It's quite an easy life being an account cat here at CS Accounting. Days just pass by as I sit here observing the everyday activity of an accounting practice. Lots of clients pass me on their way in and out of the office and from the conversations I hear it seems that everyone in some way or another needs some sort of help. heading element
Running your own business is not easy. Most people who set up their own business do it because they want to do what they love doing and what they do best. That doesn’t usually include things like accounting, HR, Health and Safety, IT, legal – need I go on. Sometimes there are things that you simply can’t do yourself but most of the time it’s things that you don’t want to do yourself or you don’t feel confident to do.
Take payroll for instance. There are lots of payroll programmes out there that make payroll really simple. Four clicks and your employees are sorted for another month. But what about everything else that goes with it – contracts of employment, sick pay, pensions, tax codes, holiday entitlement, NLW/NMW….. Getting any of those things wrong could land you in all sorts of trouble like tribunals, penalties and even an entry on the ‘name and shame’ list.
What you need is advice and support. People and organisations you can turn to when you’re just not sure about what to do. So where to go for this help and advice? It doesn’t have to be costly, there is loads of free advice out there. I often browse through this magazine (when no one is looking of course) and there are articles about many aspects of business. Social media is a good source too, I’ve discovered it’s not only birds that tweet. If you follow sites relevant to what you do then there will always be news about recent updates etc or even just a blog about how someone dealt with a particular problem.
You need to be careful about who you turn to for advice of course. Even I’m amazed at some of the ‘man in the pub’ stories I hear. “You don’t pay tax on the first £70k profit if you’re a limited company” – I wish! Or “I can have two businesses as a sole trader. One with just me doing the work and one where I employ the lads to do the same work. Then the turnover of each will be lower than the VAT threshold so I won’t have to register”. Don’t think that one will work either.
All this advice is all well and good but it’s the application of the advice to your particular business circumstances that is important. What you need is a network of trusted advisors. According to a recent survey by IFAC (International Federation of Accountants) accountants remain the most trusted advisors to SMEs. Those advisors need to know your business almost as well as you do. I know they’re always asking questions here. I used to think they were just nosy but as I listen to the conversations I can see it’s all about tailoring the advice to the business. It’s no use talking about HR to someone with no employees!
The timing is quite critical too. I can remember one client, a few years ago, who left the office almost in tears. He had finally bought his dream company car, second hand but a real bargain, he was so proud of it. It was a Range Rover with a ‘price when new’ of £45k and it landed him with a £7k tax bill. A quick phone call before he bought it could have warned him about how the car benefit was calculated and how much his ‘bargain’ would cost him.
Having taken some advice you need to understand what the impact will be on your business. If you are expanding, for instance, and you have some fantastic new contracts you need to know how that will impact on all the other areas of the business. They’re good at that here, looking at forecasting, cash flows, staff levels and so many other things. It’s not just about getting the numbers to add up!
So before deciding to just ‘do it yourself’ consider how confident you are and what your time is worth in other areas of both your business and personal life. Is it worth spending a lovely sunny day trying to get your accounting up to date when your accountant can do it in half the time and you can be playing with the kids. And ask questions. It’s much easier to do things correctly than to try and correct the mistakes afterwards. As the boss always says, there are no silly questions, there are just questions. It doesn’t cost you any extra either, not here anyway, the clock doesn’t start ticking when you pick up the phone.