (which you can now get as the transactional level data is of better quality).
Better business information leads to better business decisions and ultimately to better business profits.
If you’d like to discuss your accounts system and how to better utilise it’s functionality including imports, please contact Kat Hipsey, kat@hipseyconsulting.com
*Taking into account ER NI/Pension.
Planning to retire!
How many of us know what our business needs to achieve to deliver against our personal goals in the long term?
We all know that the state pension will be unlikely to meet our retirement needs in full. Most of us will be looking for our businesses to provide a safety net of income/capital value to make sure our retirements are secure.
However, as Steven Covey says you have to start with the end in mind. This means that you have to plan NOW to ensure you get out of your business what you need for the future.
If, like me, your business is largely centred on you as an individual your business is unlikely to be worth very much to someone else when you decide to stop. This means that your business needs to earn enough for you to make decent pension contributions now to fund your retirement.
If your business employs other people to deliver the product/service then you may be able to sell your business to realise value when you retire. However, you can only maximise this value if you start to plan several years ahead. It is vital that you can distance yourself from the business and that it can run without you, for example.
Whatever your goals it is never too early to start positioning your business so it is in the best position to meet them. If you don’t, you may find your retirement dreams end in cash strapped nightmares.
Fiona 🙂
What is the 10% Crowdfunding Rule?
Crowdfunding is a way in which people and businesses (including start-ups) can try to raise money from the public, to support a business, project, campaign or individual.
The term ‘crowdfunding’ applies to several internet-based business models, only some of which we regulate.
The Financial Conduct Authority don’t regulate:
- Donation-based crowdfunding: people give money to enterprises or organisations whose activities they want to support.
- Pre-payment or rewards-based crowdfunding: people give money in return for a reward, service or product (such as concert tickets, an innovative product, or a computer game).
The FCA do regulate:
- Loan-based crowdfunding: also known as ‘peer-to-peer lending’, this is where consumers lend money in return for interest payments and a repayment of capital over time.
- Investment-based crowdfunding: consumers invest directly or indirectly in new or established businesses by buying investments such as shares or debentures.
Further details on their website
The Financial Conduct Authority is proposing that starting from this year inexperienced investors in equity schemes will have to certify that they will not invest more than 10% of their portfolio in unlisted businesses.
Firms that run the website platforms say the rules are too tight and will put off potential investors.
Barry James, founder of The Crowdfunding Centre, says: “Make no mistake, the infamous 10% rule – however it’s dressed up – does just that: it takes the crowd out of equity crowdfunding.”
Despite the crackdown, investors who lend to small companies will not be covered by the Financial Services Compensation Scheme which protects investors if they are mis-sold an investment or if the company they invest in goes into liquidation.
The FCA believe there is high risk that consumers could suffer losses from peer-to-peer lending.
Is the risk too high? would you invest?
steve@bicknells.net
Why property investors like Micro Entity Accounts
A company meets the qualifying conditions for a micro-entity if it meets at least two out of three of the following thresholds:
- Turnover: Not more than £632,000
- Balance sheet total: Not more than £316,000
- Average number of employees: Not more than 10
There are approximately 1.56 million micro-entities in the UK, as compared with a total number of companies on the UK register of approximately 2.8 million.
Most property businesses will have less than 10 employees and less than £632,000 turnover.
If you are a property investor filing Abbreviated or Full Accounts you have to report property values at their fair value, which means you tell everyone what you think the property is worth. You may not want to do that, especially if you are planning to sell as it tells the potential buyer what you think its worth and that might be an issue in negotiations.
Under the Micro Entity regime you aren’t allowed to use fair value and have to use Historical Cost. Which most Property Investors will prefer.
No notes are required with Micro Entity Accounts and any advances or financial commitments are shown at the foot of the Balance Sheet, often this is simply the value of the Mortgage outstanding.
steve@bicknells.net
Auto Enrolment do you need help?
New research*, from workplace pensions provider NOW: Pensions reveals that four in ten (44%) small and medium sized companies haven’t given any thought to how they’ll go about finding a pension scheme to comply with the new auto enrolment legislation. But, a significant proportion, (14%) intend to get help from their accountant.
Of the 450 small and medium sized firms surveyed 5% are going to consult an IFA, 4% are going to search the market and do the research themselves. Only 2% have already made a decision and secured a scheme.
Over a fifth (22%) intend to use their existing pension provider for auto enrolment. This comes despite growing concern that some providers will not support smaller employers’ auto enrolment needs.
Despite a large proportion of SMEs admitting they are yet to think about their pension scheme, over half (57%) of firms surveyed think that their choice of pension provider is either important (33%) or very important (24%). Only 8% think it is unimportant.
Four in ten (40%) believe offering a good quality pension scheme will help with employee retention and nearly a third (32%) think it will help to improve the attractiveness of their company to potential employees.
Morten Nilsson, CEO of NOW: Pensions continues: “As auto enrolment gathers pace, accountants will play a key role in guiding small and medium sized companies through the complexities of the legislation. For those accountants that manage payroll, auto enrolment is unavoidable so getting to grips with it sooner rather than later is a must.”
Stephen Milne Chair of the CIMA Members in Practice Panel said: “With over 10,000 employers auto enrolling each month, support for SMEs is inevitably in short supply. Accountants are ideally placed to provide much needed help with the process from scheme selection to assessment and implementation.”
Through Business Accountant, a service provided by CIMA Members in Practice, companies facing auto enrolment can book a local CIMA Member in Practice by calling: 023 8064 3763.
*Research undertaken by BDRC Continental, an award-winning insight agency. Questions were put to 450 UK SMEs (up to and including 250 employees) via BDRC Continental’s monthly Business Opinion Omnibus. Telephone-based interviews with a nationally representative sample of senior financial decision makers across the UK, weighted by size, region and sector. Fieldwork dates 3rd to 13th March 2014
**Research conducted online with 264 advisers by Defaqto between 25th November and 5th December 2013.
Will you “Pay Em”? (PAYM)
A new way to pay is coming this month, its called PAYM and it will be available from the 29th April.
Customers of the following banks can now register to link their mobile number with their bank account: Bank of Scotland, Barclays, Cumberland Building Society, Halifax, HSBC, Lloyds, Santander and TSB.
Other banks – including NatWest, RBS and First Direct – will join the scheme later in the year.
People who wish just to receive money – as opposed to paying it – will still be able to use the system, even if their phone is not a smartphone, or they do not use mobile banking.
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To send money, a user will have to log into their bank’s mobile banking app, using a pass code as normal.
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They will then have to select the recipient of the payment, using their existing contacts or by typing in that person’s mobile phone number.
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After confirming the name of the recipient, they will have to check the amount being paid, type in a reference for it (such as “dinner”), and then press send.
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A confirmation message will then be sent to them.
You can find out more details on these links:
http://www.paymentscouncil.org.uk/mobile_payments/
So are you going to PAYM?
steve@bicknells.net
Anarchy in the UK . . . . the tax system
The referendum is due to take place in Sept 2014 & then the face of the UK could change. But from a tax perspective it already differs.
Following the Scotland Act 2012 various changes are already due to take place on 1st April 2015.
- In Scotland “stamp duty” is set to be replaced by “land & buildings transaction tax” – the latter working on the excess over a given threshold, rather than the whole amount when a threshold is exceeded.
- Scottish landfill tax will replace UK landfill tax for disposals in Scotland.
- Income tax will be made up partly of a Scottish variable rate, with that part going to Scotland & the rest going to the UK. The tax liability will depend on where you are domiciled – Scotland or the rest of the UK.
But what if Scotland receives the “Yes” vote & splits from the UK? In that case its taxation will not be governed by HMRC but by Revenue Scotland & there will be a completely different Scottish tax system.
Complicated? It probably will be!
Martin Pope
Top 5 reasons why Mums are starting businesses
Research by Direct Line shows that 65% of Mums with children under the age of 10 are considering starting their own business, why?
1. Allow me to spend more time with my children 20%
2. Cost of child care if I worked away from home 16%
3. Flexibility of being my own boss 14%
4. Lifelong ambition to start my own business 12%
5. Don’t/didn’t like my current job 1%
Reasons according to Financial Reporter
New figures suggested that full-time annual childcare costs for two children are now at £11,702, with almost half (49 per cent) of mothers surveyed believing they would be better off financially to start a business from home and save on childcare fees.
Here are 20 business you could start:
- Get a lodger – Under rent-a-room a taxpayer can be exempt from Income Tax on profits from furnished accommodation in their only or main home if the gross receipts they get (that is, before expenses) are £4,250 or less
- Ironing and Laundry Services – Always popular and you can start with friends and family
- E Bay Trading – as E Bay say… The first task is to sort through those bulging drawers and messy cupboards, finding stuff to flog. Get a big eBay box to stash your wares in, and systematically clear out wardrobes, DVD and CD piles, the loft and garage. Use the easy 12-month rule of thumb to help you decide what to offload: Haven’t used it for a year? Flog it.
- Blogging – Blogging has taken off and many businesses are looking for people to write blogs for them
- Candle Making – You can sell the candles on line and its easy to buy the wax and things you need to make the candles
- Car Boot Sale – As with E Bay but without going on line
- Cake Making – Make sure everything is labelled correctly and you comply with Health & Safety issues
- Data Entry – The internet makes it easy to enter data from where ever you are
- Social Media – Similar to blogging, businesses need help to manage Twitter, Facebook and Linked In
- Website Design – If you have the expertise, go for it
- Sales Parties – Cosmetics to Ann Summers, there is a long list of opportunities
- Sewing and Clothes Alterations – Perfect before and after Christmas
- Jewellery – Making and selling jewellery is always popular and great for Christmas presents
- Car Repairs – Assuming you have the skills needed and comply with legal requirements
- Pet Care – Walking dogs or grooming is popular
- Virtual Assistant – Also personal organiser or personal shopper
- Wedding Planner – You could start by creating a blog about your expertise
- Direct Sales – For example http://www.direct-sales-opportunities.com/uk.htm
- Computer Repair – Great provided you have the skills
- Marketing – Telesales to leaflet design and freelance writing
If you’re thinking of starting a busines please ask us for help https://business-accountant.com/contact-us/
steve@bicknells.net
Delegation is the key!
I was talking to a strategic introducer recently – she is successful in her field but is starting to get bogged down in the day to day running of her business. In particular, administration and bookkeeping are starting to grind and take the shine out of her enjoyment of her businesses.
This is a common story but one that has a simple solution – DELEGATION.
We may have many ‘good’ reasons why delegation is hard and why we should do all the ‘easy’ jobs in our businesses:
– it can be expensive to pay someone else
– perhaps they will do the job wrongly or prove unreliable
– it will take time for them to settle in and the process will be distracting
However, you cannot escape the truth that however much you try to ‘create’ time by managing it better, there will only ever be 24 hours in a day! There will come a point (or you may already be there) where there is simply not enough time to do all that is needed in your business.
So I would answer each of the objections above like this:
– You are much more valuable to your business than you may credit. Your time is likely to be worth much more to your business per hour than the £15-£25 per hour you might need to pay an administrator/bookkeeper.
Also there are jobs which only you can do in your business. These undelegatable jobs include creating business strategy, and leading and managing your business (even if you work alone your business needs to be managed!). If administration and bookkeeping are keeping you so occupied you do not have time for strategy, or management, then your business will suffer considerably.
– Are you really sure you are the best bookkeeper/administrator anyway! Surely you did not start your own business to play around with the books or to file!
– If you engage a trained bookkeeper they will settle in very quickly. Also, because they already know what to do as a bookkeeper you won’t have to spend time showing them what to do.
So do yourself a favour. If you have too little time to do the important things in your business – DELEGATE!
Fiona 🙂
How to use the new UK pension rules to make £500….
Here is the theory….
- You pay £8,000 into a defined contribution pension fund
- Its topped up by £2,000 (tax back from the government)
- So that’s £10,000 in your pension pot
- You take out £2,500 (25%) tax free
- You then pay 20% tax on £7,500 = £1,500
- So £8,000 in + £2,000 credit – £1,500 tax = £8,500 which is £500 more than you paid in
This is based on the HMRC rules.…
You must be at least 60 years of age to take your pension pot as a lump sum.
You may qualify to take all of your pension pot as a lump sum if:
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one of your pension pots is worth £10,000 or less
If a lump sum is paid instead of a small pension before you started to get that pension, only 75 per cent of the lump sum is taxable.
There will be some charges from your pension provider but these should be small, take look at this list for a comparison
ABI data suggest that 25% of pension pots are less than £10,000
steve@bicknells.net
Business Accountant 