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Author: Megan Davies

Differences Between an Accountant and a Financial Planner!

Posted on by Megan Davies

Differences Between an Accountant and a Financial Planner!

When it comes to managing your finances, there are two professions that can help you understand your numbers, and ensure you have a plan to get to where you want to be. 

Accountants and financial planners can both play an important role in your financial success, but there are some important differences between the two.

For any successful business, it’s advisable to have both an accountant and a financial planner because their skills are so complementary and they can work together to help you better meet your financial goals.

There are areas where they are similar, of course. Both can help determine if your financial plans are feasible and can provide you with important strategies for managing your money. And while they can both advise you, neither can make decisions for you.

Here are the main differences between accountants and financial planners.

Accountants:

Your accountant is responsible for keeping accurate financial records, making summaries and undertaking analyses of your financial transactions. Depending on their role or speciality, they may also undertake auditing, inventory accounting and financial forecasting.

They’ll also help ensure your business is compliant with tax regulations and may advise you on important financial issues related to your business, such as decreasing costs, setting prices or wages, managing expenses and budgeting. Additionally, they can help you determine the best way to set up your business, how to increase your returns after tax, and how to grow your business.

Further areas accountants can help you include:
– Payroll
– Lowering your tax burden
– Preparing business plans
– Forensic accounting
– Selling, buying or merging a business.

Financial planners:

As your business continues to grow, another challenge is how to best manage your money to help financially secure you both now and for your life beyond the business.

A good financial planner will take time to understand what’s important to you and what you want for your future. They then put together a game plan to ensure that you have the right money, in the right places, at the right times for all stages of your life (ensuring you outlive your money, and not the other way around).

As part of this plan, your financial planner will typically advise you on:
– Pensions and Retirement planning
– Tax-efficient investing and portfolio management
– Estate and Inheritance tax planning
– Mortgages
– Financial forecasting

Who to hire and when:

If you run a business, it’s a good idea to have both an accountant and a financial planner on your team. Both will help set you up for success, lessen your risks and develop strategies to enable you to thrive financially. 

Often, accountants will know of good financial planners to bring onto your team, and vice versa.

If you feel you can only hire one, that one will be based on your specific needs. If you’re working towards long-term wealth or other financial goals, considering investing, or concerned about setting up your estate, talk to a financial planner. If your needs have more to do with running a business, daily transactional financial activities, or dealing with your taxes, an accountant will help you.

Develop relationships with both!

In an ideal situation, you’d have both an accountant and a financial planner on your team. Keep in mind that for them to help you to their best abilities, they need to get to know you, your plans and your challenges. 

By developing a solid relationship with both and being open and transparent about your financial situation and any issues you face you can better enable both to help guide you toward success.

Final thoughts

Whether you’re planning for your business or for your personal finances, it’s a good idea to have someone around who can give you expert advice and advise you on the best financial path forward.

Co-written by

Jez Bhatti, London Accountants & Simon Ben-Nathan, Arkenstone Wealth

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Automating These Business Activities – Are You Falling Behind?

Posted on by Megan Davies

Automating These Business Activities – Are You Falling Behind?

The daily processes and transactions involved in operating a business can mean long hours of repetitive tasks and occasional oversights due to human nature. Automating these tasks can result in significant savings in resources and eliminate mistakes caused by human error. The key, however, is to know which tasks should be automated and which ones warrant staff intervention and guidance. Let’s take a look at some of them.

Here are six activities that you should definitely be automating for your business.

1. Abandoned Online Carts

Not following up with visitors who’ve abandoned shopping carts on your site is just leaving money lying on the table. They’ve already expressed interest in your products. Automated engagement touch-points can create the perfect follow up to prompt them to finish their purchase. Exit pop-ups and follow-up emails are great devices to use when reaching out to visitors who’ve abandoned carts on your site.

2. Lead Capturing, Nurturing, and Scoring

Automating your lead development process can do wonders for your company’s conversion rates. Both hot and cold leads require attention and targeted engagement in order to convert into paying customers. Using automation software can help sales reps to strategically guide prospects to end of the sales cycle, and it can also direct you towards the leads that will convert the fastest.

3. Engaging New Contacts

Entrepreneurs meet new contacts all the time. Whether it’s a potential business partner or prospective customer, automating your engagement with them can help you forge a solid rapport after your initial contact. There are several CRM options that’ll allow you to group contacts by event, type, company, and location, amongst other settings to ensure that your business card collections don’t go to waste.

4. Personal Direct Mail

Outreach efforts with a personal touch tend to garner higher engagement rates, which explains why businesses send out birthday cards, calendars, seasonal greetings, and other materials to customers. With the right software, you can set up automated, sequenced events to gather customer personal data and incorporate it into specific marketing activities.

5. Hiring Processes

Automating your hiring process is one of the best things that you can do for your business. Everything from receiving applications and interviewing to setting up drug tests and completing new-hire paperwork can easily be done with automation. First, outline what your hiring process looks like. Next, determine staff member roles and duties within your process. And lastly, establish time frames that each activity should fall within. There are tons of HR software programs that can make automating your hiring process a breeze.

6. Word-of-mouth marketing

Numerous marketing studies show that consumers are more likely to buy from companies if they’ve been referred by a friend. Encourage customers to give referrals about your products by simply asking for them.  There are several ways to automate this, including adding referral mentions to order confirmations, discount offerings, and email outreach campaigns.

Set aside a week or two to take a look at any processes that can be automated within your business. Automating repetitive and tedious tasks can aid you in uncovering hidden cost-savers and potential sales opportunities for your business.

Kind Regards,
The Team at London Accountants

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Get paid first – why your salary should be your business’s first monthly expense

Posted on by Megan Davies

Get paid first – why your salary should be your business’s first monthly expense!

It’s the line item most often left out of a small company’s budget: the business owner’s salary.

Let’s face it: you can always spend cash on your business. From office expenses to employee salaries to rent, every month a portion of your revenue is accounted for.

But paying yourself first is a must. You need to earn a living – and paying yourself can actually help your business succeed.

Here’s why you should make your salary a top priority, starting now.

It’s the first rule of wealth building

A business exists to make money, but business owners thrive when they continuously save and invest profits. If you aren’t paying yourself before your vendors, suppliers, and employees, you’re probably not setting aside funds to re-invest in your business to help grow more profits – or investing in a wealth building portfolio.

Pay yourself what you can afford monthly or biweekly and earmark a portion to invest in savings. Making consistent financial contributions throughout the year will help you build a healthy nest egg – and the sooner you start the more you’ll benefit from compound interest.

Setting up automated fund transfers from your business to an investment savings account will make paying yourself easy. After a month or two, you won’t even notice a difference in your cash flow – but odds are you will be motivated by your growing balance.

Avoid a cash flow crunch

There will be times where you’ll need additional funds available for your business – and borrowing from a lender may not be an option. Unfortunately if you’ve only been in business for a short time, it can be difficult to qualify for a business loan or line of credit.

When you make it a habit to pay yourself first you’ll be able to build up funds. When you need to make a large purchase, an unexpected expense comes up, or you’re ready to invest in profit-generating growth strategies, you’ll be prepared – and can avoid the risk of debt.

Pay yourself – even when you think you shouldn’t

Sometimes it may feel like you need to compromise between two priorities: paying yourself and paying all your bills in full.

Continue to pay yourself a minimal salary every month, even when money is tight. Then pay the rest of your bills, putting down as much as you can above the minimal required payment. This strategy will help you build a solid credit rating – so when you apply for a business loan a lender will consider you a good risk.

It’s worth noting that banks, finance companies, and investors regard business owners who pay themselves in a positive light – and are much more likely to want to deal with them.

Financial reward can be a powerful incentive

Many businesses generate revenue, but it typically takes time to see healthy profits – another reason it can be difficult to pay yourself first.

Nonetheless, rewarding yourself for your hard work will motivate you to keep working, even if you aren’t able to pay yourself a large salary right away.

Talk to your accountant for a guideline on how much to pay yourself – and always treat yourself as generously as you would your employees.

Reward financial milestones met and projections exceeded with a bonus. Raise your salary when your profit shows continuous growth. If giving yourself a raise creates some anxiety, do it in confidence knowing you can always make adjustments as needed.

Kind Regards,
The Team at London Accountants

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Setting and Achieving Financial Goals

Posted on by Megan Davies

Setting and Achieving Financial Goals!

Financial security, whether that’s for a business or an individual, requires planning. You need to know where you want to be, where you are now, and how to cross the gap between the two places. Having goals and a plan makes it more likely that you’ll achieve financial security; whatever that means to you.

Here are some steps to setting your financial goals.

1. Be specific with what you want

It’s easy to say you want “financial security” but what does that mean to you? After all, financial security can mean different things to different people. Do you want money to cover your retirement? Do you want enough cash that you can handle emergencies? Do you want to live a lavish lifestyle or are you planning on downsizing?

Once you know your big goal, write out what that actually looks like to you. How much money do you feel you’ll need in retirement to cover your lifestyle? How much would make you comfortable? If you’re not sure what you’d need, talk to your financial advisor, who can ask you the questions and provide you with the guidance you need to determine how much money you should be planning for.

Remember that the most actionable goals are SMART (specific, measurable, attainable, realistic and timely). Know when you want to retire, for example, how much money you’ll need and how much you can realistically save by that time.

2. Write your list of goals and put each in a category

Some goals are short-term, some are medium-term and some are long-term. Planning for a holiday this year is a short-term goal, while retirement planning is long-term. Once you know what your goals are, put them in a category based on whether they are short-, medium-, or long-term goals. This will help you plan how much you need to set aside to achieve each, and what sort of timeline you’re looking at.

3. Determine your assets and debts

If you’re like most people, you likely have both assets and debts. Achieving your financial goals won’t be as simple as saving money. You’ll have debts you need to pay off. In the past, people often focused on paying off their debts, but that meant there wasn’t as much money set aside for the future.

Before you can map out a plan to achieve your goals, you need to know where you are currently. How much money do you have available to you? How much are you bringing in monthly? What are your expenses? What debts do you have and what are the interest rates?

Take stock of money flowing into and out of your accounts over a few months. Where do you spend the most money? Are there places you could cut back?

4. Build a plan to help you reach your financial goals

This can be a difficult step to take on your own because your own patterns and habits might influence how you plan. It’s worthwhile to talk with a financial advisor, who can review your information and help you set up a path forward. They can also keep you accountable for achieving your financial goals, and assist you in addressing any emergencies that may arise. They will also identify areas where you could cut back and how to make your money go further for you.

Final thoughts

By knowing what your goals are and having a plan to achieve them, you’re more likely to achieve financial security. Talking with an advisor can help you get your finances on track.

Kind Regards,
The Team at London Accountants

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5 Steps to Setting Up Your Business Processes for Success

Posted on by Megan Davies

5 Steps to Setting Up Your Business Processes for Success!

When a business first starts out, it’s natural for the owner to be a jack-of-all-trades. You may not have the capital to hire specialists or access to the technology that can help you. As your business grows (or as you look to take a smaller role in your company) you may find the business has become over-reliant on you, which makes it difficult for you to take a step back.

Here are some steps you can take to enable your business to thrive, even if you can’t be there all the time.

1. Review workflows

Have someone interview everyone in the company to find out what their job is and how they fulfill their tasks. Look at their processes to see if there are ways to make their tasks more efficient and seamless–you could even look at best practices in other companies to see how they manage their tasks.

The goal here is to make processes as simple and efficient as possible. Take out any unnecessary steps and ensure each process only involves tasks that are vital to successful completion.

2. Automate what you can

Often in business, people continue doing a task inefficiently simply because they got used to doing it that way. That can lead to hours being spent in activities that could be automated. Look at activities that are carried out regularly and investigate whether software exists to make that process easier for you.

For example, if your staff spends hours each day updating your customer database, it’s worth looking into customer relationship management (CRM) software, which automatically takes care of that for you, saving you time and reducing the risk of errors. Likewise, if your team spends time following up on unpaid invoices, consider an online invoicing system that automatically sends out overdue notices.

3. Document the processes

Once you have an idea of how people carry out their responsibilities and have identified ways to improve or automate them, write the processes out. If possible, keep the documents digital, so they can be updated as your business evolves and so everyone can easily find them. If you’ve purchased software to automate processes, make sure everyone who would use the software knows how to access it and can do so easily.

Finally, ensure the documents are stored somewhere safe and accessible for your staff. You could use Google Docs or software designed to help with business process management.

4. Train your staff

Now is the time to train your team in your optimal workflows. Make sure everyone has read and understood the documented processes and knows how to access and use any software or technology you’ve purchased. Ideally, you’ll have a couple of people trained to cover each area of your business, so if one is ill or unable to work for a while, someone else can easily step in to carry out those responsibilities.

5. Make your business self-reliant

You want your business to function without you so it still thrives if you become ill, need a vacation or otherwise can’t work for a while. Examine your processes for areas where the company is still overly reliant on you and look for ways to foster self-reliance. This may mean identifying gaps in your employees’ expertise and hiring people with complementary skills, finding new ways to automate workflows, working with consultants and outside service providers to fill in gaps, or creating an FAQ document where questions you’re commonly asked are answered.

Final Thoughts

As your business grows and you step away, you’ll need to ensure you have staff who can take over various activities. Reviewing and documenting your processes, automating what you can, and identifying areas where your business is overly reliant on you will set you up for success.

Kind Regards,
The Team at London Accountants

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Tips to Navigating the Post-pandemic Business Landscape!

Posted on by Megan Davies

Tips to Navigating the Post-pandemic Business Landscape!

Covid has resulted in many business transformations. While some small businesses found themselves shifting their offerings, others moved online or found new niches. If you’re wondering how to continue moving your business forward following Covid, you’re probably not alone.

Here are some important tips for navigating the business landscape following Covid.

1. Explore your remote options

Having a business model that enables you and your staff to work remotely gives you incredible flexibility in how you run your business. That doesn’t mean you have to move to an entirely remote work-force, although you can if you want to, but it does mean that should your staff have to work from home, they can still access the information they need to do their jobs.

Where information may have been stored on your computers’ hard drives, consider moving to cloud-based options (see our previous post about Cloud Accounting), which allow for secure remote access. If you have documents that need signing or require collaboration, look into tools that allow staff to do so from wherever they happen to be.

2. Create an in-person experience for people purchasing from you remotely

Where possible, shift your business so your customers or clients get a remote experience that comes close to matching the experience they have when they visit your store or office.

You can explore offering telemedicine either online or through phone calls. If you have a retail store, consider offering virtual reality changing rooms, so people can see how the clothes they want to buy online look on them. Furniture stores can enable customers to upload pictures of their rooms so they can see how the furniture they’re considering would look in those rooms.

While a remote experience won’t ever be exactly the same as an in-person experience, there are things you can do to give customers and clients similar services that make their purchasing decisions easier.

3. Talk to your customers and clients about their needs

What your customers and clients needed from you before Covid may now have changed, and it’s important for you to identify those changes and shift accordingly. Many households have changed their routines and developed new habits, some of which will persist for years.

Is there a new product or service you can offer to help them? Are they concerned about being in your office in person? Are they more eager than they used to be to get out of their homes? Have they shifted to online shopping enough to justify you having an online store?

Don’t guess at the answers to these questions, reach out to your customers to ask. Ask them how their habits have changed, what they’re looking forward to buying from you and what concerns they have about returning to in-person transactions.

4. Explore your data

While it’s important to talk to your customers and clients about how their lives have changed, take note of how your market has changed. If you run a hospitality business that thrived on tourism, have you made up for it by marketing to locals? Are more of your customers coming from a different market segment than they used to? Did a service you provide suddenly take off during Covid?

Look at what your numbers and data are telling you. Although not all changes will be permanent, how your numbers have shifted can indicate new paths for you to follow and new ways to market your business.

Final Thoughts

The post-Covid business landscape will most likely look different from pre-Covid. By following a few steps, you can make the transition smoother for you, your team and your clients.

Kind Regards,
The Team at London Accountants

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4 Reasons to Switch to Cloud-based Accounting

Posted on by Megan Davies

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 (our fave) 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 Xero makes invoicing super 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 – easy!

3. Accessibility

With a cloud-based accounting system like 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 a system like 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’d like to know more about Cloud-based accounting!

Kind Regards,
The Team at London Accountants

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