HMRC has recently announced it will be imposing fines of up to £3,000 on small businesses that fail to manage their books properly. This could be a crippling amount for small businesses and new start-ups so here, Derek Kelly, Managing Director of ClearSky Accounting, the business start up specialist, discusses how doing what you love, and letting the experts look after the things you hate can make all the difference to a successful business.
Do what you love, leave everything else to the specialists
Stick to the knitting - It’s a phrase you will read many times in hundreds of business management books the world over. Essentially the phrase means do what you do best and, when you are a start-up business, a micro-business, or a ‘one man band’ setting up on your own by selling your skills and expertise, it is a phrase that still holds plenty of sway.
Most successful small businesses are born from an entrepreneur willing to take a risk and pursuing what they love doing, in order to make a living. And most entrepreneurs do not want to be spending the time that could be spent growing their business on number crunching, invoicing, sorting out their tax affairs and all the other paperwork that comes with it.
So if words like tax, invoicing and paperwork make you glaze over, getting straight forward advice from an expert that understands the complexities and challenges you will face going into business on your own is vital. That’s where specialist accountancy services could really add value. We stick to the knitting as well and we love what we do – helping you get your business off the ground and flying. There are experienced accountants out there with a specialism in business start-ups, micro and small businesses, freelancers working through a limited company model and sole traders - and we will do what we do best to make sure you are free to concentrate on doing the same.
Business start-ups and those with an entrepreneurial spirit looking to get an enterprise up and running, form the bedrock of the UK economy and should be encouraged and supported as much as possible. This is particularly true in the current economic climate in which we are experiencing a fledgling recovery and the fact that the 4.8 million small businesses in the UK account for 60 per cent of private sector employment. Small businesses and new start-ups need all the support they can get, however, finding an accountant that understands their needs and has experience of this sector can be a challenge.
Also consider the cost of getting it wrong
It’s not just the fact that you hate doing the paperwork that should lead you to calling in the experts. As mentioned earlier, the cost of getting it wrong could cripple your business before you’ve even got going.
The Forum for Private Business has recently reported that small businesses could face HMRC fines of up to £3,000 for failing to keep their books up to date, a sizeable chunk of the average start-up budget and money that would definitely be better invested elsewhere. Also, if you get your tax wrong, HMRC can also charge interest on any outstanding amounts.
Despite the ongoing work of the Government’s Office for Tax Simplification, UK taxation remains a complicated minefield. So saving a small amount by doing your own accounting could realistically prove to be a false economy in the long run.
What to ask the experts
Small businesses and start-ups looking for accountancy and support services have a raft of options to choose from. These range from the traditional high street accountants to online packages that are largely ‘do it yourself.’ This means that it’s very much a buyers’ market with lots of service providers clamouring to work with you. With this in mind, there are a number of considerations to make before you sign up.
Are you getting value for money?
The fees for accountancy services can vary so a judgement should be made more on value then cost. What do you actually get in return for your accountancy fees? Are you happy to have an accountant that simply reacts to your queries or are you looking for a proactive service that has your business and its profitability front of mind and will be actively looking to give you best advice.
Do they offer peace of mind?
Does the level of service your accountant guarantees match your expectations? Can you be sure you’ll receive all the information you need, such as monthly management accounts, when you need it? Will your service provider make sure your company accounts are completed in good time avoiding you a few sleepless nights when the time comes to file your information with Companies House?
Entrepreneurs are no strangers to taking risks but this should not include your choice of accountant. Do your research, make comparisons and ask difficult questions. And always remember if you aren’t happy with the service you are receiving, you should be free to take your business elsewhere at any time you choose.
Today the Business Secretary Vince Cable responds to the consultation and announces several major policies:
Do what you love, leave everything else to the specialists
Stick to the knitting - It’s a phrase you will read many times in hundreds of business management books the world over. Essentially the phrase means do what you do best and, when you are a start-up business, a micro-business, or a ‘one man band’ setting up on your own by selling your skills and expertise, it is a phrase that still holds plenty of sway.
Most successful small businesses are born from an entrepreneur willing to take a risk and pursuing what they love doing, in order to make a living. And most entrepreneurs do not want to be spending the time that could be spent growing their business on number crunching, invoicing, sorting out their tax affairs and all the other paperwork that comes with it.
So if words like tax, invoicing and paperwork make you glaze over, getting straight forward advice from an expert that understands the complexities and challenges you will face going into business on your own is vital. That’s where specialist accountancy services could really add value. We stick to the knitting as well and we love what we do – helping you get your business off the ground and flying. There are experienced accountants out there with a specialism in business start-ups, micro and small businesses, freelancers working through a limited company model and sole traders - and we will do what we do best to make sure you are free to concentrate on doing the same.
Business start-ups and those with an entrepreneurial spirit looking to get an enterprise up and running, form the bedrock of the UK economy and should be encouraged and supported as much as possible. This is particularly true in the current economic climate in which we are experiencing a fledgling recovery and the fact that the 4.8 million small businesses in the UK account for 60 per cent of private sector employment. Small businesses and new start-ups need all the support they can get, however, finding an accountant that understands their needs and has experience of this sector can be a challenge.
Also consider the cost of getting it wrong
It’s not just the fact that you hate doing the paperwork that should lead you to calling in the experts. As mentioned earlier, the cost of getting it wrong could cripple your business before you’ve even got going.
The Forum for Private Business has recently reported that small businesses could face HMRC fines of up to £3,000 for failing to keep their books up to date, a sizeable chunk of the average start-up budget and money that would definitely be better invested elsewhere. Also, if you get your tax wrong, HMRC can also charge interest on any outstanding amounts.
Despite the ongoing work of the Government’s Office for Tax Simplification, UK taxation remains a complicated minefield. So saving a small amount by doing your own accounting could realistically prove to be a false economy in the long run.
What to ask the experts
Small businesses and start-ups looking for accountancy and support services have a raft of options to choose from. These range from the traditional high street accountants to online packages that are largely ‘do it yourself.’ This means that it’s very much a buyers’ market with lots of service providers clamouring to work with you. With this in mind, there are a number of considerations to make before you sign up.
Are you getting value for money?
The fees for accountancy services can vary so a judgement should be made more on value then cost. What do you actually get in return for your accountancy fees? Are you happy to have an accountant that simply reacts to your queries or are you looking for a proactive service that has your business and its profitability front of mind and will be actively looking to give you best advice.
Do they offer peace of mind?
Does the level of service your accountant guarantees match your expectations? Can you be sure you’ll receive all the information you need, such as monthly management accounts, when you need it? Will your service provider make sure your company accounts are completed in good time avoiding you a few sleepless nights when the time comes to file your information with Companies House?
Entrepreneurs are no strangers to taking risks but this should not include your choice of accountant. Do your research, make comparisons and ask difficult questions. And always remember if you aren’t happy with the service you are receiving, you should be free to take your business elsewhere at any time you choose.
Improving access to finance
For businesses to grow they need access to reliable sources of finance beyond just looking to their bank for a loan. In July the green paper, Financing a Private Sector Recovery, was launched and received over 180 submissions.Today the Business Secretary Vince Cable responds to the consultation and announces several major policies:
- The successful Enterprise Finance Guarantee (EFG) will continue for the next four years, making around £2 billion available to viable small companies without a credit history or collateral.
- The government will commit a further £200m to Enterprise Capital Funds, supporting equity investments in the highest growth potential businesses over four years.
- The government welcomes the joint bid of business angels and the Government’s SME investment arm, Capital for Enterprise, for a co-investment fund as part of the Regional Growth Fund to support angel investments into high growth potential early stage SMEs, particularly in areas worst affected by public spending cuts.
- The government will also work with banks on several areas launched in their response to the green paper, the Business Finance Taskforce. This includes the £1.5 billion Business Growth Fund, mentoring and a new lending code.
Making it easier to do business with the public sector
The Government has a strong role to play in boosting enterprise and helping businesses. Critical to that is giving them access to Government contracts, instead of leaving that as the preserve of big business. To ensure this happens:- A goal has been set to have a quarter of Government procurement directed to SMEs.
- Government agencies will aim to remove qualifying barriers that prevent small businesses accessing Government contracts.
- Government also reaffirms the commitment that 80% of prime contractors are paid within 5 working days. All Government contractors will be required to pay their suppliers within 30 days if they wish to benefit from departments’ procurement.
Allowing social tenants to start up their own business from home
The Government believes that enterprise is for everyone, including people from disadvantaged backgrounds. All members of society are free to start their own business. So Government will:- Work with social landlords to tackle the misconception that social tenants cannot start up a business, and encourage tenants to pursue their enterprising ideas.
- The Enterprise Finance Guarantee will be made more accessible to small community finance institutions, to benefit businesses starting up in disadvantaged communities.
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