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!

Big news from PBS! 

We’ve got some big changes coming up at PBS starting today! I sent a very excited e-mail a few weeks ago to my existing clients but as today is the official launch date I can now share the news with everyone!

Some of you who’ve asked us for accountancy services in the past will know of Martin from BAT Services, as he’s been the accountant we have recommended, equally we do some bookkeeping work for them, a relationship that’s worked well for both of us. Over the past few months we’ve looked at developing this relationship and as such, from 1st October we’ll be merging the two companies under the name of Practical Bookkeeping, Accountancy and Taxation Services (or PBATS) 

Martin has over 15 years experience as an accountant and we’re both looking forward to being able to offer a full range of services to our clients. Personally I’ve known Martin my whole life – he’s my older brother! As such we’ve similar personalities so I’m confident that as we get on, you’ll get on with Martin too! 

So, to cut to the chase, you’ll be wanting to know what will actually change?

The short answer, is nothing – well unless you want it to!

We’re not going to be pressuring anyone to move to us for accounting services, we’re more than happy to continue to provide the same services as we do now to you, however big or small.

The extra services we’ll be able to offer from 1st October 2019 are:

  • Annual statutory accounts (Limited company accounts)
  • Corporation tax returns (Limited company tax returns)
  • Company secretarial services
  • Tax advice and planning
  • Budgets, forecasting and cash flows
  • Management accounts and analysis
  • Business advice and strategy
  • Independent examinations

We’re more than happy to provide you with a quote for any of those, be it because you’re not completely happy with your accountant or you just want to compare prices, whatever the reason we’d be happy to help. 

We’re also developing our social media side further and as part of this we would like to share what our customers are doing, to aid with this we’ve taken on Charlotte in a part time role, so she may be in touch to make sure we’ve got all the right social media details of your company so we’re following the right people! 

And of course, you’ve already read our recent blogarticle introducing Susan who we took on back in May, who looks after all of our payroll and assists with our day to day bookkeeping services.

So lots of changes have already happened and are happening, all for the better we hope! I still want to keep our personal relationships with you all so don’t worry, you’ll still be hearing from me and seeing me just as much as you always do, I’ll just have a great support team working with me! It may even mean a blog entry or two not written by me!

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. 

QuickBooks Advanced Training

Yet another day in London last week, this time accompanied by my husband, to attend training for Advanced Online Certification of QuickBooks. Held at their training centre near Tower Hill, it was a good refresher of some skills that we don’t use day to day, we learnt a few tips and tricks and proved we’re actually quite good at what we do!

As with QuickBooks connect, lovely food and drink and a lovely training centre to spend a day in, while the classroom is quite intense to ensure you get through everything in a day, the centre is very relaxing and regular coffee breaks help keep you awake! The day ends with a timed exam, lasting a maximum of an hour, thankfully with your result at the end so no waiting to see if you passed! We did both pass, so expect to see our new Certified ProAdvisor, Advanced Online badge on our website soon!