Author: Megan Davies

Three reasons entrepreneurs need legal help!

In business, mistakes can be expensive and as an entrepreneur, although you’ll know many of the regulations that apply to your business, there are so many you can’t possibly remember all of them. Depending on the type of business you run, you could face laws regarding taxation, employment, product liability, premises liability, discrimination, health and safety and a variety of other regulations.

Keeping on top of all the laws that affect you and the changes to those laws, while still being mindful of all the other aspects involved in running a business, is almost impossible.

That’s why you need legal help. A legal professional can identify the various rules and regulations that apply to your business and advise you on how to operate within those laws. They can also help you draw up important contracts that could prevent legal action in the future and they can prepare a case in the unfortunate event that you wind up facing or filing a lawsuit.

Here are three reasons you need a professional to help.

They help set up your business

In the early stages of your business, they can help you make vital decisions and understand the consequences of those decisions. Is your business going to incorporate? Do you know what that means from a legal standpoint compared with the other business entities? Do you understand the difference between hiring employees or working with contractors? If you hire employees, do you understand the employment laws surrounding hiring and firing?

Law experts understand each of those and can explain how they affect your business. They can help you make an informed decision that is in the best interests of your organization and protects you in the future.

They help with contracts

At some point, your business will enter into contracts. Whether those are employment contracts with employees, service contracts with clients, or business agreements with other partners, you will need legally-binding documents to protect yourself.

Not all contracts are easy to read or understand, and some may have clauses that are downright confusing. They will help determine if the contract is in your best interest and if there are inclusions that you need to know about—such as whether parts of the contract can be assigned to third parties or how you can terminate the agreement. They can also revise the contract or make changes to anything you deem problematic.

If you’re the one drawing up the contract, getting a qualified legal opinion can ensure the contract represents your needs and goals.

They help prevent lawsuits

When you own a small business, there’s always a chance you’ll wind up in litigation. You could have a dissatisfied customer or angry former employee. Maybe you need to file a lawsuit because someone else is infringing on your trademark or copyright.

Usually there are steps you can take in those situations before filing or facing an expensive lawsuit, and a lawyer can help you navigate those steps, possibly avoiding the cost of going to court. If you do wind up in court and you already have legal representation, that person will be familiar with your business, which makes representing you that much easier.

Many small business owners and entrepreneurs wait until it’s too late before they look for help. They wait until a lawsuit has been filed, or they need to file a lawsuit. A lawyer can advise you of ways to avoid those situations in the first place, saving you unnecessary legal expenses in the long run.

Final thoughts

Yes, attorneys cost money. The benefits of having one, however, far outweighs the expenses. They will not only advise you on business decisions and contracts that protect your business in the future, they will help defend your company, product, or yourself in the case a lawsuit arises, either with you as the plaintiff or as the defendant.

If you are looking for Fulham accountants or a tax advisor in London, get in touch!

e: office@londonaccountants.co   t: 0203 137 9791

Kind Regards,
The Team at London Accountants

Great reasons to shorten your workweek!

Okay, there probably aren’t a lot of people who need to be convinced that a shorter workweek is a great idea. Small business owners, however, might be on the list of people who need a little encouraging. After all, every day they take off could mean a longer day to make up for the missed hours.

There are some very real benefits to working a shorter week and those benefits aren’t just about the long weekends—though who would complain about those?

Here are some great reasons to consider shortening your workweek.

It attracts talent

If you’re looking to hire only the best employees—and who isn’t—what could be more attractive than earning a decent wage while working fewer hours? Offering an extra day off a week is sure to attract the attention of highly skilled workers without breaking your bank.

It can save you money

If you’re not already offering a shorter week, consider it in place of a raise for employees. It saves you money, makes workers feel valued, and will improve employee morale and satisfaction. Some may even prefer it to a raise.

In an ideal world, you could pay your employees the same while giving them a shorter workweek. Your company may not be able to afford that, but some employees might gladly take a pay cut to have an extra day off a week.

If you want to offer a shorter workweek but can’t afford to keep the pay the same, give your employees a choice.

Final thoughts

If moving to a shorter workweek permanently isn’t practical for you, there are still ways to give employees extra time off. You could run summer hours, where every Friday in the summer people leave early, or every weekend people take a Friday or Monday off. Or you could give employees the option of choosing what day to leave early. You could consider having every second week throughout the year be a flex week.

If you really can’t give up the hours, offer your employees a compressed workweek or see if your business is set up to allow working from home one day a week. Cutting out that commute saves them time.

Or you could be like some companies—including Netflix and Groupon—and offer unlimited vacation days.

Study after study has found numerous benefits to shorter workweeks, with none of the drawbacks that business owners often fear.

Offering a shorter workweek won’t prevent staff from doing their work, it’ll encourage them to do the same work in less time—provided, of course, each person isn’t already doing the work of two people.

If you are looking for Fulham accountants, a personal tax accountant or a tax advisor in London, get in touch!

e: office@londonaccountants.co   t: 0203 137 9791

Sources

https://www.fastcompany.com/90205776/the-four-day-work-week-works

https://www.inc.com/marla-tabaka/summer-hours-are-good-for-business-yes-you-can-afford-to-offer-this-perk.html

Kind Regards,
The Team at London Accountants

Is your business eligible for R&D Tax Credits?

There has been quite a lot of talk recently about R&D Tax Credits and it can be quite an overwhelming and complicated topic to do your own research on.

Let us explain…

Basically, if you can show HMRC that your business has spent money on qualifying R&D (research and development) costs, you can receive tax credits from them. This means you can get a reduction on the Corporation tax your business owes (if you are profitable), or they can pay you a cash tax credit (if you are a loss making company) and are not eligible to pay tax yet.

The idea behind this is to reward companies that are bringing new products & services to the market. And during the process of doing so, have taken some risks along the way.

You could qualify if you are:
– Advancing an existing system or product
– Able to show that you’re overcoming technical uncertainties
– Developing new products or systems
– Employing software developers, technical staff or scientific staff

So…how much can I get?

– For SME businesses that are profit-making, you receive up to 25% rate of relief. If you are loss-making, you can get up to 33% back in cash as a tax credit.

How do I move forward?

– Firstly, you will need to work with someone who is fully qualified to submit an R&D claim.
– You will then need to identify your qualifying R&D spend and prepare your narrative for HMRC. This is a document you will write that explains how you have satisfied the list of standard questions provided by HMRC.
– This is then submitted as part of your annual Corporation tax return.

Tips for improving your credit score!

At some point in the life of your business, you’ll likely need to borrow capital.

That’s why it’s important to build and maintain a solid credit score now – so when the time comes to apply for financing you’ll be able to prove to a lender you’re a good risk.

Here’s some simple steps you can take today to raise your credit score.

Know your numbers:

A quick online search can help you find out where you stand with your creditors. Simply contact a credit reporting agency (e.g. Equifax, TransUnion, or Experian) to request your free credit report.

Your credit rating will appear as a number scored between 300 and 900; the higher the number, the better your rating.

The calculation is based on a number of factors, but the one that carries the most weight is your payment history.

When calculating your rating the credit agencies take into account whether you:
– pay your bills on time
– make at least the minimum monthly payment on your credit card balances
– have defaulted on any loans, or
– have accounts in collections.

It’s recommended that you review your credit report twice a year to ensure there are no errors or omissions that may negatively impact your score.

Use credit with care:

Although it can be difficult for a small business to qualify for a business loan or line of credit – especially if you’ve yet to prove your company’s profitability – you may still be able to qualify for a company credit card.

A business credit card offers you an opportunity to build good credit at a low risk. Most likely you’ll be offered a card with a small spending limit at first. Use it wisely, and commit to paying off your balance in full each month.

As you know – based on how your credit rating is calculated – there’s no better way to establish good credit than to pay your bills in full and on time.

Smart credit score strategies:

– Use this free debt repayment calculator and make a plan for paying off your debts as quickly as possible.
– When it comes to revolving credit, use no more than 30 percent of your available credit. The lower the percentage, the better for your credit file.
– Talk to a lender about consolidating multiple credit card balances with a personal loan, mortgage line of credit, or balance transfer credit card.
– Make multiple credit card payments throughout the month to avoid late payments, pay down your debt faster, and lower your interest fees; this is a great way to increase your credit score by improving your credit utilization ratio.
– Keep old, unused creditor accounts open, as a good long-term history with a creditor is to your advantage.
– Try to negotiate with your credit card company. You might be surprised by their willingness to reduce your interest rate, lower your monthly minimum payment, or waive late fees.

Final thoughts

When it comes to improving your credit score, slow and steady wins the race.

To help you stay motivated, keep your long-term goals in mind. This will help you make the effort needed to save money, keep to a consistent payment schedule, and use your credit wisely.

And when it’s time to invest in scaling your business, opening another retail location, or purchasing new equipment, you’l be set to apply for financing with confidence.

Got a question about your business? If you are looking for Fulham accountants or a tax advisor in London, get in touch!

e: office@londonaccountants.co   t: 0203 137 9791

Kind Regards,
The Team at London Accountants

What to do when a business partnership breaks up.

The start of a business partnership is an amazing time. Generally speaking, both people are invested financially, emotionally and professionally in the business. It may be stressful to start a business but doing so with a partner gives you someone to share the responsibility and workload with. When you and your partner collaborate and work well together, a partnership can be incredibly fulfilling.

When a partnership doesn’t work or when it stops working, the dream can easily turn into a nightmare.

Here are some tips for managing the situation in case your business partnership goes sour.

1. Identify the signs

It’s important to acknowledge when things aren’t working the way they used to. There could be a variety of reasons your partnership no longer works: the business isn’ doing as well as you expected, someone’s personal situation or goals have changed, or you disagree on how to run the business.

Some conflict in a partnership is okay and can even be healthy. It’s when the relationship breaks down that you may not be able to repair things. Are you and your business partner unable to communicate? Are you unable to reconcile your differences? Does one or both of you mistrust the other? Is your staff affected by your issues?

If you’ve answered yes to the above questions, it’s time to explore why your partnership isn’t working and determine a plan for moving forward. Unfortunately, in these cases simply taking a break from the other person won’t fix issues. You either need to find a way to work through the problems or consider ending the partnership.

2. Consider your options

Unfortunately, all options for ending your partnership will take time and involve complicated legal matters.

You could decide that one of you will buy out the other. This typically happens if the business is doing well and the only reason to dissolve the partnership is because the two people in it can’t work together. This means sorting out complex issues such as how much your business is worth, refinancing any bank loans and splitting collateral.

You could also decide to sell the business. Typically, owners do this if the business is underperforming but stands a chance of doing well under someone else. This also takes time because the business must be valued, you may have to end rental agreements and both partners have to determine what they are owed from the sale.

3. Think ahead

The best thing you can do to prevent unnecessary nastiness or animosity during the breakup of a business partnership is plan ahead for it. A document called a Partnership Agreement ensures the decision making is done before emotions are involved, while cooler heads prevail.

Your Partnership Agreement sets out the terms of the partnership such as how profits are shared, how loans are paid, what happens if one partner wants to leave the business, what each partner’s responsibilities are and how losses are divided. This not only helps keep relationships smooth during the partnership, it provides guidelines for how to dissolve the partnership if things don’t work out.

Final thoughts

If you currently have a solid partnership but don’t have a Partnership Agreement, now is a great time to sit down with your partner and consider drawing one up. Even if things are great at the moment, it’s important to be prepared for the future.

In the best circumstances, you’ll never have to rely on any plans you’ve made for breaking up your partnership. But they’re there for you just in case you need them.

Got a question about your business? If you are looking for Fulham accountants or a tax advisor in London, get in touch!

e: office@londonaccountants.co   t: 0203 137 9791

Kind Regards,
The Team at London Accountants

 

Using Smart Goals to Achieve More!

As a small business owner, you’re likely always looking for ways to achieve more. Maybe you made a New Year’s resolution about it. You might have resolved to make more money, find more clients, or grow your business. It’s fantastic to have an idea of what you want to do, but how will you know whether or not you’re successful?

That’s where SMART goals come in…!

SMART goals help you identify what you want to do, when you want to do it by, and how you’ll get it done. They give you a systematic way of deciding what goals are important—and realistic—and evaluating whether or not you’ve attained them.

SMART goals help you plan for success. They turn your resolution into action.

What are SMART goals?

SMART goals stand for goals that are Specific, Measurable, Achievable, Realistic, and Timely.

Here’s an example of a goal that is not SMART: “I want to grow my business.”

Why isn’t it SMART? It says nothing about how the business will grow, how long growth will take, how it will be attained, or how success will be measured. It’s vague, so you have no idea if you’ve been successful.

Growing your business is a great starting point for a SMART goal because you know there is something you want to achieve.

Now you need to use SMART goal setting to lay out your plan.

How to use SMART goals:

To use SMART goal setting you need to ask yourself important questions. Let’s take the above example of growing a business.

Specific: Ask yourself how you want your business to grow. Do you want more clients? More revenue? More employees? What does “growth” mean?

Measurable: How many more clients do you want? How much more money do you want to earn? How many more employees do you want? Numbers work best here.

Achievable: How do you plan to reach your goal? Do you have the resources to make it happen?

Realistic: Do you currently have one client but want 100 within a week? It’s great to have goals that challenge you but asking yourself to do the impossible sets you up for failure.

Timely: How long will you give yourself to find new clients or employees? Be specific with deadlines. Don’t just say you want something done ASAP or within the year. Set a reasonable, firm deadline that gives you a chance to review your goals and determine how successful you’ve been.

Here’s the same thought above, but written from a SMART perspective:

By March 31, I will have signed three new clients for my services by purchasing advertising in the local newspaper, attending networking events, and posting on my blog once a week.

As your deadline approaches, you’ll know to review your client list and see if you’ve signed three new clients. If you have, great! If not, review your action plan and see where changes could be made.

Final thoughts

It’s great to have an idea of what you want to do, but without SMART goals all you have is an idea.

The great thing about SMART goals is you’re not limited to one goal at a time. Let’s say you want to grow your business both in terms of clients and employee size. You can set SMART goals for both those areas and work toward both at the same time.

Once you’ve achieved your goals, you can look forward to setting additional successful goals for yourself in the future.

Got a question about your business? If you are looking for Fulham accountants or a tax advisor in London, get in touch!

e: office@londonaccountants.co   t: 0203 137 9791

Kind Regards,
The Team at London Accountants

4 Reasons to Switch to Cloud-based Accounting!

If you’ve been considering making the move to a cloud-based accounting system, you’re not alone. Cloud technology has impacted many business functions, including making managing financial aspects of your business easier and more efficient.

Cloud-based accounting moves your accounting from being hosted on your computer’s hard drive to an online platform. Cloud-based platforms like QuickBooks and Xero offer important features that save you time and money, freeing you up to focus on other important business activities.

Here are 4 reasons to switch to a cloud-based accounting system.

1. Efficient invoicing

If your business relies heavily on invoicing, an online accounting system like QuickBooks or Xero makes invoicing incredibly efficient. You can email invoices to clients directly through your software and track how long it’s been since the invoice went out.

Clients pay you through a link attached to the invoice, making the payment process easier for them, which increases the likelihood they’ll pay you sooner. If they pay through the system, your platform will mark the invoice as paid automatically. If their payment is late, the system alerts you.

Further, you can set up your software to send automatic reminders about late payments. Taxes are automatically calculated for you and you can set up recurring invoices and retainers to further automate your invoicing.

2. Paperless accounting

Managing your accounting through a cloud-based system enables you to move away from paper accounting. You don’t have to worry about where or how to store years of paperwork and files because everything is securely stored in the cloud. Likewise, you don’t have to go through boxes of files to find a receipt from two years ago, you can simply access the information through your computer.

It’s easy for you to share your records with your accountant, bookkeeper or anyone else who may need to collaborate on your finances. You don’t have to mail them physical copies of your financial transactions and statements, you can email them the information or give them access to your software.

3. Accessibility

With a cloud-based accounting system like QuickBooks or Xero, you don’t have to be in the office in front of your computer to access your financial information. You can see your ledgers and reports from anywhere, on any device. If you want to work from home one day, you can log in to your software from your smartphone if you want, to send invoices, check your reports, or manage expenses.

4. Accurate reporting

An important component of running your own business is reporting. Accurate reporting enables you to better manage your finances and understand your profitability. It’s vital for making informed decisions about your business.

Cloud accounting provides you with accurate reporting at the click of a button. Using systems like QuickBooks or Xero you can easily access profitability reports, income and expense reports and year-end reports.

The information is available to you automatically – you don’t have to spend hours in front of a calculator going through every invoice to see your numbers. Simply by keeping your records in a cloud-based system, you can easily generate accurate reports.

Final thoughts

If you’re hosting your accounting information on your computer hard drive, it’s worth looking into cloud-based accounting to see if you can benefit from the switch. 

Given the ease of invoicing and accurate record keeping, combined with the accessibility of a paperless system, you may find cloud-based accounting software is the right system for you.

Get in touch if you would like advice regarding cloud-based accounting!

Got a question about your business? If you are looking for Fulham accountants or a tax advisor in London, contact us below:

e: office@londonaccountants.co   t: 0203 137 9791

Kind Regards,
The Team at London Accountants