The need for payroll services increased dramatically last year. Since the government established the furlough system and new standards, there has been a surge in interest in payroll outsourcing. Experts predict that the trend will continue in 2021, with more SMEs looking for their bookkeepers to include payroll in their services. 

Payroll has had a shady reputation among accounting companies for a long time: it’s either a bother, a burden, or add-on management inside a larger package that most accounting firms give out of necessity. 

We discussed the current developments in payroll management in this blog to see what the future holds for the payroll service business. 

Table of Contents 

1. Payroll Outsourcing: a necessity during WFH
2. Data security
3. Investing payroll profits in Upskilling team members
4. Seamless communication will bring effective payroll results
5. More focus on clients

To sum up: 

1. Payroll Outsourcing: a necessity during WFH

According to an accounting firm’s research “Payroll Outsourcing Trends 2021,” over 81 percent of bookkeepers who outsourced payroll experienced a 5 percent to 40% increase in their overall income. 

The study also illustrates the pandemic’s socio-economic conditions. It demonstrates the growing need for payroll services as well as the challenges that come with working from home for accountants. Accounting businesses in the United Kingdom have been facing significant problems in the aftermath of the epidemic, and putting the weight of payroll management on their workers is not a wise option. More and more companies will outsource payroll tasks while working from home in the future. 

2. Data security

Many outsourcing companies make strenuous data security measures and are legally obligated to meet the GDPR or BSI rules in terms of data protection. 

As a result, accounting firms will be able to move past their underlying concerns about data security risks associated with offshoring payroll and look forward to a higher level of dependability and polished skill from external partners in the form of better results, meeting agreed-upon objectives, and timely submission of work. 

3. Investing payroll profits in Upskilling team members

According to the same study, 50 percent of the 87 percent of respondents that benefited from payroll outsourcing invested their savings on enhancing training cycles with the end objective of reinforcing practice management during WFH. 

Upskilling colleagues is the next area where money will be spent. There is a greater requirement for in-house teams to be prepared to react to changing client expectations, and digitalization occurred throughout WFH. 

Successful outsourcing of time-consuming tasks like payroll provided the cash and time needed to strengthen an accounting firm’s two most important backbones: people and procedures. 

4. Seamless communication will bring effective payroll results

The discussion of what contact with an overseas partner implies for the outsourcing experience continues apace. Accountants’ perceptions of regular updates and openness, similar to those of their in-house staff, can only improve if their communication barrier is overcome. 

When asked what the most important aspects of a successful payroll outsourcing experience are, 43 percent of respondents said good communication, a quarter (25 percent) said “greater compatibility with the offshore organization,” and finally, 12 percent said customer support service is important. 

5. More focus on clients

According to the study, 97 percent of accountants felt that outsourcing payroll in the previous six months increased customer satisfaction and gave them more time to bring on new clients. 

Accountants who concentrated more on customers and freed up internal resources ended up putting their outsourced revenues into bettering digital measures. 

During the frequent public lockdowns, when digital bookkeeping frameworks were the only method to exchange reports and information: receipts, reports, and contracts, for example, this benefited clients. 

To sum up: 

Fruitful payroll management and processes are critical to a well-performing business. 

While these trends are still in their early stages, they all provide significant benefits, and we expect them to become the norm within a few years. 

CBM Accounting has a record of creating 15,000+ Pay slips per month. As a leading accounting & bookkeeping service provider in the UK, our accountants offer a free 10 hours trial. Get in touch to enjoy your free trial. 

020 3002 0436 

[email protected] 

 

What is Time Series Analysis? 

Time-series analysis is a technique for analyzing a set of data points over a period of time. Rather than taking data points at random or randomly, time-series analyzers record data points at regular intervals over a set period of time. This type of research, on the other hand, entails more than simply collecting data over time. Time-series data is distinguished from other forms of data by its ability to show how variables change over time. 

In other words, time is an important variable since it reveals how the data changes through time as well as the ultimate findings. It provides an extra source of data as well as a predetermined sequence of data dependencies. To achieve consistency and dependability, time series analysis generally requires a high number of data points. A large data collection guarantees that your sample size is representative and that your analysis can cut through noisy data. 

The Need for Time Series Analysis 

Time series analysis may be used by businesses to determine what is creating trends or systemic patterns across time. Data visualizations may be used by business users to detect seasonal trends and understand more about why they occur. Thanks to today’s analytics technologies, these representations can now go well beyond line graphs. When companies analyze data at regular intervals, they may use time-series forecasting to predict the possibility of future events. 

Time series forecasting is part of predictive analytics. It can indicate data changes that are expected to occur, like as seasonality or cyclic behaviour, allowing for a better understanding of data components and better forecasting. 

Time series analysis is used to evaluate non-stationary data, or data that changes over time or is influenced by time. Time series analysis is widely used in businesses such as banking, retail, and economics since money and sales are always changing. 

How Time Series Analysis Impacts Industries? 

Researchers and companies use time-series forecasting and analysis as one of the most common quantitative approaches. Forecasts are made using this method and are based on both historical and current data. Both the autoregressive integrated moving average (ARIMA) modeling and the vector error correction model (VECM) backed by time-series decomposition, commonly known as the two-step technique, assist us in drawing appropriate conclusions for time series analysis. 

Time Series Analysis is used to identify these trends, patterns, and seasonality of a series of time-varying measurements. If you’re looking to get your data cleaner, look no further than time series analysis. It provides an opportunity to clean up your data so you can go about analyzing it properly. 

Choose CBM Accounting for Effective Time Series Analysis Services 

CBM Accounting has been a pioneer in providing the best quality time series analysis and a series of other market research services to global clients. We have some of the most experienced and skilled researchers on board who can take care of all your time series analysis needs. We make use of the latest tools and technologies while delivering top-notch services. 

If you are looking for a reliable and effective time series analysis service provider, then you have come to the right place. Get in touch with us today! 

Table of Contents 

There are several types of corporate shares. 

Shares of Ordinary Capital 

Shares of Preference 

Shares in Management 

When starting a business, how do you distribute shares to directors and investors? 

Dilution of the share price 

The Burden is Shared 

There are several types of corporate shares. 

When a company distributes shares, it divides them into several classes, each with its own set of rights. 

Owners, directors, investors, and workers can all be shareholders. Different share classes allow for different forms of ownership, different strategies for firms to attract certain investors, and the ability for enterprises to provide shares as employee perks. 

Shares of Ordinary Capital 

When it comes to allocating your shares, you have a variety of options. Standard ordinary shares are the most popular form, and they give all ordinary shareholders, regardless of their ownership proportion, voting and dividend payment rights. 

It should be noted, however, that not all ordinary shares have the same structure. They can be offered as “non-voting,” removing the ability for certain shareholders to vote on matters such as the company‘s future direction. These are frequently utilized by workers as part of their benefits package, as well as family members who have been named as shareholders for tax purposes. 

Shares of Preference 

While preference shares are typically non-voting, they offer shareholders with a predetermined proportion of earnings in the form of dividends, as well as a priority on capital returns in the event of a company’s bankruptcy. 

Redeemable shares, which allow corporations to purchase back shares at a later date, are another popular choice, especially for developing enterprises. These are ideal for firms that need finance in the early stages but want the option to reclaim ownership once they have their own money. 

Shares in Management 

Management shares are a means for shareholders to gain more control. The most typical way to do this is to provide more voting rights rather than monetary compensation, such as multiple votes per share or selling a larger number of ordinary shares at a cheaper price, to guarantee that certain shareholders have the appropriate voting and decision-making weight. 

When starting a business, how do you distribute shares to directors and investors? 

How you distribute shares to directors and investors is mainly determined by how much control or ownership you want to provide them in exchange for their contribution or investment. 

Voting and management shares should be allocated to smaller groups of directors and owners, while non-voting or redeemable shares should be allocated to larger groups whose prospective involvement in the firm is initially unknown. This is a good approach to prevent a squabble over shares and profits. 

When a small firm cannot afford higher pay, shares can be distributed to employees as appealing non-monetary benefits to recruit talent into the organization. This also helps with workforce loyalty. These would be shares with no voting rights. 

When considering a personal investment in exchange for shares in the company, keep in mind the issues that arise when the company expands and the factors alter. 

Non-voting shares allow you to financially recognize investors without relinquishing significant influence over your company, which you may choose to maintain in the hands of a smaller number of directors. 

Dilution of the share price 

You can counteract outside factors having too much influence over the course of your firm by diluting shares. Those supporting your firm can acquire a significant seat at the table without exerting undue influence over its future direction by awarding additional shares and diluting the pool. 

The ability of directors to assign shares to others must also be taken into consideration. All of this must be specified in your company’s articles of association, and it will have a significant impact on the future of your firm. 

The Burden is Shared 

How much control you wish to hand over to directors and investors is for you to decide however, doing so is no easy task. 

Whether you want to allocate share to investors to gain funding, to employees as benefits or to family members to benefit from tax free dividends seeking advice from accounting and legal professionals ensures your business is protected. 

For further assistance in understanding share classes, and how to allocate them within a shareholder agreement, get in touch. We are small business accountants offices in London . 

As a firm of ACA and ACCA qualified accountants and experienced business consultants we offer a full range of tax, accounting and businesses services. Talk to us today or get a quote online now. 

A variety of reasons can lead to the failure of a business endeavor. It’s sometimes due to a lack of customer interest, and other times it’s due to poor marketing strategies. But arguably the most lethal cause to company failure is a lack of financial management skills. 

“[Financial errors] are often the result of poor financial planning on the front end of launching a firm,” said Marc Price, business author and director of operations at ExpertBusinessAdvice.com. “The real costs of starting a firm are often underestimated by entrepreneurs. As a result, without adequate finance, dealing through the first growth pains that may occur after the doors have opened may be jeopardized.” 

Price, who is also an entrepreneur, understands how easy it is to get into a financial quagmire. Small business owners make five frequent financial management blunders, according to the co-author of “Business Finance Basics” (Nova Vista, 2014). 

• Having insufficient monetary reserves.

  Entrepreneurs understand that they will most likely require money to invest in the start-up of their firm, but it may take several fiscal quarters for the company to generate a consistent revenue, much alone earn a profit. As a result, make sure you have enough operational funds to get started. Don’t be fooled by wishful thinking that the money will magically appear. 

• Being reliant on plastic.

  For early-stage survival, some small business owners are obliged to use credit cards, especially if they haven’t prepared adequately. High interest rates and yearly fees are associated with credit cards. Having enough operational cash, whether from a small company loan, a capital injection, or your own funds, can help you avoid going into credit card debt. 

• Combining personal and company money is a bad idea.

  It may be tempting to step over the boundary, but maintain these two entities distinct. It simplifies accounting, budgeting, and reconciling two sets of records, as well as calculating the business’s real earnings and losses. 

• You’re underpaying yourself in compensation.

  It may seem like a good idea to put all of your revenues back into your firm in the early phases of your company. However, failing to compensate yourself along the road may jeopardies your personal money and financial status. 

• Not having a well-organized receivables system.

  Payment conditions should be printed on the back of every invoice, and payments should be collected in a logical manner. Make sending timely reminders a part of your daily routine. 

Price advises new and aspiring entrepreneurs to seek guidance from other business owners and financial specialists. 

Before reviewing some of the available funding options for SMEs, let us explore first of all what we mean by SMEs, why they are essential and why they frequently find it difficult to raise financing. We explore in this article the potential sources of funding to be used by a SME. More contemporary crowdsourcing and supply chain finance options will be given specific attention. We will finally examine how governments typically attempt to support the SME sector and why. 

Table of Contents 

 

What is an SME? 

Why are SMEs important? 

Why do SMEs find raising finance difficult? 

What are the potential sources of finance for SMEs? 

Example 

 

Why and how do governments help finance SMEs? 

What is an SME? 

The fact that a SME is something greater than those companies that are just a self-employment vehicle for their owners is universally acknowledged. SMEs are also unlikely to be listed in any stock exchange and own a relatively limited number of stockholders. Indeed, most stockholders come from a large family quite often. The term SME therefore applies to a wide variety of companies. 

Why are SMEs important? 

The word SME has a fairly broad spectrum of companies, as we have just shown. Thus, for the economy of many nations, the sector of SMEs as a whole is highly significant. Estimates vary greatly, but the UK small and medium sized enterprises are likely to account for around half the job and half the national revenue. 

As tiny SMEs are typically flexible and more innovative than bigger firms. They are comparatively small. In fact, small and medium-sized businesses are frequently seen better to take up new technology and trends. It is obviously vital that this happens for any economy. For certain successful SMEs, it is also because they are purchased by a bigger firm with the financial wherewithal to make full use of the potential of the SME. The Small and Medium-sized Enterprises industry has been helpful in helping a bigger business to develop and to sustain its success in the future. 

The SME sector is expected to continue to develop in economies, such as the UK, where the manufacturing sector has decreased as a share of overall economy activity and the service industry has grown ever more significant. This is because economies of scale are often less relevant in the service industry than they are in the production sector. SMEs are therefore simpler to survive and prosper in the increasing service industry. 

Lastly, it is vital for SMEs to grow, as a few of today’s SMEs might potentially be tomorrow’s largest corporations. 

Why do SMEs find raising finance difficult? 

SME managers are regularly complaining that the lack of capital prevents them from developing and from making full use of beneficial investments. SMEs frequently call the ‘funding or funding spacing’ this gap between the cash available to them and the funding which they might employ productively. As consultants to SMEs, we must understand why this gap exists. We must comprehend. 

First of all, there is a restricted provision of investment money. Once potential investors have fulfilled their requirements and want to spend and pay taxes, nothing remains to be invested. Another problem in the UK today is that investment returns on a common bank account are so low that they do not appear to be desirable for investment. 

Similarly, the restricted supply of investor money has a competitive market. Governments and bigger corporations are very keen on funding and the small and medium-sized business sector might thus be squeezed. 

The SME sector is tending to bear on account of the high degrees of uncertainty and risks that SMEs are seen as less appealing investment opportunities than many others. This risk perception is based on a number of causes, among which: 

• SMEs generally have weak records in increasing investment and returning their investors appropriately 

• SMEs typically do not have internal controls or are highly restricted 

• The external controls in SMUs are frequently limited. For example, they are unlikely to comply with the regulations of any stock exchange and are unlikely to draw a lot of journalistic review since they are large. Many SMEs in the UK have no longer had to audit their annual accounts 

• SMEs generally have a dominating owner-manager who cannot decide much. 

• SMEs frequently offer little actual security asset. 

As a result of it, investors are uncomfortable with investing in small and medium-sized enterprises as they are worried about how the funds may be used and their returns. So it is easy for an investor to refrain from investing in a SME, particularly if there are so many other investment possibilities for them. 

Accountants can do nothing to change the availability of these funds or their competitive market, but can help by demonstrating how a SME is able to decrease its perceived risk, thereby increasing its capacity to raise funding. SMEs, for example, are more likely to be appealing to investors if they prove they have treated past investors well, have embraced important domestic regulations, and have a strict, documented approach to decision making. 

What are the potential sources of finance for SMEs? 

There are really several potentially financing options for small and medium-sized enterprises. Many have practical difficulties though which might restrict their effectiveness. Some of the main sources and constraints are mentioned briefly below. Crowdfunding and finance of the supply chain are therefore more carefully explored. 

The SME owner, family and friends

This might be a very strong funding source because those investors are not only financial, but also might want a lesser return than many other investors. The fundamental constraint is that most of us have a fairly restricted financial resources we can raise individually and through friends and families. 

The business angel

The company angel is a rich person ready to risk investment in small and medium-sized companies. One restriction is that these people are not widespread and very frequently are quite specific about what they are willing to invest in. If an angel is interested, he may become quite beneficial for SMEs, since they frequently have tremendous business skills and numerous useful relationships. 

Trade credit

SMEs can accept loans from their suppliers, like any other firm. However, this is short-term and, in fact, the ability to extend the credit duration can only be limited if your suppliers are major firms that have recognized them as a potentially dangerous SME. 

Factoring and invoice discounting

These two methods of funding have effectively enabled a firm to raise funding against the safety of its outstanding debts. Again, this funding is only short-term and frequently costs more than an overdraw. However, one aspect of these financing sources is that when a SME expands it will increase its outstanding receivables and thus it will also increase its quantity of borrowing from its factor or an invoicing discount. Factoring and discounting of invoices are two of the very few financing sources that expand automatically as the company grows. 

Leasing

Rather than buying leasing assets is frequently highly helpful for a small and medium-sized business since it avoids increasing capital costs. However, only physical things such as automobiles, machinery etc. truly are feasible to lease. 

Bank finance

Banks may be prepared to give some kind of overdraft and willing to make long-term loans when this loan may be secured in large assets like land and buildings. However, it is generally more difficult for SMEs to get medium-term credit for financing transactions, because banks are traditionally relatively conservative. The losses from a defaulting loan require several excellent loans to restore this loss. That is understandable. Many SMEs are so ending up funding short-range financing, for example, for medium-term and perhaps longer-run assets. It’s badly matched and not very good. This problem is sometimes referred to as the maturity gap, because the maturities of assets and obligations in the company are inadequate. 

In addition, banks are typically forced by the owner-manager of the SME to provide personal guarantees, which implies that the owner-manager must risk his personal property in order to finance the firm. 

The venture capitalist

Very frequently a risk capitalist firm is a subsidiary of a corporation which has large cash assets to invest. A risky, perhaps high-return portion of its investment portfolio is the risk capital subsidiary. Many banks will thus have venture capitalist affiliates. A corporate idea has to be developed by the risk capitalist in order to attract risk capital investment and to produce the high returns. Therefore, venture capitalist financing may not be viable for many SMEs operating in normal businesses. Moreover, a venture investor does not want to continue to be involved in the long term, and so every proposition to him must explain how after a number of years he may “walk out” or release his value. This frequently happens if the firm is sold to a larger company in the same business or the company is grown to such size that it may have a stock exchange list. 

Listing

A SME would become a listed business by creating a stock exchange list, which will mean that the increase in funding is less problematic. However, the firm must develop to such a level that a listing is viable before a listing may be considered. Many small and medium-sized businesses can never expect to do so. 

Supply chain financing

The financial sector tracks the value of the supply chain financing (SCF). The SCF, since it fosters collaboration among buyers and supply chain salespeople, is relatively new and is distinct from typical working capital funding techniques, such as settlement factoring or giving discounts. There was traditionally rivalry since the purchaser sought extended credit and the vendor wanted rapid payment. SCF works particularly effectively if the buyer’s credit rating is better than the seller. 

Example 

Company A buys products from company B (with A+ credit rating) 

(Who has a rating of B+ credit). Co B agreed to grant credit to Co A for a period of 30 days. 

Co B invoices Co A. 

Co A approves the invoice. 

Co A is expected to pay the amount due to its financial institution – ‘Bank C’ –
in 30 days at which point the funds are immediately remitted to Co B. 

Co B may nonetheless ask bank C for funding before the deadline. If you do, you will be paid less a reasonable discount. This discount is probably lower than if Co B uses standard factoring or discounting invoices. Because they utilize Bank C (the financial institution of Co A) and profit from a higher credit rating from Co A, the debt being the debt of Co A, and this was verified by the approval of the invoice Co A. 

Likewise, if CoA want to withhold payment after 30 days, it may. However, some interest will be payable when Co A eventually pays Bank C. This interest rate obviously reflects Co A’s credit rating. 

In order to efficiently link the customer, seller and financial institution, technological methods are utilised. These technologies efficiently automate the business and financial process from start to finish. 

SCF may provide substantial advantages to the supply chain and span more than a step. Perhaps most importantly, when the supply chain, as is the case in the automobile trade, continually moves with substantial value. Currently, SCF is only utilized among a small number of firms, but its utilization is projected to increase substantially. This source of funding is, like with factoring and invoicing discounting, limited short term. 

SCF may of course offer significant support for small and medium-sized businesses that provide a high credit rating, or even for suppliers of bigger firms. As the technical solutions necessary for SCF work are spreading and SCF growing, more and more small and medium-sized enterprises are expected to profit. 

Crowdfunding 

Crowdfunding includes the financing of a company via the increase of funds from many individuals (the crowd) and quite frequently over the Internet. Crowdfunding has risen fast, with crowdfunding projected to raise more than US$5 billion worldwide in 2013. More than 500 crowdfunding sites are available on the internet currently, and every day more than 400 crowdfunding actions are started. 

The online platforms are set up and maintained by moderating organizations that connect the initiator of the initiative together and organizations and people that support the concept. Different platforms have various rules to evaluate the concepts they support and monitor those who are prepared to offer funding. So while using these platforms considerable vigilance is essential. 

Crowdfunding finance may be invested in the debt or the capital of the financing initiatives. Some crowd-funding is done “always” where the recipient keeps any cash received, some are made “always or nothing” in which the recipient receives the funds only if the sum necessary for funding the project is raised within a certain timeframe. A charge is borne by the crowdfunding platform, generally a percentage. 

Crowdfunding is characterized by allowing individuals to look for ideas and initiatives in which they believe or believe. These investors are therefore occasionally ready to take greater risk and/or accept fewer profits than normal. Also, there is the opportunity to engage within the crowd, just as in a real crowd. So, quite frequently, strong advocates of a certain concept urge others to engage. 

Very often in early crowdfunding camps, art such as bands and films was the center of the campaign. However, this funding has now been given for all kinds of projects and a strong focus has been placed on innovation and new technologies. 

The potential of crowdfunding is highly useful for small and medium enterprises. It allows them to contact investors directly that may risk financing the new technology and inventions that are typically produced by SMEs. It enables them to contact and appeal directly. 

Why and how do governments help finance SMEs? 

The governments are frequently willing to contribute so as to prevent SMEs from raising funds for their profitable initiatives, to the decline of the investment prospects and, thus, to the lower level of domestic wealth. Furthermore, governments are committed to encouraging innovation, an area which is frequently excellent for SMEs, and they are committed to helping small and medium-sized enterprises develop since it promotes employment. 

There are a number of important ways that governments help: 

• Facilitation of subsidies. 

• For example, tax benefits can be provided for individuals prepared to accept the risk of investing in SMEs by providing tax discounts. 

• Advise – for instance there is a publicly supported organization in Scotland called the “Business Gateway,” which supports individuals who set up and operate a business, providing advice on getting funding. 

• Ensuring loans – a substantial part of a bank advanced loan is guaranteed by the government for a nominal charge, for example from the SME. Since this reduces the bank’s risk considerably, the bank may be more inclined to lend. The ‘Enterprise Finance Guarantee‘ plan is now known in the UK. 

• Capital investment provision – Many nations have government-backed corporations who are prepared to invest in SME stock. This is frequently done in conjunction with any equity investments received from another source by the organization. This is done by ‘Enterprise Capital Funds‘ in Great Britain while ‘Small Business Investment Company’ is available in the United States. 

One of the problems that you frequently encounter is to evaluate the performance of your team, and to decide whether your staff generate sufficient income. 

We asked the national statistics to see how much income per employee is created in the United Kingdom to aid you. You may determine the cost of employing extra people with these facts. 

Table of Contents 

What is “Revenue per Employee”? 

How much revenue does the average UK business generate per employee? 

What about my sector? 

How do you use this information? 

What is “Revenue per Employee”? 

 

Revenue per employee is a simple computed statistic by dividing annual revenues by current employee numbers – employers/managers are also used in the article. 

This is particularly relevant when comparing a firm with its competing competitors, since a company that wants to have the highest income per person is more productive. 

How much revenue does the average UK business generate per employee? 

UK companies earn an average revenue of £118 000 per employee. 

While this is an intriguing figure for economists and politicians who praise the productivity of the UK, it is not particularly beneficial for most companies in the UK. The £118,000 is for all UK businesses, from the manufacture of steel and energy to local bars and libraries and all in between. 

What about my sector? 

While this information begins to address the issue, it doesn’t necessarily enable an enterprise owner to decide whether to take on another employee or to compare his firm with rivals in his industry. 

We need delve more deeply into this topic and ask, in order to answer this question: how much is the income generated per employee in my industry, and how much might my firm make with another person to justify operating costs? Or, on the other hand, should the company search for operational efficiency before committing to another employee? 

We collected data for 25 industries across the gamut from restaurants, pubs and software developers to online retailers, in our entire study. We divided the data into micro-enterprises with less than 10 workers and small enterprises with between 10 and 50. 

How do you use this information? 

Here at CBM Accounting we realize that excellent data can help you make the correct decisions for your company and you may just roll the dice without any information. 

We work with our customers to guarantee that they can use current financial data on the cloud to provide the finest possible information on their business every day and wherever. 

If you took over employees for the first time recently, then congratulations are in order. It not only shows that your firm is healthy and expanding, and it also implies that you will be able to accelerate your growth rate since new employees have the capacity to make a big difference to the productivity and profitability of an enterprise in the next months and years. 

But enormous responsibility lies with all the great efforts. I hope you have now acquired to handle your wage responsibilities weekly or monthly (including the need for real-time reporting). However, a further significant payroll duty (and legally needed) comes up quickly; do you have your P60 on the due date for 31 May? 

Table of Contents 

What is P60? 

How essential are P60s? 

How can I build P60s? 

Expenditure and benefits 

We know how to pay 

What is P60? 

A P60 is an annual report provided to workers after each tax year, summarizing their taxable income for one year and providing a detailed description of any income tax, national insurance contributions, employee pension, and student loan repayments deducted through pay as you earn (PAYE). 

How essential are P60s? 

Everyone who still works for your firm at the conclusion of the tax year must receive a P60 by 31 May (workers who left your job before the end of the tax year must not be issued a P60 since they should have been awarded a P45 on their departure). 

It is vital to ensure that employees get (and retain) their P60, as it is necessary to show whether they have paid or paid the amount. In case, for example, an employee claims unpaid tax, applies for tax credits, or proves his or her income while applying for an individual loan, a mortgage or rental property, a P60 will be needed. 

How can I build P60s? 

You must also be able to produce the required P60s for your employed after the end of the tax year if you have a bookkeeper or small company accountant for managing your monthly or weekly payroll. 

You can probably add the functions needed to create P60s if you operate your payroll or accounting software in-house. For instance, Xero, KashFlow and FreeAgent may all produce P60 following the conclusion of the tax year. 

If not, copies of the P60 forms from the HMRC can be ordered. 

Expenditure and benefits 

OK, so you have P60 ducks in a row to guarantee that you make the deadline of 31 May. Another year’s time to forget yearly payroll commitments, right? 

Wrong. Remember that there is another annual payroll deadline just around the corner since you have to notify HMRC the yearly costs and benefits of your workers by 6 July and you have to pay all class 1A national insurance contributions payable on those perks by 22 July. 

We know how to pay 

Our team of SME accountants can administer the usual payroll process for small firms and prepare P45 forms for employees after the end of the tax year if they leave the company and create P60s for each employee. 

Contact CBM accounting immediately, or obtain an online fast offer for our services utilizing our immediate accountability quotation form to discuss your payroll requirements. 

The monitoring of company performance is essential for the improvement of your business operations, the identification of weaknesses of your business and the development of active objectives that can promote business growth. However, when looking at monitoring strategies, there are numerous alternatives, and this complete list will help you choose the perfect solution for your company. 

Table of Contents 

Live Monitoring and Testing 

Reviews 

Analytics Tools 

Meetings and Appraisals 

Market Research 

Live Monitoring and Testing 

Companies like Digivante are digital platforms that may assist you in evaluating your corporate performance via your choice of solutions. These are ideal for those wishing to underline the performance of their companies through their website and website conversions’ development and success in order to promote sales. They integrate a variety of performance monitoring approaches at digivante.com. These include testing problems before it is launched on the internet. The programme also allows performance and optimization tests to assist you detect the underperformance and live monitoring elements of your website, which may enable you to track your website’s daily performance and conversion coverage. 

Reviews 

One of the greatest ways to find out how your business performs is to acquire your consumers direct feedbacks. When you request reviews, your consumers will have an understanding of their first-hand website and business experience, which may enable them to identify their weakest components and aspects to alter. Not just that, it may enable you to enhance your business, as you know, by hearing directly from consumers about what they want to alter. You may receive more reviews by developing a review page on your website, offering feedback and requesting feedback in follow up emails from previous customers. 

Analytics Tools 

Digital software apps are analytical instruments that may assist you automate your business tracking. Analytics software generally focuses on a particular element of your organisation, such as cash flow tracking or finance, and may be used to gather information from multiple sources that can subsequently be utilised for your performance analysis. Many firms can also forecast your company’s success in the future. Analytics tools can also include such gadgets as tablets that typically include statistical functions which provide you with an overview of your enterprise’s performance. 

Meetings and Appraisals 

Annual effective meetings and evaluations will help you to keep track of employee performance in your overall strategy as they enable you to have face-to-face interaction with your employees that help you discuss any concerns and create goals. Quantitative analyses may also be used to measure the performance of your employees such as sales per employee and profit per employee. 

Market Research 

By comparing your sales to that of rivals you may monitor your performance, as that helps you to see your market position. Methods for this are market research that enables you to identify who your audience is targeting, how it is attractive to its target audience, as well as the sort of offerings it makes. You will thus be able to explore any possibilities, dangers and strengths that you have missed. 

We’ve covered a lot of ground in this blog on invoice financing, but it’s time to get back to the fundamentals – after all, more than 30% of qualified firms are still ignorant that it exists.

Invoice Finance, also known as Invoice Discounting or Debtor Finance, is a type of company financing in which cash is secured against the value of unpaid bills. In other words, it enables a company to quickly access all of the money locked up in its accounts receivable, rather than having to wait for 30, 60, or even 90 days for a client to pay the bills it has issued. 

There are several types of invoice financing, some of which entail a company handing over its whole invoicing process to a factoring company. However, this is not what CBM Accounting offers: with our Invoice Finance service, customers can choose to discount only some of the bills or even a lesser percentage of the invoices in order to have a portion of the monies advanced beforehand in those months when the firm has significant cash flow. It’s fine if the company doesn’t require all of the cash from discounting all bills. CBM Accounting: allows you to do this as long as the monthly minimum service charge is met. 

Table of Contents 

How it Works 

Benefits of Invoice Finance 

Who can use Invoice Finance? 

How it Works 

It’s easy to receive cash for your overdue invoices with CBM Accounting: once you’ve set up an account and your debtors have been approved (which may take as little as 48 hours), you can simply utilize our real-time software interface to collect cash for your outstanding invoices. You may generally obtain up to 80% (and occasionally even 90%) of the invoice amount upfront. When your client settles the invoice, you will receive the balance, minus our discount costs. 

Because invoices aren’t usually paid until 30, 60, or even 90 days after receipt, a business can raise significant amounts of money by issuing invoices and receiving 80 percent of the funds upfront rather than waiting. This can be used to fund growing operations, one-time large orders, working capital, investments, and much more. 

It’s crucial to note that Invoice Finance is not a loan facility; rather, it’s a service that allows a business owner to instantly access money from outstanding invoices. Unlike a loan, there are no repayments. It simply works by waiting for your consumer to pay their invoice 30, 60, or 90 days later, after which the money that was supplied to you ahead are “repaid” or offset. 

Benefits of Invoice Finance 

Invoice discounting is a simple, convenient, cost-effective, and safe way to acquire funds for your company. 

Within days, you may open an account with CBM Accounting: and get payment from invoices within 48 hours after approval. Any company that invoices other companies (rather than selling to consumers) is qualified. The amount of finance available to a firm is always suited to the size and cash flow demands of a business since it is based on the amount that is invoiced each day, week, or month. It is, nevertheless, worthwhile to browse around because invoice finance costs might vary significantly between suppliers. 

It’s also worth mentioning that with Invoice Finance, you only get the cash you need when you need it, and it’s all depending on the size of your receivables ledger. Compare this to the time-consuming process of obtaining a company loan, which, if approved, would bind you for a certain length of time with fixed interest and principal installments until the debt is entirely repaid. 

Another significant benefit of Invoice Finance over company loans that is frequently ignored is the lack of risk: with a loan, you are bound by a payback schedule, and missing one can result in major issues. If a CBM Accounting:-funded invoice is not paid by your debtor as a result of your debtor’s bankruptcy, TIM will reimburse you. will be covered by our CBM Accounting: Secure debt protection insurance product. 

Who can use Invoice Finance? 

As previously stated, invoice financing is available to any firm that sells a product or service to other companies on a payment-by-invoice basis (i.e., not selling to consumers). Indeed, it is considerably more common in certain nations than it is in Australia, simply because more businesses are aware of the benefits it provides. 

Whereas Invoice Finance in Australia accounts for around 3.9 percent of GDP, with around AU$7 billion lent at any given time, cash advanced to businesses in the UK accounted for about 19 percent of the total economy last year. At the end of 2018, invoice and asset finance totaled over AU$42 billion. 

Firms in nations such as the United Kingdom and the United States have found that once they taste Invoice Finance, they will utilize it since it is such a practical, efficient, and cost-effective way to support expanding businesses’ operations. More and more Australian businesses are becoming aware of this and contacting CBM Accounting. 

One of the considerations you must make when starting a new business or growing an existing one is whether or not to register for VAT. If your annual turnover exceeds £85,000, you have hit the VAT threshold and must register. If your annual revenue is less than that, you can choose whether or not to register. 

Once you’ve registered, you’ll need to charge the proper rate of VAT to your customers on your invoices, as well as file quarterly VAT reports and payments with HMRC. The situation becomes more complicated if you are not VAT registered or if you are working with a customer who is not VAT registered. 

In this post, we’ll go through how to charge and submit VAT in a variety of circumstances, as well as the procedures you’ll need to take to become VAT-registered. We also go through the fines HMRC may levy if you make a mistake during the procedure. We recommend seeking expert assistance if you are unsure how to proceed since certain parts of VAT might be complicated. 

Table of Contents 

Why should you register for VAT? 

How can I get my VAT number? 

Schemes for VAT 

VAT is levied. 

Having to pay VAT 

Penalties for mistakes in VAT registration and billing 

Support from CBM Accounting 

Why should you register for VAT? 

Is it worthwhile to register for VAT if you don’t have to? There are several advantages for a developing company. For starters, it offers your clients and suppliers the appearance that you are a larger, more established company, which might help you obtain contracts or negotiate better terms with suppliers. 

It also means that you may claim any VAT that providers charge you – and they will charge you whether or not you are registered. 

Consider the additional administration and accounting required to guarantee that VAT accounting is done completely and precisely, as well as the fact that you must make monthly payments to HMRC on schedule regardless of your cash flow situation. 

By registering for VAT, you are basically imposing a price increase on your clients. Despite the fact that businesses may recover the VAT, the psychological impact of the price increase could be detrimental to consumer relationships. 

How can I get my VAT number? 

You can apply for VAT registration on the HMRC website if you wish to do so. You’ll be given a VAT number to use on your invoices and HMRC reports. 

Your decision to register might be based on your previous or projected revenue. If you have achieved the £85,000 barrier, you must register within 30 days of doing so. 

If you believe that you will achieve the threshold during the following 12 months, you can register at any time before you reach the mark, but you must do so within 30 days of reaching the mark. 

Your Effective Date of Registration (EDR) will be determined by HMRC based on whether you apply for registration right before or after the deadline. 

It’s crucial to note that the £85,000 number must represent taxable turnover, which is defined as the provision of VAT-rated products or services. Any non-VAT-rated products or services must be excluded from the calculation. 

Schemes for VAT 

When you register for VAT, you can choose between three different schemes, each with its own set of reporting and payment requirements: 

• You submit your VAT returns and payments to HMRC four times a year under the yearly accounting plan. 

• The yearly accounting system allows you to: 

• Make VAT payments in advance to your VAT bill based on your most recent return (or an estimate if you’re new to VAT). 

• once a year, file a VAT return 

The difference between your sales invoices and purchase invoices is the amount of VAT you pay HMRC under the cash accounting scheme. Even if the bills have not been paid, you must submit these statistics to HMRC and pay any money owed to them. 

• With the cash accounting scheme you: 

• pay VAT on your sales when your customers pay you 

• reclaim VAT on your purchases when you have paid your supplier 

• The flat rate scheme is for businesses expected to reach a turnover of less than £150,000 in the next 12 months. The amount of VAT a business pays or claims back from HMRC is usually the difference between the VAT charged to your customers and the VAT you pay on your own purchases. 

• With the flat rate scheme: 

• you pay a fixed rate of VAT to HMRC 

• you keep the difference between what you charge your customers and pay to HMRC 

• you cannot reclaim the VAT on your purchases – except for certain capital assets over £2,000 

VAT is levied. 

If the goods or service is VAT rated, you must apply the appropriate rate of VAT on every invoice you submit once you’ve registered and received your VAT number. 

However, even if the goods or service is VAT-rated, you cannot charge VAT on your invoices until you register. If you do, HMRC will issue you a penalty fee. 

In the same way, if you are registered but do not charge VAT when it is due, you will be penalized. 

It doesn’t matter if your customer isn’t VAT registered when you send out invoices. VAT must still be collected and paid to HMRC. Your unregistered clients will be charged the full cost, including VAT, and will not be eligible for any discounts. 

When you make your quarterly report to HMRC, you record all the VAT you have charged as an output tax and pay the amount in full. 

Having to pay VAT 

When you acquire VAT-rated supplies from a VAT-registered business, you’ll get a VAT invoice containing the supplier’s VAT number and the amount of VAT included in the total invoice. You must pay the total amount due to the provider. 

If you are VAT registered, you can get a refund from HMRC for the VAT you paid. You seek a refund by recording this as input tax on your VAT return. 

However, if you buy supplies from a non-registered company, you should not receive a VAT invoice and you must not pay any VAT shown incorrectly on the invoice, even if the items are VAT-rated. If you do pay VAT in error, you will incur a penalty charge from HMRC. 

Penalties for mistakes in VAT registration and billing 

HMRC has a variety of registration and charging penalties. You must be informed of the important registration dates in order to comply with their criteria. Your Effective Date of Registration (EDR) is determined by whether you apply to register before or after crossing the threshold. If you do not apply on time, you may face fines for late registration. 

If you registered                                                                 Penalty rate 

Not more than 9 months late                                               5 percent 

More than 9 months but not more than 18 months late      10 percent 

More than 18 months late                                                   15 percent 

There is a minimum penalty of £50. 

VAT is also penalized if it is charged too early. You cannot legally charge VAT to clients unless you have registered for VAT. The penalty for charging VAT on an invoice without being registered is up to 100% of the VAT on the invoice. There’s also a ten percent penalty for charging VAT before the deadline. Even if you notify HMRC that you made a mistake, you will face this penalty. 

Support from CBM Accounting 

This is a quick rundown of the VAT registration and management rules. Our team of experienced tax accountants would be happy to assist you if you want expert guidance on any area of VAT or confirmation that you are complying with HMRC’s VAT laws. 

Please contact us at [email protected] or 020 3002 0436 for further information. You may also receive a free accounting estimate right now by clicking here.