Pro-AccX

Today is World Mental Health Day 2022 🎗.

It reminds us of the focus on raising global mental health issues awareness.
This year's theme is 'making mental health and well-being for all a global priority' 🌍.

Many factors are causing mental health problems, such as childhood abuse, trauma, discrimination, social and economic inequalities, bereavement, long-term stress, racism, and many more.

Since the Covid-19 pandemic, however, millions' mental health has been challenged and increased significantly.

Your mental health is a crucial part of your well-being. This aspect of your welfare determines how you're able to operate psychologically, emotionally, and socially with others.

It's essential to guard and improve psychological wellness using appropriate measures.

Protecting your mental health is easier than you might think. We can all do it daily and with simple activities that help us feel well 😊.

👉Here are some mental health tips proven by research that you can use too!

➡️Eat healthy food 🍓🥦🧄.

➡️Get closer to nature🌳🦋🐜.

➡️Learn to understand and manage your feelings 🤯.

➡️Talk kindly to yourself 🗣.

➡️Talk to someone you trust👫👪.

➡️Be aware of using drugs and alcohol to cope with difficult feelings🍻🚬.

➡️Try to make the most of your money and get help with problem debts💰.

➡️Get more from your sleep 🛏😴.

➡️Be kind and help create a better world 👼🙏.

➡️Keep moving 🚴🤸‍♀️.

➡️Be curious and open-minded to new experiments 💡⚗.

➡️Plan things to look forward to📋.

Staying on top of our mental well-being is good for us now but also helps us manage difficult times in the future🙃.

Remember ❗️MENTAL HEALTH MATTERS ❗️

I often see businesses struggling with payment collection. 💸

Ensuring you get paid on time is crucial to your business's success. 🕛

Let's be honest.

You can't manage your cash flow effectively or raise profits if customers don't pay their invoices on time.

The easier you can make it for customers to pay you, the faster you'll see cash coming into the business.

Having set up specific collection processes 🧾and following rules, your ability to cover your operational costs and your capacity to fund your business's growth and expansion strengthen your financial position.

Here are a few tips on how you can improve the payments processes: 👇

📌 Send electronic invoices
📌 Invoice customers as soon as you can
📌 Set Up Early Payment Incentives
📌 Request Payment Before Services Rendered
📌 Send a pre-invoice reminder
📌 Set out clear payment terms
📌 Be organised about your payment admin
📌 Embrace the available payment technology

Offering more ways to pay makes the whole process more convenient for your customers and will generally result in faster payment times💪.

Get in touch if you want to improve your payment times and boost your cash flow. We can help you streamline your payment processes and embrace the latest in payment tech.

🎁Giving occasional gifts to your staff is a great way to keep them engaged and motivated.

Certain lower-value gifts can be given to employees (including directors) tax-🆓.

These have to be classed as ‘trivial gifts’ to qualify.

🤔What counts as a ‘trivial gift’?

To be treated as ‘trivial’, the cost of each gift 🎁 mustn’t exceed £50. The whole value is taxable if the cost is higher, not just the excess. The limit is per gift, but for directors and their (employed) family members, there’s an annual cap of £300.

Are there any other restrictions 🛑?

Any gifts you give should be for things like weddings👰🤵 , anniversaries 🎉, Christmas 🎅, or general goodwill gestures. It can’t be part of a salary sacrifice agreement, or a reward for work one of your employees has performed.

We all know that dividend payments 💷 are a vital way to pay yourself and your fellow company shareholders when your business makes a profit.
🤔But are you following the proper rules when taking out dividends from your company?

If you unknowingly make illegal ⚖ dividend payments, there can be significant tax and other consequences – even if you were unaware that they were not valid at the time.

If you stick to the proper procedures and keep the correct records, there shouldn’t be any issues😊.

Key considerations when planning a dividend payment:

1️⃣ Dividends can only be declared from after-tax profits available for distribution to shareholders. Payments made from any other source don’t meet the regulations.
2️⃣ It’s possible for some profits to arise in the accounts, but these are not to be available for dividends. Usually, this is because they are ‘paper’ profits, such as those arising on a revaluation upwards of assets. Until the gain is realised, i.e. the asset is sold, the profit can’t be used to support dividends.
3️⃣ Another complication arises because ‘cash’ and ‘reserves’ measure differently. It’s entirely possible to have more cash in the bank than distributable profits – and to pay out a dividend that doesn’t meet the rules.
4️⃣ An exact after-tax profit figure will often only be calculated at the end of the financial year, but that’s insufficient for declaring dividends during the year. Even if there were reserves at the end of the last year, it doesn’t follow that subsequent losses haven’t reduced them in the current year.
5️⃣ Ideally, management accounts should be drawn up regularly (monthly or quarterly) during the year. Provided that they’re adequately prepared and allow for relevant accounting adjustments and tax charges, they can form the basis for ensuring that the dividends you’ve declared comply with the letter of the law.
6️⃣ To declare dividend legally and correctly, you should:

📍Have up-to-date management reports that show your company's financial
position.
📍Hold a board meeting to declare the interim dividends that are required.
📍Ensure that both the board minutes and dividend vouchers are prepared on
time.

7️⃣ They can be reversed if dividends are declared illegally due to insufficient profits and not following procedures. This could result in an unexpected overdrawn loan account, with tax consequences for the company.
8️⃣ If the company goes into liquidation, any illegal dividends paid will be required to be refunded to the company.

❗️Keeping on top of your accounting is crucial to ensure that your dividends are legal and made correctly.

☎ Talk to us about dividends and setting up regular management reporting.

👉We can help keep track of your finances regularly throughout the year and help meet your obligations when making dividend payments, but we also give you an enhanced financial overview to help manage your company and make more informed decisions.
Get in touch to discuss your dividend plans.

👑 CASH IS KING 👑

The foundational goal of any business is to make a profit 💰.

👨‍💼 As a business owner, your key financial aim is to make enough sales at a high enough margin to generate profit from your enterprise.

But how does profit differ from cash flow? And why is cash king?

How do profit and cash flow differ?

• What is profit? – Profit is the surplus left from your income once you've paid your direct costs, other expenses, and tax. 📊

• What is cash flow? – Cashflow is the ongoing process of ensuring that the business has the available cash needed to operate. This process provides the money to trade, pay suppliers, cover wages, and buy raw materials.💸

Why is positive cash flow so important?

'Cash is king!' 💷

It's an old phrase, but any successful business model keeps it in mind. Yes, it's great to make a profit at year-end, but if you don't look after your cash flow, the business may not survive at the end of the year.
A business can generate high revenues and big profits but still be cashflow poor. In other words, it can have profits at the end of the period but have very little liquid cash to fund its day-to-day operations.

👉Talk to us about improving your cashflow management

Managing your profit and cash flow is an invaluable business skill.
Good cash flow management controls your cash inflows (income) and cash outflows (what you're spending). To achieve 'positive cash flow', you must work proactively to keep your inflows higher than your outflows.

🏦The Bank of England warned that the UK may already be in a recession 📉driven by multiple factors causing the economy to stall and falter. However, with an improved understanding of the problems, you're better set to take action and reduce the impact.

We have listed 5 significant economic threats for UK businesses:

👉High-interest rates – The Bank of England has recently raised interest rates from 1.75% to 2.25%. This move is terrible news for any businesses in need of funding. Higher rates make borrowing more difficult and increase the cost of repaying existing loans and finance facilities.
👉Rising inflation and high costs – UK inflation is currently at 9.8%. Rising inflation pushes up prices for goods and your day-to-day overheads, making it harder to stretch your working capital and cash flow.
👉The supply chain crisis – keeping supply chains running has been challenging during the Covid pandemic. When you add in the Ukraine war and the rising problems of climate change, it's easy to see how significant the global supply chain crisis has become. When supply is scarce, this pushes up demand, raising the price of raw materials and goods and slowing down the supply chain to a point where businesses can't operate effectively.
👉Post-Brexit fallout – the outcome of leaving the European Union (EU) has proved to be difficult for many UK businesses. The additional red tape, long wait times for shipping and freight, and customs & excise costs have made it impossible for some sectors to trade at full capacity.
👉UK recession – these external factors are gradually forcing the UK into an economic corner, with the Bank of England predicting that the UK will fall into recession in 2022, leaving businesses with the prospect of a prolonged period of financial instability.

📣Getting your business recession-ready
There are challenges ahead, but there are also ways to bolster your finances, plan and get your business ready for the impacts of a UK-wide slowdown.
If you're worried about the potential impact of a UK recession, please come and chat with us. We can do everything possible to reduce the effects of an economic downturn.

23 September 2022, UK Chancellor of the Exchequer Kwasi Kwarteng set out a positively surprising package of tax cuts for the UK, reducing levies on workers' pay and companies to boost the economy's long-term potential.

💼 Mini Budget 2022 Highlights 👈

📌Income tax
• Cut the basic rate of income tax to 19% from April 2023
• Currently, people in England, Wales, and Northern Ireland pay 20% on any annual earning between £12,571 to £50,270 (Rates in Scotland are different).
• 45% higher rate of income tax abolished
• One single higher rate of income tax of 40% from April next year
• Dividend tax will revert to original rates from April 2023 - they all rose by 1.25% in April 2022

📌National Insurance
• Reverse a recent rise in National Insurance (NI) from 6 November
• Workers and employers have paid an extra 1.25p in the pound since April
• New Health and Social Care Levy to pay for the NHS will not be introduced

📌Corporation tax
• Cancel the rise in corporation tax which was due to increase from 19% to 25% in April 2023

📌Annual Investment Allowance
• Annual Investment Allowance will remain at £1,000,000 instead of the planned reduction to £200,000

📌IR35 Reform
• The IR35 rules will be simplified, and a more straightforward system will be introduced.

📌Benefits
• Rules around universal credit tightened by reducing benefits if people don't fulfill job search commitments.
• Around 120,000 more people on Universal Credit to be asked to take active steps to seek more work or face having their benefits reduced.

📌Stamp duty
• Cut to stamp duty which is paid when people buy a property in England and Northern Ireland
• No stamp duty on the first £250,000, and for first-time buyers that rises to £425,000 - it comes into operation today

📌Energy
• Energy bills for households have been capped at an average of £2,500 a year for two years.

📌 Shopping
• VAT-free shopping for overseas visitors
• Planned increases in the duty rates for beer, cider, wine, and spirits were cancelled.

THE POWER OF AUTOMATION

🕙Spending enormous time wading through tedious and unproductive admin instead of growing your business is killing the company's
growth 📈and overall efficiency.

💡Fortunately, intelligent business tools can go a long way towards automating low-level admin tasks.

📌 Automation is a meaningful way to ease your business workload, with various business apps and cloud solutions offering ways to automate your admin and remove manual admin tasks.

❗Here are 5 tips on how Automation can help your business:

👉 Automated bookkeeping – taking a photo of your receipts, expenses, and invoices and 'optical character recognition (OCR) technology will digitize the output and pull it through into your accounts software. No data entry, no human error and no lost receipts!
👉 Automated credit control – chasing up debts and late-paying customers takes time. Automated credit control apps track your debtor numbers and automatically send customised chaser emails when an invoice is late. This system reduces your credit control time, speeds up cash collection, and cuts your aged debtor figure.
👉 Automated payment collection – the easier it is to pay you, the faster your customers will pay. Automated card payments and cloud-based Direct Debit solutions allow you to automatically take payment from a customer as soon as an invoice is due. Some solutions will even automate the invoice matching and bank reconciliation process.
👉 Automated reporting and forecasting – the better your reporting and business intelligence, the easier it is to make informed decisions about your company strategy. Accounting platforms and fintech tools now offer automatic, real-time reporting and forecasting, allowing fast access to critical numbers and metrics.
👉 Automated digital marketing – digital marketing is a key to raising your brand's profile. Marketing platforms offer important time-saving ways to schedule and post social media content or email automation that sends a pre-programmed cadence of emails to specific target audiences within your wider customer base.

👩‍💻If your admin is starting to hold you back, let's talk about how automation can pick up some of the heavy liftings and give you the metrics you need for decision-making. In addition, we can review your business processes and identify automation opportunities, helping you choose the best apps to drive your business efficiently.

Bookkeeping is undoubtedly a hassle.

It really is more than just data entry.

The real value comes with the verification and control accounts reconciliation – when you check to ensure everything is 100% correct.

With Making Tax Digital reform, this is now even more important than ever!

Reduce the risk of errors in your financial data by putting processes and systems in place.

💡Following these bookkeeping steps will help you maintain accurate records:

🔹Keep all personal and business finances separate.
🔸Establish a routine to update your documents regularly.
🔹Make sure you categorize business expenses.
🔸Account for your cash payments properly.
🔹Make sure you have posted all bank transactions.
🔸Complete the bank reconciliation.
🔹Post all purchase invoices and keep them all to support your claim.
🔸Maintain fixed assets registered.
🔹Review balance sheet items for accuracy.
🔸Monitor trade debtors and trade creditors regularly.
🔹Account for accruals and prepayments.
🔸Use cloud accounting software to make your life easier.

👉 Follow me for more finance tips.