Category: accounting news

When you’re busy running and growing your business, it’s generally not a priority to think about who will take over when you can’t or don’t want to be so involved. Transitioning leadership can be a challenging task. It demands an insightful and systematic approach to ensure that the process runs smoothly. Achieving a successful handover requires detailed and strategic planning that will benefit both the departing leader and their successor.

Here’s how to prepare:

Understanding the Current State of your business:

Before embarking on the search for a successor, it is crucial to have a clear understanding of the current state of your business. Evaluate its strengths, weaknesses, opportunities, and threats. Identify the key challenges and goals you want the successor to address and achieve. This analysis will serve as a foundation for outlining the qualifications and skill sets required for the role.

Identify Key Qualifications for a Successor:

Consider both technical skills and leadership qualities. Evaluate the core competencies required for the role, such as industry expertise, strategic thinking, financial acumen, and the ability to build and motivate teams. Additionally, assess the values and cultural fit that align with your business’s vision and mission.

Research Potential Candidates and Their Skillsets:

Look within first, considering employees who have shown promise and commitment. Additionally, explore external talent pools, such as industry associations, professional networks, and educational institutions. Seek out individuals with a track record of success, relevant experience, and a strong work ethic.

When researching candidates, consider their past accomplishments, leadership roles, and their ability to adapt to changing business environments. Look for individuals who have demonstrated the capacity to learn, innovate, and drive results.

Create an Outline of Job Responsibilities for Your Successor:

Create a comprehensive outline of job responsibilities for your successor. Clearly define their roles and responsibilities, taking into account the challenges and goals you identified earlier. Develop a detailed job description that outlines the scope of the position, reporting lines, and key performance indicators. This will provide a clear roadmap for your successor’s future success.

Develop a Comprehensive Training Program to Prepare the Successor for Leadership:

To prepare your successor for leadership, develop a comprehensive training program tailored to their needs. Assign them progressively challenging tasks to develop their skills and provide constructive feedback to foster growth.

Encourage your successor to take on cross-functional projects to gain a holistic understanding of the business. Offer opportunities for exposure to different aspects of the company, including finance, operations, marketing, and human resources. By providing a well-rounded training program, you will equip your successor with the necessary skills and knowledge to excel in their new role.

If you need assistance with this process or want advice on how best to prepare for succession planning, our team are ready and waiting to help. Contact us today

Good luck!

Looking for a Fulham accountant for your business, or a tax advisor in London? Get in touch – we’d love to help.

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

Kind Regards,
The Team at London Accountants

Q. I am finding it tough. Sales are slowing but I can’t figure out exactly why. No-one seems to be unhappy with what we do, and no competitor has entered the market.  People seem to be buying less often and in lower numbers.

Your existing customers are your most valuable asset. This is because it’s easier and far less expensive to get an existing customer to buy off you again than to find new customers. So here are 17 ways to gain repeat business from existing customers, or to get your customers to think more positively about your business. The golden rule for success in business is to get your customers to believe that they are more important to you than anyone else.

Because small businesses are very diverse, not all these tactics will be relevant to your particular business. But many will be, so make a commitment NOW to try at least one, if not more, of these tactics.

1. Send a thank-you letter within two days of the customer buying off you. If at all possible, send a note the next day. It only has to be a handwritten note on a standard card—though a professionally typed letter is better. Other variations include sending a cartoon with your caricature to say thank you, or even a cartoon card (depending on who the customer is and how much they have spent).
   
2. Send an offer of a product or service that’s related to what they bought, usually after one month. Offer a discount or special deal. If you don’t have any complementary products or services, then find a business that does and offer their products. Then get that business to do something similar with their customers, but this time with your products or services as the offer.
   
3. If you sell products (such as printers) that use consumables, use your database date-of-sale records to predict when they might be ready to buy these consumables so that you can send them a ‘special offer’. Use the same technique for products that have a definite use-by date (such as timing the letter for when a lease arrangement on equipment is about to expire and newer technology is available).
   
4. Send out a questionnaire once every three to six months to see what your customers now want, and to see if your market has changed. Use the feedback to update your database and refine your product and services mix.
   
5. If you have a small number of highly loyal customers, then continue to acknowledge their custom with simple ideas like sending birthday and Christmas cards to them.
   
6. Try a telemarketing exercise. Ring up the customer with a brief message about a special or new product they may like to try. If possible make the offer free, or offer some incentive that provides a genuine saving or deal for existing customers only.
   
7. Send out a regular or email newsletter to your customers (even once every six months). Inform them about what is happening in your industry, community or area. Give tips relating to whatever business you are in. If you run out of ideas, then contact another business to share the newsletter (you can also share costs). Note: an email newsletter costs only a fraction of a conventionally printed and posted newsletter and the Internet offers a huge resource of useful information.
   
8. Run a customer contest that only existing customers can enter. This rewards them for being your customer — not the competition’s.
   
9. In appropriate instances you may be able to ask for referrals. Something along the lines of: ‘If you thought that we did a great job, then we’d really appreciate it if you could send us the names of three people who could also benefit from our product/service’. Or you could simply ask for your name to be passed on to any people the customer may see as needing your help. Sometimes you can also include a special deal for their friends. Be careful here, though: don’t make this deal better than the one the original customer received!
   
10. If you have a new product or new technology just about to be released, then hold a ‘customer-only’ preview. Supply refreshments. This could even relate to someone else’s technology. For example, if you have just bought a new colour printer, invite your customers to see what it can do. Get them to bring in some printing so you can demonstrate on their work. You can also the supplier of the equipment to share the costs – it’s promotion for the supplier too.
    
11. Have a sale that is available only to existing customers. Send them an invitation that selects them out as special and points out that the public will be excluded.
    
12. A variation on the above is to offer existing customers first choice at your sale for a certain period (such as a few days or a week) before the sale is opened to the public.
    
13. Try sending a letter or card or email that does not try and sell anything, but just keeps them informed of interesting facts or information for their use. This way, they don’t always associate hearing from you with hard sell. Instead, they come to look forward to receiving helpful information from you.
    
14. If your customers spend lots of money, and the profit per item is large, then send your customers relevant CDs or videos. For instance, if you sell to other businesses, you could send them CDs or videos on selling or marketing, or motivation. Or even in the case of especially good customers a video on their interests: find out from the survey you sent them what sports they follow, and then send them the corresponding video tape of rugby’s greatest tries, soccer’s best goals, highlights of the netball series or whatever. Stick your business name on the video.
    
15. Send customers a catalogue of all your products, and offer to direct mail to them anything they need.
    
16. A variation on this if you have a website is to offer preferred customers a special PIN number or password that allows them to log in to sections of your website (special discounts, sales, etc.) that others can’t access.
    
17. Come up with a special anniversary offer one year exactly after the customer first bought off you. If the offer is taken up, repeat the idea every year.

There must be something for every business in this list. The whole idea is to keep in contact with your existing customers, to build goodwill and positive word of mouth. By making them feel privileged and special you’re preventing the possibility that YOUR customer will be lured away by the competition. They couldn’t possibly after the way you look after them!

Looking for a Fulham accountant for your business, or a tax advisor in London? Get in touch – we’d love to help.

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

Kind Regards,
The Team at London Accountants

As a small business owner, you know that managing your finances is crucial to the success of your business. But with so many accounting principles and practices out there, it can be challenging to know where to start. That’s where we come in! In this guide, we’ll break down the essential accounting principles that every small business owner should know. We’ll discuss how these principles can help you keep track of financial transactions, create accurate financial statements, and make informed decisions for your business. So, let’s dive in, shall we?

Why Are Accounting Principles Important for Small Businesses?

Accounting principles are the foundation for any successful business. They provide a uniform framework for recording and reporting financial transactions, ensuring consistency and accuracy in your financial records. By adhering to these principles, you’ll be able to:

• Make better financial decisions based on accurate and reliable data
• Monitor your business’s performance and identify areas for improvement
• Meet legal and regulatory requirements for financial reporting
• Build trust with investors, lenders, and other stakeholders

Let’s explore some of the key concepts you need to know.

IFRS: International Financial Reporting Standards

International Financial Reporting Standards (IRFS) – as the name implies – is an international standard developed by the International Accounting Standards Board (IASB). 

IFRS is used in more than 110 countries around the world and is a set of principles that help companies around the world show their financial information in a clear and consistent way. Think of it like a common language for money matters, so everyone can understand and compare how businesses are doing financially, no matter which country they’re from.

Accrual Accounting vs. Cash Basis Accounting

When it comes to accounting methods, there are two main options: accrual accounting and cash basis accounting.

Accrual Accounting is the more widely accepted method, where you record transactions when they are earned or incurred, regardless of when cash changes hands. For example, if you invoice a client for services provided in December but don’t receive payment until January, you would record the revenue in December under accrual accounting.

Cash Basis Accounting, on the other hand, records transactions when cash is received or paid. In the example above, you would record the revenue in January when the payment is received.

Double-Entry Accounting: The Backbone of Financial Record-Keeping

Double-entry accounting is a fundamental accounting principle that requires every transaction to be recorded in at least two accounts: one as a debit and one as a credit. This system ensures that your books are always balanced and makes it easier to detect errors or discrepancies in your financial records.

Here’s a simple example: When you purchase inventory for your business, you would record the transaction as a debit to your inventory account and a credit to your cash account.

By using double-entry accounting, you’ll have a clear and accurate picture of your business’s financial position, allowing you to make better financial decisions.

Practical Examples and Case Studies

To illustrate how these accounting principles can be applied in practice, let’s look at a few real-life examples:

• Example 1: A local coffee shop owner uses accrual accounting to record sales and expenses. They track their daily sales and expenses, recording them as they are earned or incurred, rather than waiting for cash to change hands. This allows them to monitor their cash flow and make informed decisions about purchasing inventory, hiring staff, and investing in new equipment.
• Example 2: A freelance graphic designer uses cash basis accounting for their business. They record income when they receive payments from clients and expenses when they pay for software, supplies, or other business costs. This simple approach helps them stay on top of their cash flow and ensures they have enough money to cover their expenses.

Becoming knowledgeable in accounting principles has the power to transform the way you run your small business. A strong grasp on your financials enables you to make informed decisions and accelerate revenue growth.

Looking for a Fulham accountant for your business, or a tax advisor in London? Get in touch – we’d love to help.

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

Kind Regards,
The Team at London Accountants

We now look at eight characteristics important to successful businesses. International researchers who have studied many small businesses have found that these characteristics consistently play a part in the success of small companies.

The eight characteristics are:

• Owners leading by Example
• Having a simple business structure
• Information sharing among employees
• Staff are carefully chosen
• Staff commitment and loyalty
• A unique product or service
• A specific Customer focus
• Prompt follow up

1.   Owners leading by example

The owner or manager leads by example. He or she is usually the first to arrive, the last to leave. The owner knows everyone by name and their presence is obvious. They show a strong commitment, setting the standard where they work. This commitment should be easy to understand, after all if they don’t work hard in their own company, how can they expect any one else to take their business seriously?

2.   Simple business structure

They operate a simple and open business structure, encouraging easy access to the owner for every employee. They value the contribution of each employee, many of whom are given the opportunity to influence aspects of the business that would ordinarily be denied them in a large hierarchical company

3.   Information sharing among employees

Staff receive information as soon as the owner does. Goals, problems and concerns are discussed openly. Feedback on issues is encouraged and staff are asked to contribute their own ideas for making improvements and overcoming difficulties. It is often this aspect of open communication that staff appreciate the most, after all it is fairly unique to small businesses.

4.   Staff are carefully chosen

Staff are recruited very carefully, because the owner(s) recognise they are the lifeblood of any small business. Staff are hired on the basis that their knowledge, skills and abilities will be beneficial to the organisation rather than because of friendships or family relations. Staff are not only carefully chosen but are nurtured and trained so that both the staff member and the organisation get the maximum benefit possible out of the relationship.

5.   Staff commitment and loyalty

All staff are very committed and loyal: good performance is rewarded with praise, extra responsibility and money—poor performance is not. Consistently poor workers are removed as they upset the rest of the team. Organisations whose staff show optimum commitment and loyalty have a source of competitive advantage that is hard to copy or to beat.

6.   A Unique product or service

Most successful businesses have unique products or services, such as their own designs, products, systems or some other aspect which sets them apart. This uniqueness is an important source of competitive advantage and one which many companies work hard to sustain, adapting and innovating their products or services as their competition catches up on them.

7.   A Specific customer focus

Successful small businesses have a specific focus on their customers and clients and are geared to supplying them with exactly what they want. This focus means adopting a market led approach, with the owners and their managers consistently looking for ways to solve their customer’s problems and improve their products to match their customer’s requirements.

8.   Prompt follow-up

On occasions when an enquiry or complaint is received, successful small companies actively follow up and solve them as quickly as possible. The results are promptly reported back to the client or customer and in the case of complaints, measures put in place to reduce the likelihood of similar issues reoccurring. Successful small businesses view complaints and problems as opportunities for growth and improvement in their businesses.

Looking for a Fulham accountant for your business, or a tax advisor in London? Get in touch – we’d love to help.

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

Kind Regards,
The Team at London Accountants

Retirement is a significant milestone that brings with it the need for careful planning and financial security. A well-planned retirement ensures that you can maintain your desired lifestyle without worrying about running out of money. One of the key components of successful retirement planning is seeking good financial advice. Obtaining professional financial guidance can contribute to a secure and comfortable retirement.

The Benefits of Good Financial Advice

Tailored Retirement Planning

Every individual has unique needs and goals when it comes to retirement. A financial advisor can assess your financial situation, understand your objectives, and design a plan specifically to meet your requirements to ensure that your retirement strategy is both effective and achievable.

Streamlining Savings and Investments

A financial advisor can help you diversify your investment portfolio and allocate assets strategically to balance risk and reward. By doing so, they can improve the growth of your savings and investments while reducing potential losses to a minimum, setting you up for a more financially secure retirement.

Tax-efficient Strategies

Understanding the tax implications of various investment options can be complex. A financial advisor can guide you through the process and help you structure your investments in a tax-efficient manner. This not only improves your returns but also reduces your tax burden during retirement.

Managing Inflation and Market Volatility

Inflation and market volatility can have a significant impact on the value of your retirement savings. A financial advisor can help you navigate these challenges by protecting your investments and adapting to changing market conditions, ensuring that your retirement funds remain secure and continue to grow.

Estate Planning and Wealth Transfer

Good financial advice extends beyond retirement planning to include estate planning and wealth transfer strategies. It’s important to seek advice to ensure the financial security of your loved ones.

When selecting a financial advisor, consider their professional qualifications, as well as their track record of success in retirement planning. This will help you gauge their expertise and ensure that they are well-equipped to address your specific needs.

Understanding how advisors are compensated is crucial when comparing different providers. Make sure you are aware of their fee structure and any potential conflicts of interest. Transparency is key to building a trusting relationship with your financial advisor.

A good financial advisor should provide regular updates on your portfolio performance and be available for consultations and meetings when needed. Effective communication ensures that you remain informed about your investments and can make well-informed decisions.

When to Seek Financial Advice

While it’s never too early or too late to seek financial advice, certain life events and milestones may prompt you to consult a professional. These include major changes in your financial circumstances, such as receiving an inheritance, experiencing a job loss, or approaching retirement age. Periodic financial check-ups can also help ensure that your retirement plan remains on track and adapts to any changes in your life.

Investing in good financial advice can have long-term benefits for your retirement planning. With the right financial advisor by your side, you can look forward to a comfortable and fulfilling retirement.

Looking for a Fulham accountant for your business, or a tax advisor in London? Get in touch – we’d love to help.

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

Kind Regards,
The Team at London Accountants

Don’t miss out on the Tax-Free Childcare program!

According to HMRC, more than 400,000 families utilised the Tax-Free Childcare (TFC) scheme in December, and they are now encouraging other eligible families to check their eligibility and take advantage of it.

In the past, childcare voucher programs were popular, but they have been closed to new participants for many years. In their place, the government created TFC, which provides financial assistance to working families with children up to the age of 11 (or 16 if they have a disability).

An eligible family must establish a TFC account, which is used to cover childcare costs. The government provides financial assistance by contributing to the account. For every £8 deposited into a TFC account, the government adds £2, up to a limit of £500 for each child every three months (or £1,000 for a disabled child).

In its latest press release, HMRC revealed that in December 2022, over 400,000 families received £41.5 million in top-up payments through the program. Families are encouraged to check their eligibility and apply.

However, if you are currently receiving childcare vouchers (still available to those in schemes prior to 4 October 2018), you may be better off sticking with them. It is important to note that if you successfully apply for TFC, you will not be able to switch back to vouchers if your circumstances change, such as if your income or your partner’s income exceeds the £100,000 maximum for TFC.

You can use this tool to determine the best option for your family!

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