Unlike a standard job where your pay lands in your bank account each month, getting paid isn’t as simple for business owners. In fact, it can be quite the experience having to price up your services, send out invoices and even chase late payments.

According to Tide, small to medium-sized businesses in the UK were chasing £50 billion in late payments as of 2020. This is a problem that can easily shut down a fledgeling company, so finding ways to deal with late payments is a key-skill for business owners.

Can you make it easier for clients to pay you?

Yes, it’s your clients’ responsibility to pay you but so that they have no excuse, make it as easy as possible to be paid. Although it isn’t as common any more, asking customers to pay via cheque or similar will really slow down your payments.

Simpler methods such as a ‘pay now’ button on your invoice can work wonders for response times. You might also consider accepting as many payment options as possible, including bank transfers, PayPal, WorldPay or credit cards. Just be aware that some of these may mean you pay fees on what you receive.

Set up regular reminders

Sometimes you might find you haven’t been paid because your invoice has either been lost, or has simply slipped your client’s mind. One great way to mitigate this is to set up regular reminders for invoices you send.

You can either set these as reminders after the payment has become overdue, or send a gentle nudge a week or two before the actual due date. Keeping these as polite reminders rather than blunt ‘chase-emails’ is a great way to give your clients that friendly nudge they may need.

Offer payment plans

If your client is struggling to pay their invoices, you may find that ‘owning up to it’ can be an embarrassing moment for them. One way to avoid this is by offering a payment plan if you think this might be the case.

While this isn’t a perfect solution for you, it can ease a bit of their outgoings, while still putting some money in your pocket. Not only will this strengthen your relationship, but you may even find the favour returned one day. At the very least, you’ll be getting some of the money in, even if only bit at a time.

Early payment incentives

If you desperately need your invoices to be paid as soon as possible, but don’t want to set shorter payment terms, how about offering early payment incentives? Everyone loves a good deal right? Would you pay your invoice straight away if you were offered say, a 2% discount for paying early?

Incentives such as these may lower your incomings a bit, but the tradeoff is that you’ll have your money much sooner. It can even be reiterated in marketing campaigns to pull in new customers.

Late payment fees

One method you could consider to protect yourself from late payments is to include late payment fees in your terms and conditions. While you don’t have to enforce these if a payment is late by a couple of days, it’s a good fallback to have in case of really late payments.

For example, if you have an unpaid invoice that has been dragging on for a couple of months, a quick tally up of late payment fees and a polite email to your client can be enough to hasten payment.

Not only can you charge a fee for late payments, you can also add a certain amount of interest to recoup any losses you may have suffered. For more information on exactly what you can charge, a quick look on the Government website will give you a better idea. If you still need more information, a quick chat with your accountant is extremely helpful.

Invoice finance/factoring

Another option you can fall back on is to use an invoice finance company. These companies work by essentially paying the outstanding invoices for you, or part of them.

When the client finally pays, the invoice finance company takes a cut for their service. It’s not ideal, because you may lose some of your payment on fees, but it’s also a popular way to patch up cash flow issues caused by late payments.

Of course, in an ideal world, everyone would pay on time, but if you’re struggling with late payments, these are some simple steps that might help!

Compare accounting software to find out more about automating your invoicing and payment reminders. 

The post Tips and Tactics for Tackling Late Payments appeared first on The Cheap Accountants.

A lot of business owners are hesitant to take time off and prefer the safety net of keeping in close contact while away. While we would recommend that any business owner take some time for themselves to relax and step away from the business, we know that it’s not always possible. An emergency contact number isn’t ideal if you’re halfway across the world.

So, in today’s post, we’ll be giving you tips on how to stay connected to your business, if need be.

Public Wi-Fi spots

There are plenty of options to choose from – coffee shops, libraries, hotel lobbies or bars. Many of these public places offer free Wi-Fi, or for the price of a few drinks.

However, besides being notoriously unreliable, they’re also not the most secure network option. You could be opening yourself up to hacking if you’re not careful.

Your own Wi-Fi hotspot

Many phone data packages allow you to buy extra data to cover you over a brief period. This allows you to make the most of those times when public Wi-Fi isn’t an option. You can simply tether your phone to your laptop and work that way.

You can also purchase a dongle or a portable Wi-Fi router to take with you. These options are probably more secure than using public Wi-Fi anyway, but you’ll need to spend a bit of money.

While this may be a safer option than public networks, it may not be the most reliable or strongest of connections.

Be selective of where you’re staying

On some hotel comparison websites, you can choose to see hotels that are recommended for business travellers specifically. They usually include good Wi-Fi connections and other business facilities.

However, try to look at the reviews, particularly ones that mention Wi-Fi. Everyone knows saying “free Wi-Fi” means different things for different hotels. Some mean there’s only Wi-Fi in the lobby, others mean you only get an hour’s worth for free.

Tell everyone what to expect

Moving away from internet connections, it’s important to let your staff know how and when they can contact you. This makes it easier to stay in touch and also provide assistance from wherever you are. Try to give your staff a good deal of notice (you expect plenty of notice from them) so that they can make necessary arrangements or adjustments to their workflow.

An email sent around the office with contact details, times and instructions is the simplest method as people can refer back to it when necessary.

Have a single point of contact

Keeping up to date with everyone in the office could be a bit difficult, particularly if you’re on the move. So, having just one point of contact could be a real help. They can channel any information you need to be aware of directly to you.

Use instant messaging

There’s no need to rely on emails when you could just pop a question over an app like Slack or a company Whatsapp group. It’s a simple solution to remain in the conversation at work without having to load up and log into separate work email accounts.

If all else fails…

If getting a reliable internet connection or working from afar is not realistic, perhaps that’s a sign it’s time to switch off. Unless you’re gone for months, your business should be able to last a week without you being there every day.

If you think it really would struggle without your input, then perhaps a company rethink is in order. Are you delegating as much as you should be? Are people trained to cover other people’s roles? Try to build a system that is sustainable as this will make it stronger in general.

How are you planning to stay connected abroad? Or are you taking the opportunity to finally relax? Please share your thoughts below.

The post How to Stay Connected to Your Business While Travelling appeared first on The Cheap Accountants.

This might always have been their intention, and now that they know you’re interested they’re ready to discuss the package in more detail. Sometimes the negotiation is driven by their current employer trying to entice them to stay, and offering to beat your offer. In fact, 50% of candidates that resign will be counter offered by their current employer, research shows.

So what happens next?

Don’t be afraid to say no if you need to

No matter how impressed you were during the interview process, if the budget can’t afford them, then you need to accept it. Agreeing to meet or beat a counter offer when your finances aren’t equipped could land you in all sorts of trouble.

It’s also perfectly fine to reject a counter offer if you don’t feel it is justified. Communicate this clearly and you never know, they may compromise in order to secure their new role with you.

See if you can compromise with other non-monetary perks

If you simply can’t afford to trump a counter offer, don’t despair just yet. Try explaining that you can’t meet the increase in salary right now, but you can offer them some other benefits.

This could be one, or a combination of the following ideas:

• The chance to increase the salary following a performance review 12 or even 6 months down the line
• Flexible working hours and the chance to work from home
• Training which you will invest in on their behalf
• Other ways to save them some money e.g. free parking, free/discounted gym membership

Speak to your accountant

When it comes to matters relating to money, it’s always a good idea to touch base with your accountant. They will be able to look over your finances and offer honest advice about whether you can afford a higher salary.

The post What to Do When a Candidate Comes Back with a Counter Offer appeared first on The Cheap Accountants.

Shop around

It’s surprising how many entrepreneurs spend hours comparing deals on their energy, mobiles and all kinds of insurance for personal and home use—yet the minute they start a business, they carry on that existing energy contract on their premises and grab the first deals they see. Sometimes they feel they haven’t got the time to shop around or the leverage, as a brand new business, to get a good deal.

Sound familiar?

Don’t do it! A little time taken now could save you hundreds of pounds in the future. Use comparison sites to shop around for the best deals on energy, broadband, your business landline or mobile, car insurance, business insurance and public liability.

Don’t be afraid to negotiate and team up

If you can’t find the discounts, rates and delivery options you want, talk to suppliers directly; there are often deals to be done when specific circumstances or agreements are taken into account. Some suppliers, for instance, might offer a discount not usually available on smaller orders if you sign up to order monthly for a set time. Alternatively, why not try joining up with other small businesses to increase your leverage and qualify for discounts or trade deals?

Don’t pay more than you have to—or pay at all if you don’t need to

When it comes to business tools, particularly software and services, big companies love to make small businesses feel they need things they don’t—or that they need to pay for slick packages that actually don’t do any more than far cheaper, or even free, packages do.

Cloud accounting software is a case in point. Try a free or low-cost package like Pandle which can cover all your bookkeeping needs either for free or just £5 a month. You can pay more—but why should you? Always research your options.

Consider hiring rather than employing

There will always be some aspects of your business that you don’t have the time or talent to attend to, whether that’s admin tasks, order packing, web or flyer design or bookkeeping—your time is better spent building or running your business anyway.

Often, you won’t need full-time or even regular part-time time help, but just short-term or irregular help. The solution? Hire a freelancer or the services of another company to take care of these tasks for you. You get someone with all the talents you need without having to concern yourself with finding enough work for them, supplying their equipment, following endless employment rules or paying for their annual leave, sick pay, parental leave or pensions.

Have you found any other great ways to cut your costs? Share them here so that other entrepreneurs can benefit from your experience!

The post Four Ways for Start-Ups to Save Money appeared first on The Cheap Accountants.

Remote working is growing in popularity and is becoming the norm, slowly but surely. There are plenty of benefits to working with remote workers and freelancers.

In this post, we’ll first be discussing the benefits and then how you can manage remote workers effectively.

The benefits of remote workers

You can hire anyone in the world

There’s no need to limit your recruitment efforts to only hiring people in the local area. You can choose literally anyone in the world. There’s no limit.

Save on office space

If you’d rather keep overheads down, you don’t need to invest in pricey office space. You could choose somewhere smaller or even just work from home.

Save on equipment

No need to buy computers, software packages or kitchen facilities when your workers have their own at home. You may need to purchase licenses for software, but overall your costs of hiring an employee are going to be so much less than if they worked with you in an office.

Happier, healthier workers

Numerous studies have shown that commuting to work and sitting in the same office chair for 8 hours a day is bad for our health. And yet, many business owners just accept it as a fact of life.

Giving employees the freedom to choose their own hours, have control over their working environment and having flexible time off leads to happier and healthier staff. This then leads to better productivity levels so it’s a win-win situation.

Attract the best workers

If you have a flexible, remote working job role, this is going to make you a sought-after employer. You’re going to have your pick of the very best employees.

The only downside is you’ll probably have to sort through a lot of job applications unless you headhunt specific people or use a recruitment agency.

How to manage remote workers

A lot of people are still apprehensive about remote workers. There’s admittedly a lot less control over how your employees spend their time.

What if they’re only messing about on Facebook all day?

There’s always that risk. However, if you do your research and find the right employee, you shouldn’t have a problem.

Giving employees control over their time and environment is actually shown to boost productivity rather than hinder it. As remote working opportunities are so few and far between, a good employee would be unlikely to risk this privilege by abusing the freedom and flexibility you’ve offered them.

Sign up to a messaging app

With plenty of apps to choose from, it’s easier than ever to keep in touch with remote workers online.

Slack has grown in popularity since it was released over five years ago, just as remote teams have taken off. It’s free to use for small teams and can be used as a way to catch up, share documents, and get critique or even set up a video call. Other popular options include Zoom video conferencing or Skype.

Get help with project management

Project management solutions such as Asana, Monday, Hygger or Trello have made it much easier for people to collaborate and manage workloads remotely. You can see what your employees are working on, create content calendars, set project deadlines and label projects by priority.

Have regular catch-ups

Try to set aside time to catch-up one-to-one with remote workers to see how they’re finding things. Personal issues or things they’re struggling with might get pushed to one side when doing group meetings or pinging work-related messages over Slack.

It’s important that you’re supporting remote workers in the same way you would with regular office workers.

Be flexible

The beauty of remote working is that it’s flexible. So don’t be so rigid with your working day. Give people the freedom to take a break when they want, to schedule a doctor’s appointment or head out for a long lunch.

This is especially important for those working in different time zones. You can’t expect everyone to follow your rigorous schedule.

You’ll find more often than not that people appreciate this freedom and will return to work more productive. Not everyone is looking to escape or lead a lazy working lifestyle.

Do you work with remote workers? Have you ever worked remotely yourself? Share your stories and tips for success below.

The post How to Work With Remote Workers Effectively appeared first on The Cheap Accountants.

This time of year is really popular for people to become new business owners, so we wanted to give newbie freelancers a helping hand.

The main things to consider are:

• Income tax
• National Insurance Contributions
• Business expenses
• Self Assessment
• Bookkeeping

If you’ve never had any experience with these things before, don’t panic! This blog post will hopefully clear a few things up for you.
 

Income tax

Let’s start with the main one. Income tax is the same kind of tax you pay as an employee through PAYE, but if you become self-employed, you’ll have to do it differently. It won’t directly come out of your earnings, you’ll have to work it out and do it all yourself.

The percentages are the same as with employment. So, it’s 20% for earnings between £12,570 and £50,270. Between £50,270 to £125,140 is 40% and over that, it’s 45%.

However, please note that these figures can change at the start of a new tax year (every April) – so always check for up to date figures!
 

National Insurance

This is slightly different when you go self-employed. As an employee, you will be used to paying Class 1 NI. However, now it’ll be Class 4.

Class 4 is for profits over £12,570 and under £50,270. This is set at 6% of profits. For earnings over £50,270 it’s 2%.

National Insurance is something that will need to be put on your Self Assessment tax return, along with all details of your income, for Income Tax purposes too.
 

Expenses

Now for the good news. You can reduce your profit figures – but this is a good thing!

If you’re paying a percentage of your profits in tax, naturally having a lower profit figure will equal less tax to pay.

A lot of people get a bit apprehensive about this bit but don’t worry. We’re not talking about dodgy tax dealings, this is just a legitimate way to ensure you’re not paying more tax than you need to. Every business does it, and HMRC expects you to claim for expenses.

Basically, anything you earn that you spend back on the business is not profit. It’s an expense and should therefore be deducted from your profits.

The way it works is: Earnings – expenses = profit

So, it’s really important you keep track of all business expenses and keep receipts and invoices, should HMRC ever ask for them. Just make sure what you’re claiming for is solely for the purpose of doing business. Anything that doesn’t look right could spark a HMRC investigation.
 

Self Assessment

This is how you record all your income and expenses for HMRC. You will need to submit a Self Assessment tax return by January 31^st each year and also pay what you owe by then.

Please don’t wait until the deadline to get everything done though!

First of all, you’ll need to register for Self Assessment. This needs to be done by October 5^th in your business’ second tax year. It can easily be done online on the government’s website.
 

Bookkeeping

In order to keep track of all your incomings and outgoings, you’ll need to put a bookkeeping system in place. A lot of people still swear by spreadsheets, but we’d definitely recommend trying out some bookkeeping software instead.

Modern bookkeeping software will automate a lot of processes for you, which saves time and reduces errors. Having cloud-based bookkeeping is also handy if you’re on the move a lot because you can access things remotely.

Overall, things are easier than they sound. The most important thing is to get organised and read up on what you need to do. Make sure you keep good records and do everything above board, and you’ll keep on HMRC’s good side.

Do you have any questions about the information above? Are you looking for an accountant who can handle it all for you? Get a free quote for low-cost accountancy services.

The post A Newbie Freelancer’s Guide to Tax, NI and Expenses appeared first on The Cheap Accountants.

We get it… it’s easy for us to say that because we do it day in, day out and us telling you that everything will be hunky dory as long as your accounts are in full working order probably won’t make a VAT Inspection any less daunting.

This can be particularly true for cash businesses or those in industries such as food and hospitality when there is often much more room for deliberate or genuine error when it comes to VAT reports.

Why do I need a VAT Inspection?

You can be reassured in the knowledge that HMRC don’t just run VAT Inspections willy-nilly. There is almost always a reason as to why you (and your business) have been chosen to go under the magnifying glass.

These include:

• Under-declaration of sales
• Anomalous figures that stick out from industry standard like a sore thumb
• Consistently late or wrong accounts
• Incorrect VAT treatment of tips, gratuity or service charges
• VAT returns that don’t tally with the annual accounts submitted

In a nutshell, VAT Inspection is highly risk-based and will typically only be subject to those businesses or business owners who have provoked some form of risk, liability or suspicious activity through purpose or error.

Preparing for a VAT Inspection

What will normally happen is HMRC will get in touch and give you a specific timeframe they wish to see figures for. They will give you an appointment date and then leave you with adequate time to get your affairs in order.

From this moment, you will need to:

• Present all of the information and necessary paperwork in a clear, concise format such as a spreadsheet. A trained finance professional can help with this.
• Highlight and justify any mistakes or holes in your VAT files for full disclosure with HMRC.
• Familiarise yourself with the VAT Inspection process so you know what to expect on the day, as well as before and after your appointment.
• Prepare rough answers to any questions that you might be asked so you aren’t caught off-guard. Again, an experienced accountant will be able to help with this.
• Be able to provide a full audit trail of any transactions that have or haven’t been included in your VAT submission. This is also important should you be called upon by HMRC’s Till Officers who will also want to know more about your till systems.
• Go through your figures two times, three times, four times or however many times it takes to know the figures like the back of your own hand. This way, you will feel more confident when asked to discuss them in great detail.
• Answer any follow-up questions, provide any additional information and make any necessary payments promptly and within the specified deadline to avoid hefty penalties.

If you’ve got a VAT Inspection on the horizon, or you’d just like some professional help in getting the right numbers in all the right places in case one should arise in the future, get in touch with one of our qualified experts.

The post How to Prepare Your Cash Business for VAT Inspection appeared first on The Cheap Accountants.

Frightening figures, and even more frightening is how difficult it will be to challenge it.

So, what can you and your business do to help the world beat climate change?

In this article we’ll be looking at ways to make your business greener. These approaches won’t break the bank or negatively affect the delivery of your services. In fact, some of them are exceptional business practice, even without the green credentials, and as such can benefit your business in terms of the bottom line, your reputation, winning clients and more.

Going green – tips for any type business

These pointers can be used by any kind of company.

• Consider exploring regulations set by the International Organization for Standardization (ISO). They have a specific set of formal standards called the ISO 14001 which are aimed at helping businesses handle their environmental responsibilities.
• Spread the message of action towards climate change to your employees. Encourage them to cycle to work with a cycle to work scheme, remind them of the importance of saving electricity and recycling where possible. Furthermore, listen to your employees. They are often the source for identifying where wastage can be stopped. Motivate them to be greener and reward them for doing so.
• Examine the ways your business uses energy and materials. A significant portion of your business’ practices will produce emissions and hence have an impact on the carbon footprint of your business. One place to start would be switching to renewable energy suppliers. It’s worth conducting an environmental audit to see how you compare to others in your industry. By making changes that make you greener, you can then use this as a unique selling point.

Production based companies

Companies that manufacture products have slightly different requirements to ensure they are minimising their carbon emissions. This distinction is because they must consider the carbon footprint of where their resources come from and how the product is made. They need to consider their whole supply chain.

You will need to consider:

• Where are the resources coming from to build your product? Find a supplier that is nearby or in the same country, as opposed to overseas. If the distance is less, there are fewer emissions produced through transportation. This may not necessarily be cost-effective, as local suppliers could be more expensive. But, the carbon neutrality of the product could be marketable. However, it’s worth exploring with local suppliers how they can serve you whilst keeping costs down.
• The ‘green factor’ when designing and building your company’s products. Firstly, ensure that, as listed above, the technology used in the process is energy efficient. Secondly, the product itself should produce as little waste as possible. In an ideal world it would be entirely biodegradable, but at the very least it should be recyclable. Don’t forget to also consider packaging. Again, this can become a unique selling point for your brand.

We hope you’ll take some of the above points on board. Even the slightest changes can help make a difference.

What steps are you taking to make your business greener? Please share your thoughts below.

The post How Your Business Could go Greener appeared first on The Cheap Accountants.