• National Minimum Wage 2015

    The new rates for the National Minimum Wage (NMW) will come into force on 1 October 2015. Every employer must ensure that they are paying the NMW and later must be able to provide evidence if required that the NMW was paid. Depending on how a wage is calculated there are various rules to be considered. The applicable NMW rates are:

    £6.70 per hour for workers aged 21 and over - a rise of 20p

    £5.30 per hour for 18-20 year olds - a rise of 17p

    £3.87 per hour for workers above school leaving age but under 18 - a rise of 8p

    £3.30 per hour for apprentices - a rise of 57p

    Other Notes – These are for consideration only, please visit the NMW section of the Government website for full details (link at bottom of this section).

    Accommodation Offset – This increases from £5.08 to £5.35 per hour.

    NMW records to be maintained – A payslip which shows the hourly rate is insufficient evidence that the NMW has been paid. Employers should maintain records, in any form, that clearly show how wages are calculated including but not limited to the hours worked, overtime and shift where different rates are paid, workers date of birth etc. For NMW purposes these must be kept for over three years but there are some circumstances where they may be required for six years.

    Tips – It doesn’t matter how any tips are paid to an employee, in cash or included in the pay packet, any service charge or tips must be paid on top of the NMW.

    Piece rate workers and Homeworkers – The employer must calculate on average how many pieces can be completed on an hour and the rate paid must be at least 1.2 times the NMW.

    Unmeasured work – This occurs when an employee has a task to do, will get paid a certain sum and there is no complete term for completion. In this case the hourly rate can be calculated either by reaching a daily average agreement of hours to be worked or by recording every hour worked.

    More Details on the National Minimum Wage



  • How Bookkeeping can Pay for Itself

    Many business owners and managers will “do the books” in their own time and therefore they will say that it does not cost them anything, only their time. Unless the business owner can see cash savings from outsourcing then and rightly so in their mind there are no savings to be made.

    The fact is that a professional bookkeeping service will generally create or save enough cash for a business to pay for their service through improved cash flow and profitability. We are going to look at certain aspects of a business where these savings can occur. You will appreciate that each business type will create different opportunities at different times.

    Monthly Management Accounts

    Many business owners who “keep their own books” will often complete the aspects they require but fall short of creating a useful management report of the state of their business. We are all guilty of only part using systems to suit our needs and many small businesses will use a system to create Sales Invoices or manage stock movements etc.

    A professional bookkeeper will take this one step further and create a useful, bespoke set of management accounts each month. This will allow the business owner to take an over view of the progress of their business thus allowing them plan for future events. Knowing in advance how much VAT is due be paid is certainly important for most businesses.

    Sales Invoicing and Credit Control

    It goes without saying that efficient credit control will improve the cash flow of a business and effectively should be done during office hours. It can also improve profitability of a business with reduced bad debts and lower overdraft interest. The important functions of the credit control process are timely reminders, which can be issued outside of office hours and telephone calls which can only be made within office hours.

    VAT Compliance and Management

    As a business evolves it is important to ensure the correct Vat scheme is applied. Cash flow can be improved by only paying HMRC the Vat you have collected rather than what you hope to collect. Profitability and cash flow are improved by ensuring all Vat recoverable is actually reclaimed and only Vat recoverable is reclaimed.

    Purchase Invoice Processing

    Depending on which VAT scheme applies sometimes paying your suppliers a week or two earlier will result in you reclaiming the appropriate Vat three months earlier! There is an old saying that money follows money and where purchase invoice processing is concerned there was never a truer statement. Where a strong cash flow permits, it is important not to miss early settlement discounts or more importantly not to be penalised or have supply interrupted for late payment. As a business evolves it is important to ensure the correct Vat scheme is applied.

    Saving on Annual Statutory Accounts

    Having your books managed by a professional bookkeeper will mean your accounts can be presented to your accountant or auditor in the precise format they require thus reducing the fees they will charge for completion and taxation work.

    Software Licence Fees

    Utilising the cloud your bookkeeper can maintain your records while you can maintain access them. By your bookkeeper providing the software as a service you will not have to buy and maintain accounting software licences. The cost of the licence is one thing but the cost of managing the software on your system and maintaining full back-ups is an additional overhead that you can shed.

    Additional HMRC Requirements

    From April 2013 HMRC will require most employers to report PAYE information in real time “on or before” payment is made to employees. Where a business processes the payroll themselves this is an added overhead that has to be initially set-up and then managed to avoid future penalties.

    Now that you can see how an outsourced bookkeeping service can pay for itself, l guess your next question is what will you do with the additional free (pardon the pun) time you are going to have?



  • Choosing a bookkeeping or accounting service

    You are looking for a bookkeeping service, but may ask “What to look out for when choosing a bookkeeping or accounting service”. Bookkeepers are generally contracted to provide a full range of services but invariable they can be contracted to provide just one or two services, payroll or credit control, for example. They are usually engaged by small to medium sized businesses and business start-ups across all sectors, which opt to outsource their bookkeeping obligations in order to focus their time on other important aspects of the business.

    What role does the professional book keeper take? What to look for before choosing a bookkeeping service provider? Are they customer friendly?

    • Bookkeepers can be employed to undertake some or all of the accounting tasks of a business allowing the owner to focus on other aspects of the business. It is primarily a collation of information as opposed to an advisory service.

    • It should save you money instead of adding a book keeper to your staff.

    • It should save you time by removing the accounting tasks from the business owner.

    • Speed and accuracy is paramount in any business, it saves time and money. Your book keeper should be up to date with technology, to ensure they can deliver your bookkeeping on time with accuracy.

    • As service providers they directly represent their clients. They deal with each of their clients staff, their customers, suppliers and their tax officials. In order to be effective they must always be courteous, professional, efficient and committed to their clients business.

    • They must focus on what is best for the client. They may have to streamline the process and remove any over complications, but as service provider they must adapt to and exceed their clients needs.

    • They must recognise that the books are owned by the client therefore the books should be readily available for the client to review, even outside normal office hours. Knowing where the books are maintained whether locally or offshore must also be a consideration.

    • Good news is always welcomed by business owners as it reinforces that their business operations are going to plan and bringing positive results. However, it is the service providers responsibility to inform the client of any adverse findings to enable them to address and solve problems as they arise.

    • As facilitators they are part of the process, understanding and taking a keen interest in how each business works and what goals the owner has, are all important requirements to providing a successful service. However above all, B2B is about people dealing with people, therefore it is essential to develop a trusting relationship with key personnel.




iStock Image 04

Welcome to

The Business Owners


Web feed

You are viewing the text version of this site.

To view the full version please install the Adobe Flash Player and ensure your web browser has JavaScript enabled.

Need help? check the requirements page.

Get Flash Player