Christmas isn’t for paperwork

In case you haven’t noticed, Christmas is coming! With the majority of our clients being small businesses, it probably signifies a time with a bit of down time where no doubt instead of resting you’ll be trying to catch up on paperwork. If that’s you then don’t forget, we’re here to help! Even if it isn’t directly bookkeeping related work that’s eating your time, we can relieve the pressure there to let you concentrate on running of your business and importantly at this time of year especially, take a break!

It may be there’s nothing obvious we can do for you but even just having a chat through might help – feel free to give us a call to chat things through! I often come away from networking sessions with little nuggets from others which can help a new idea grow or help improve our internal systems, one of our aims for next year is to share more of these and our customers posts through our facebook page (do follow us if you’re not already!) so feel free to give us a nudge if there’s anything specific you’d like us to share.

Prices for bookkeeping

When I was first starting out as Practical Bookkeeping, one of the things I was very unsure about was pricing. Not the amount to charge people but if I should advertise these prices. Partly I was put off as I didn’t want to give a cost out for a package and then have a client expect that price, even if they didn’t quite fit in that category, as everyone’s different. However, sounding this out with my Husband he (unsurprisingly!) disagreed with me, encouraging me to give some guide prices on my website. His argument was that he never used a bookkeeper or accountant when he was self employed as he assumed it would be expensive and that it was better to spend his Christmases holed up in his office at home doing a year’s worth of expenses, but if he’d known the costs he’d have probably used one. He didn’t try too hard to find the costs out, he certainly didn’t talk to anyone but did have a google and didn’t see anything obvious.

Although this was a few years ago and more people do put their prices online now, so he could have found them, it did make me pause and think, as I had done a few quotes where people had been shocked at the price, both for being too much and too little, showing they didn’t really know what to expect. So from a plus side for me, if the people who couldn’t afford or justify the cost had more of an idea they probably wouldn’t have asked for a quote so would have saved me time from quoting a job that didn’t happen. More importantly it means my potential customers are asking for quotes with an idea of what it might cost, so even if they need an extra hour of bookkeeping added to a advertised package to get everything done the cost will still be around the advertised amount, hopefully meaning they’ll go ahead!

So while I won’t say any costs here so they don’t go out of date if I change anything (There’s some package costs here for companies and here for self employed people on the website), I am now happy to say what we charge, especially as we feel our rates are very competitive and it means people are less shocked when they get their quote! We also try to charge a fixed monthly fee wherever possible to help our customers know what they’re going to pay, great for budgeting and cash flow!

Of course, like I said earlier, every customer is different and they don’t all fit into the packages we advertise, they are just guides which we can customise to fit everyone’s requirements. We also review the package and charges after the first regular 3 months (so after any catch up or set up work), then annually from there, ensuring that the package and price reflects the work required as businesses are always changing! For example, the hire of an administrative assistant might mean you need less from us so we can reduce, or you might take on additional contractors and have extra bills to process and CIS returns, we’ll always ensure that our packages are right for your business.

We also understand that some times things will be changing short term, for example if you provide seasonal services so are busier some months than others, while your work load for us will go up and down we are happy to bill you the same each month, knowing it will all average out over the year (obviously unless you don’t want us to!).

So don’t be scared to ask for a quote, if you fit into a package on the website then great, if not then we’ll make one for you! Just get in touch!

0% or no vat – Which is it?!

I often hear shouted from another room a question along the lines of “Is it No VAT if I’m doing a PO for someone who’s not VAT registered”, usually signifying my Husband is working from home and has forgotten the difference between 0% & No VAT entries on QuickBooks. He’s probably not alone, as they produce the same result for him when using either when raising a PO or processing his expenses, but they do make a difference further down the line, as using the wrong one can make things appear on a VAT return when they shouldn’t or the opposite, so it is important to get it right! Plus it makes life easier for your bookkeeper if you get it right first time, which will keep them happy!

Essentially, 0% is for zero rated items like most food & postage, plus suppliers that could charge VAT on their services if they were VAT registered, but currently aren’t. No VAT is for tax payments & wages. Simple as that. And now I’ve written this blog my husband can look at this rather than shouting through the house for help!

Welcome Susan!

May saw us taking on our first member of staff, Susan.

I originally met Susan when she was my maternity cover 5 years ago, when I returned part time so Susan stayed on where we became friends and worked well together. After I left we stayed in touch, Susan left and moved into another job and it was while she was there that I mentioned potentially needing to take someone on to ensure PBS could continue to provide the same level of service as we expanded.

She (thankfully) was interested in the role and officially joined us. She’s spent the first few weeks finding her feet, seeing how I’ve set the systems up and getting to know our client base, but is already proving a great asset to PBS.

Initially I’ll continue to be the main point of contact for all existing clients, with Susan assisting me where needed, but new clients will have the pleasure of dealing with Susan from the outset. 

I’m more than happy with my decision to employ Susan, I know we can get along both inside and outside of work and that her work ethic fits the PBS way of doing things. It’s not to say I’ll only employ people I know, but as the first employee she’s a great fit! 

Did you need to go digital?

With the first monthly VAT submission due a few months ago in June and the first quarterly MTD VAT submission due a few days ago on 7th August, we’ve heard of some people who were still unaware they needed to comply. Will there be a raft of fines sent out by the HMRC to businesses who haven’t submitted digitally or will there be any leniency? 

The official notice on MTD for VAT introduced a ‘soft landing’ on penalties for the first 12 months, but this is only in respect of the digital links used for transferring or exchanging data between programs, so claiming to be unaware of needing to submit digitally will fall outside of this scope. Indeed HMRC have the power to charge a penalty for failure to keep the required VAT records with a maximum penalty of £500. 

The HMRC also have the power to charge a penalty of up to £400 for filing a VAT return other than electronically without their prior agreement (VAT regulations 1995 reg. 25A), a power that’s not been used much but which will be extended to include using compliant software to file.

Again, a ‘soft landing’ approach is expected but only when a trader has made reasonable efforts to comply – saying you didn’t know you needed to is again unlikely to fit the bill. 

So if you find you should have gone digital but didn’t, please feel free to get in touch and we’ll help you get on the digital track.

We’ve moved!

We should have shouted about this more and definitely sooner than we are now but we’ve moved!

Originally run from my home, we officially moved into our lovely office in Leigh-on-Sea during April. We’re at 1168 London Road if you want to call in and see us, although do check someone will be there as we’d hate for you to have a wasted journey and we’re still on the road a lot visiting clients, that’s not going to stop now we’ve got an office! 

As part of our lease we’ve also got access to a meeting room within the Old Gasworks on Progress Road so if it’s easier for you to come to us then it will no longer involve my dining table at home! 

Finally, you may have noticed I’ve used the term us above, it’s not me being posh, we’ve also taken on our first employee in May too, however I’ll do a lovely blog introducing Susan soon!

Do I need a Bookkeeper?

There is no simple answer to this question – the fact is that anyone can do their own bookkeeping. This might sound crazy coming from a Bookkeeper but with modern, digital software making this even easier most sole traders with simple income and expenditure can indeed do their own bookkeeping.

The question that most small business owners should be asking is ‘is doing my own books a productive use of my time?’ Every hour/day/weekend you spend on your bookkeeping is time you aren’t productively earning for your business.

It doesn’t stop there – while you are happily processing your income and expenses and possibly even your tax return, are you keeping up to date with compliance changes? Tax thresholds? Are you claiming all the tax-deductible expenses you are entitled to?

I think once you get to the stage where bookkeeping is the bottom of the to do list and never moves up or becomes a stress that keeps your business from progressing, you’re overdue a chat with a bookkeeper about how they can help you.

We understand the huge step outsourcing this integral part of your business can be, we also believe it is an affordable and viable option for many small businesses. 

We offer no obligation consultations to discuss your bookkeeping needs – however big or small, so contact us to arrange a coffee or chat.

How to find a great Bookkeeper

Outsourcing your bookkeeping is a big deal – you know it’s the right thing for your business and your sanity, but where do you start?

A personal referral is by far the best place to start – if you have a trusted friend or business acquaintance who can recommend someone they have worked with you are off to a great start!

Someone with experience in the industry is hugely important. A bookkeeper with experience and knowledge in accounting can make a huge difference when it comes to passing records to an accountant. A tidy set of books handed over at year end takes the stress out of tax return time. (Not sure what’s the difference between an accountant and a bookkeeper? Have a look here)

Relevant qualifications, licenses and insurance should also be seriously considered. Bookkeepers can be qualified and licensed by a number of professional bodies (AAT, IAB to name 2) but should always have professional indemnity insurance as well as Anti Money Laundering cover – for their own protection as well as yours.

Finally, once you are happy with the above you need to be able to trustyour bookkeeper. You should feel comfortable with them, feel you can ask questions and seek advice from them. 

We understand the huge step outsourcing this integral part of your business can be, we also believe it is an affordable and viable option for many small businesses. 

We offer no obligation consultations to discuss your bookkeeping needs – however big or small, so contact us to arrange a coffee or chat.

What is bookkeeping and why is it important?

I touched on this recently when writing the What’s the difference between bookkeeper and accountant? blog but will go into a little more detail now. Whether you need an accountant for filing purposes at the end of the year or not, having a well-prepared set of books will make your life easier and could save you money! Presenting your accountant with a well looked after, accurate set of books will make their life a lot easier than being presented a box of invoices and receipts and make your bill a lot lower too! 

Even if you get your bookkeeper to do your end of year self-assessment and reporting on your business, or even do it yourself, a good set of books is still an essential requirement, as they’ll make it so anyone looking can easily find the information they need! It’s not just useful for self-assessments, your books are a wealth of information about your business just waiting to give you an insight from a different angle.

Reports can be viewed easily to allow you to analyse the financial side of your business easier. I’ve mentioned before the case where one of my clients had us setup some reports to get e-mailed monthly to them, analysing a particular client who they did a lot of work for. The reports showed them that although they spent a lot of time working for this client, the profit didn’t justify that amount of time. This caused a restructuring of how they worked with this client, freeing them up to do more work with more profitable customers. 

So many people see their books as something they do simply to meet the legal requirements of them, so they’ve figures to submit in their tax return. However, they can show you so much more, it’s often people either don’t know how to get something from them, don’t have time to or just don’t want to spend their time doing their books, causing resentment towards them. My husband was a great example of this (before I met him, I should add!). He used to lose every Christmas to doing his books, as he was “too busy” to do this during the year doing the work that he could invoice. This timeframe meant they were done just in time for self-assessment, no time to analyse them in any form, they were just there for that one legal requirement. He’s no longer self-employed so I can’t help him, but he has said he wonders if he’d done things differently if he’d had time to actually look at how his business was performing, other than looking at how much money was in the bank! 

Existing customer or not, please feel free to have a chat with us about how we can help you get the most out of your books! 

So what is the difference between a bookkeeper and an accountant?

A question that we often get asked by people is what is the difference between us and an accountant? While there’s a lot of information out there on the web about this, we thought we’d do a little blog to try and help too! 

Bookkeeping is essentially the recording of all the financial transactions within the business. Accounting is the interpreting, analysing, reporting and summarising of the financial data. So, without the bookkeeping step, the accounting cannot happen. While you’d think from this that bookkeepers will therefore handle the recording part while the accountants analyse, it’s not always that clear cut! The roles often overlap, with bookkeepers analysing and reporting on the data they’ve entered, both for client analysis and also as part of checking their work. Accountants can also create and modify data as part of their analysing, such as moving items from one account to another to help with tax liabilities. 

Some accounting firms will offer a full service, where they perform both functions, however they’re often done by separate departments so it would still be a bookkeeper performing the bookkeeping role, the accountant doing the accounting and this situation is where you’d find less crossover in the roles, sticking to their defined areas. 

Having a separate bookkeeper can be an advantage for many reasons. Either employing a bookkeeper or using an external one such as ourselves can be more cost effective than using an accountant alone. Giving your accountant a looked after and nurtured set of books makes their work easier, plus if they do have any questions, they can speak to someone in technical terms and get the answers they need easier. The bookkeeper can also generate reports using the transactions, handling some of the accounting process again in a more cost-effective way, plus knowing your business well will allow them to know what you need to know.

Bookkeeping and accounting can appear to some people as the same thing, as their both working with financial data. Some people, especially the self-employed, don’t even need an accountant, a bookkeeper can take care of all their requirements. We pride ourselves that we advise our customers honestly when we feel it would be beneficial to them to have an accountant work directly with them alongside ourselves, rather than trying to hide it! We work with a number of accountants who we can get help and advice from as required on your behalf when required, so starting with a bookkeeper is often a good starting place! They certainly wouldn’t end up costing you more than just going with an accountant!

If that’s still left you with questions, why not get in touch with your questions and we’ll do our best to help you.