Theres been a lot of news coverage regarding the political parties getting ready and promoting their manifestos for the next election to encourage you to choose our next government.

Whichever party is your preference your destiny and your business success is completely in your own hands.

We have as accountants a short timeframe of seasonality before everything hots up again in April/May. We use this opportunity to look at our systems and see what we can do to improve our service to our clients and make efficiency savings, we have found it highly rewarding to see the changes over these last five years.

We also actively speak to our clients about changing their systems to make themselves more efficient to take their businesses to that next level of growth.

Ways that can be useful.

• Purchase higher specification software to make the service a lot more standardised.

• Look at the process itself and find ways of doing the same job for less time.

• Negotiating with suppliers for a greater discount, certainly if youre spending more on that product.

• Get to know the customer better so that you can tailor the service better

• Take out the human element, if a machine can do it cheaper use it, this will save a lot of cost on a volume product, and probably better too as you’ve taken away the potential for human error.

• Create a little production run, and run through it with your staff, can there be short cuts, or cut out duplication. Review it and make it smarter. Particularly good with the restaurant and pub industries as well as manufacturing.

• If youre wasting time doing the little things and not getting the bigger picture tasks dealt with, maybe you need a member of staff. Use someone cheaper than yourself so that you can concentrate on the improvement of your income.

• Outsource, if you either don’t have the time or the expertise, definitely look at this for marketing and finance particularly.

Larger companies have a lot of duplication in them, don’t let that be you, it’s the quickest way of increasing the costs.  If get yourself in this routine whilst your small, youll never suffer from large company syndrome and make more money than your counterparts.

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.

I have recently been on a seminar for auto enrolment the new pension scheme which is affecting large companies now, but is being rolled out to all employers and employees over the next couple of years.

The timeline which keeps changing is

Small companies particularly

30-49 employees August 2015 to October 2015

Less than 30 employees January 2016 to April 2017

For your own specific deadline dates, go into the following link And put in your PAYE reference number.

http://www.thepensionsregulator.gov.uk/employers/tools/staging-date.aspx

I know these dates look so far away but they will be here before you know it, a letter will arrive on your doorstep one year before your staging date. You have a year to act, but as you can imagine just like Real Time Information if everybody applies for a pension scheme at the same time, which you and many thousands of companies will be doing. You could find yourself in the middle of a queuing system that could take you past the deadline date.

The financial advisors we use have told us that a pension scheme of this nature can take up to six months to be set up, so you really do have to be reactive and deal with it straight away.

This is not going to be like the stakeholder schemes there was no real policing of it and no real fine system. The government are very serious about this and will be issuing fines, one off fines of £400 and daily fines depending on your size of business of more than £50 per day rising to £10,000 per day for the larger companies.

We have a pension black hole which has been put off for many years, now is the time to fill the gap, this system is compulsory and to opt out is going to be very difficult. There some very serious rules that go with it. One of which is to not discourage members of staff to stay opted in. Heavy fines and prison sentences have been communicated more than £1,000 fixed penalty up to £5,000 for the larger companies not complying.

Each and every employer be it large or small, unlimited or limited companies will have to set up their own pension scheme that is compliant with the governments rulings. You can set it up yourself but it is advisable to use a financial advisor. Costs of which do vary.

You are able to set up these schemes ready for the deadline date now, and not have it go live until the deadline timings, worth knowing if you want to plan ahead.

There are some people who are exempt which are self employed with no staff, directors and some low paid earners, but you need to check the criteria nearer the time as this could change by the time 2017 comes along.

There are currently staged percentages for schemes already in place, rising to 5% for employees and 3% for employers by October 2018.

There will need to be changes to contracts of employment for every employee to take into account these new changes too.

I am sure it is not the best news to be hearing when times are still tough for a lot of people, but forewarned is better than not knowing at all.

Be prepared and plan for it in your budgets, you need to be thinking about how you will pay for it, be it pay freeze, increasing prices, or absorbing it into your normal overheads.

The full details are on page

http://www.thepensionsregulator.gov.uk/employers/planning-for-automatic-enrolment.aspx

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.

As the clock ticks towards 01 April 2024, businesses across the nation are bracing themselves for the significant minimum wage increase set to come into effect. With no accompanying support from governments in these challenging times, the burden falls on the shoulders of businesses to adapt and plan effectively.

The Rise of Minimum Wage

As with every year, April 1st marks a pivotal moment as the minimum wage sees a substantial increase. Workers aged 21 and over will be entitled to the National Living Wage where currently it was workers aged 23 and over. While the intention behind such adjustments is to uplift low-wage workers and tackle income inequality, the reality for businesses is starkly different. For many, this hike presents a formidable challenge, with limited government assistance.

Financial stability is crucial to any business. It is extremely important that you protect and enhance it. Cashflow of your business is vital. You need to be aware of how much money is coming in and how much money is going out of the business. You will need to have a plan in place to cover any shortfalls.

Governments are having their own challenges and not always there to help us in a crisis, we have to stand on our own two feet, to see ourselves through these challenging trading times.

To stay on top of cashflow, it is best to speak to your accountant about cashflow projections. We have also got examples of how to get the best of cashflow on our website, click here to find out more.

We have examples of cashflow and budgeting here.

So, what can be causes of cashflow issues?

The number one issue we see is when a supplier has increased their prices significantly. This is when you need to decide if there is something you can scale back on or is it time to start shopping around. Talking to your suppliers if you notice increases, we’ve all been facing this over the past 18 months.

Track and monitor your costs, by carrying out management accounts, comparing this year with last year, you can see instantly what has changed for you and your business.

Late payments from customers can lead to cashflow issues too. This can sometimes cause tension as you do not want to ruin relations. The following tips can help tackle these issues;

·        Ensuring your invoices are accurate and on time can help avoid late payments.

·        Giving gentle reminders as it approaches credit term limits.

·        Providing easy payment solutions such as bank transfer or a direct debit system

·        Check your customers credit score, giving too much credit without looking into your customer bill paying activities can lead to bad debts.

·        Discounts for early payment to improve the timing of when the cash will be paid in can help too.

We all dislike to pay tax, but it is a part of life. Tax planning helps to keep your business financially healthy. We must ensure we have the funds to cover the tax payments. This is why it is crucial to work with your accountant so that you know well ahead of time how much your tax bill is. Not paying the tax bill in full and on time can add to the cost. Penalties and interest will incur and can make this less manageable.

There are allowances and reliefs out there to bring the tax bill down. Getting this done correctly will ensure that you pay the lowest but accurate amount over to HMRC.

Set up a savings account, and slowly build up the cash towards any tax bill, you don’t get surprises when its time to pay the bill then. Any surplus in that account, could pay for something you want.

Businesses that plan ahead, traditionally do better than those that don’t plan and work in the dark.

There are approximately 5.6 million businesses in the UK, of which 98% are considered small to medium sized businesses. So, we small businesses are crucial to the UK economy, there is no denying this.

Whether you are a start-up and excited for the times ahead, or an establishment renewing your challenges, we all want to be successful with our business. In our latest blog, we talk about tips we think are vital to any business.

We all have a vision in mind, of where we’d like to see our business in the future. This vision needs to be translated on paper as your business plan. A business plan is a must for all business owners. This can help outside investors get an insight of your business, for if ever you need funding to grow your business.

Business Plan

A business plan should consist of;

·    Summary – What is your purpose, what is your vision?

·    Target market – Who are you likely to sell to

·    Competitors – What is your rivals weakness? Why are you different?

·    Staff – Do you need people to help run your business. What level of skill and pay is required?

·    Suppliers – Who will be your main supplier?

·    Marketing Plan – How will you advertise yourself to the world

·    Operations – Which is the best way to run your business.

·    Finance – How much money do you need? Determine the profitability of the business.

Business Structure

As well as a business plan, you will need to have a business structure. Sole trader, partnerships and limited companies all have their own pros and cons. Deciding which structure to choose is not always straightforward. If an asset is owned outright, then you would need to consider retaining personal ownership on incorporation. If you’re not sure which structure model you should go for, then here at Cross Accounting we can give tailored advice to you.

Year End

We cannot stress enough the importance of doing your year end as early as possible. Once completed, this will give you peace of mind as you will not have to worry, until next year. It will also give you more time to budget for your tax bill. You will not be in a rush to find the money for the tax bill and not kill your cashflow. Keep all receipts for your expenses, these will all help lower the tax bill. If you buy equipment or tools, mobile phone bills, petrol, these are all deductible. HMRC can conduct random spot checks, so it���s important to keep paperwork, recommended for 6 years.

Budgeting

Having budgets in place for your business can help you predict the near future. This allows you to have a spending plan, so you can make sure you have money for the things you need and the things that are important to you. You can see what is eating up your cash and avoid spending on unnecessary fees. Below is an example of a very simple budget.

These tips will keep you motivated and more importantly give you an idea of where your finances lay, helping you to quickly identify if there are rainy days ahead.

If you need expert tailored advice, please do get in touch as we are always happy to help.

There is always new rates and thresholds that come in to place in the new financial year.

The National Minimum Wage rate has gone up, however, the personal threshold has stayed the same.

Personal Allowance

The personal allowance is the amount you can earn without having to pay any tax.

This financial year 2023-24 is £12,570

National Insurance Rates

As an employee, you will pay Class 1 NI rates. If you earn above the primary threshold, then you will play Class 1 NI. The primary threshold for 2023-24 are £242 a week, or, £1,048 a month, or, £12,570 a year.

You will pay an additional 2% if you are in the upper earning limit. The upper earning limit are £967 a week, or, £4,189 a month, or, £50,270 a year

As an employer, you will have to pay national insurance on your staff members. This includes if you are a sole director on payroll. The rate applies to earnings above the secondary threshold. The secondary threshold for 2023-24 are £175 a week, or, £758 a month, or, £9,100 a year.

Employment Allowance

Employment Allowance allows eligible employers to reduce their annual National Insurance liability by up to the annual allowance amount. For the year 2023-24 this is £5,000

National Minimum Wage

The National Minimum Wage is the minimum pay per hour all workers are entitled to by law. These rates apply from 1 April 2023

SSP Statutory Sick Pay

Employees are entitled to SSP if they are off work for 3+ days. The same weekly Statutory Sick Pay rate applies to all employees. However, the amount you must actually pay an employee for each day they’re off work due to illness (the daily rate) depends on the number of ‘qualifying days’ they work each week.

If you want to ensure you are not breaking the payroll rules with NMW and SSP, message us to see how we can help.

If you do not understand the personal allowance threshold give us a call on our Cardiff or Bridgend office where the team will be happy to help.