Welcome
We pride ourselves on being a leading independent firm of Chartered Accountants and Tax Advisors, providing clients with practical and realistic business advice. Not only are we committed to a high standard of service in accounting and taxation matters, we aim to provide our clients with information that may be important to the running and development of their businesses through advice on a wider basis, helping them to achieve greater efficiency, profitability and cost reductions.
With specialised consultants and professional staff, our clients are located in and around the Sheffield area. Our aim is to provide comprehensive, Fixed Fee accounts and taxation services to small and medium sized businesses; this includes family owned companies, contractors, partnerships and sole traders.
What Contractors Should Look For In an Accountant
Accountants in Sheffield – Contractor Accountant
All businesses need to make sure that they have someone looking after their financial affairs, small businesses especially tend to depend on the help and advice of their accountant quite heavily, often using him as a sort of unofficial Finance Director, but when it comes, to the sole contractor, often trading as a Limited Company without the support of a team of colleagues to turn to, the role of their accountant becomes even more vital.
It is not simply as an extra person to shoulder some of the responsibilities of business that an accountant is important for the average contractor, there are very specific issues that come with a contractor’s territory, and advice pertinent to their style of working that only an accountant is qualified to give.
Tax questions such as how to approach IR35, can be very complicated and worrying for the average contractor, and as every contractor’s situation is different, these sorts of questions cannot simply be answered by a discussion with a colleague.
Although it is not necessary to choose an accountant that deals solely with contractors, it would certainly be helpful if the accountant you pick has a good deal of experience in this field; ask any accountants you are considering, if they have other contractors on their client list; they should be able to show an understanding of contract work by the language they use.
Ask how any potential accountant you have in your sights will deal with the IR35 question for you; they should give you an indication that they have something specific in place, a list of questions perhaps, and ask them to tell you a little about the legislation, they should leave you comfortable that it is a subject they have dealt with a lot and that they have a firm grasp of how it works. If you meet an accountant who suggests that IR35 is not something they get involved with or worse still that they can in someway make it so that it does not affect you, run in the opposite direction; IR35 cannot be manipulated, you are either affected by it or you are not.
Many contractors will have been asked to trade as a limited company by those they are contracting to; an accountant who is able to handle the set-up of your Limited company if you need them to, quickly and with a minimum of fuss is a safe bet, as they will probably deal with most things in a similar way.
The life of a contractor tends to be a very busy one, with little time to spare for extraneous accountancy meetings that do little other than add to your bill; if your prospective accountant is using state-of-the-art technology to look after clients, it is going to save you a lot of time and effort; ask how paperless their offices are, they may not have moved completely away from paper files, but if they seem to tend towards electronic communications and remote systems this is an indication that they probably prefer to streamline, a useful attitude for the busy contractor.
How to create referrals for your small business?
Accountants in Sheffield – Referral Marketing
Referrals are one of the easiest and fastest ways to grow a small business. Getting new clients through sales can be tedious, time consuming and a costly affair sometimes. Referral marketing can turn out to be the best marketing strategy for a business which wishes to build on its good reputation. Therefore, with the mind, how and where can you get referrals? Well the answer is pretty simple- from your past and present customers or clients.
Now, not every client can be a good referral candidate. You need to choose your best clients to do this job for you. So the first task should be to go through your customer list and choose your potential referrers wisely.
The reason why getting referrals from your past and present customers is so valuable and important, is because “Customers are not paid to Praise” most of the time. This means they will only recommend you to someone if they were really satisfied and happy with your product or service. The person they are referring will probably be aware of this fact as well and thus this will hopefully make you more credible to them.
So how do you generate referrals? After all, you can’t just sit and wait for your clients to recommend you. Well, here are a few of the many situations where you can promptly ask your client to refer you to someone they know who they think may be interested in your products or services:
- When the client is really happy with your work.
- When your current transaction is completed with the client.
- When the client comes back to you for repeat business.
Another way to get referrals is to keep in touch with your past and present clients. Just giving a friendly phone call once in a while should do the trick. This will also help the client to remember you and thus increases the chance of getting repeat business. Also when you pro-actively call them there is no harm in asking them for any referrals when the time feels right.
Another important point that would come in handy when dealing with referrals is to make sure that you show your appreciation to anyone that sends a referral your away. This form of thank you or appreciation can come in the form of something small like a thank you note/card or flowers. By making sure that you do this, it may mean that these customers who have already recommended you might do the same in the future. Lastly, as regards this point, you may even choose to pay a commission to any customers who give you a referral. However, this strategy needs to be weighed up to make sure that you do not undermine the positive effects of customers not being paid to praise.
In conclusion, referrals from past and current customers are often a great way to grow your business. However, even when you have been given referrals, the bigger challenge is to turn these referrals into actual paying customers. The best way to do this is gaining their trust and making them believe and understand that you can deliver the kind product or service which they are looking for. Growing your business through referral marketing not only saves you a lot of money, but it also boosts the reputation of your business. Remember word of mouth can sometimes spread like wildfire.
Paying Them as They Earn – A Brief Employer’s Guide to PAYE
Accountants in Sheffield – Employee Payroll Tax Deductions
If you have your own business and have reached a point when you can no longer do things alone, you will, no doubt, have entered the realm of the employer. You are now more than just a simple business owner responsible only for your own success and that of your venture; you now have other people’s fiscal health in your hands.
It is doubtful that your employees will have come to work for you through the goodness of their hearts, and so you are probably going to be paying them regularly for their services; having run the gauntlet of getting a decent staff member on board and agreeing a wage that suits everyone involved, you now have to look at the mechanics of paying them and as with so many of the tasks involving money performed by the average business owner, this one requires you to meet the needs of HMRC.
As an employer in the UK you are bound by law to operate the PAYE system when paying your staff. PAYE or ‘pay as you earn’ is how HMRC collect Income Tax and National Insurance contributions from employees. The clue is, of course, in the name, tax and NI are deducted from pay as it is earned, and as you are the one paying, you have, by law, to be the one deducting these charges.
It is important to pay the deductions to HMRC promptly each month (or quarter if you have made special arrangements) because late payment by employers can (and usually does) result in your having to pay interest (a fine by any other name…)
PAYE kicks in when your employees’ earnings reach the National Insurance LEL (Lower Earnings Limit); this is set at the beginning of each tax year, so, if you are unsure of what it is speak to your accountant and/or HMRC.
To work out how much to deduct from your employees’ pay you will need to use their tax code and NI category letter, information that will be found on their P45 form.
Employers must apply the PAYE system to everything paid to their employees as a consequence of their employment, including: salary or wages, overtime and tips, bonuses and commission, cash expenses, sick pay, maternity pay, shares and redundancy pay.
At the end of each tax year you will need to submit an Employer Annual Return (P35 and P14s) to HMRC; these forms summarize your payroll activity, allowing the Tax Man to confirm that the correct deductions were made and paid throughout the year.
Just because your payroll may be being administered by an outside agency or your accountant this does not absolve you of your PAYE responsibilities, it is important to check that the correct amounts are being deducted and paid, as it will not be your accountants that HMRC will hold liable in the event of these levies going unpaid; far too many employers view this as an area of taxation that they can hand over to someone else, but, just as with all else in your business, the buck certainly will stop with you.
Accountant Advice – Pricing Strategies for Your Business
Accountants in Sheffield – Pricing Your Products
Pricing is one of the major strategic challenges faced by any business, whether they are big or small. Ultimately, setting the right price for your product is one of the most important factors that will determine whether your business makes a profit or loss. The different pricing strategies available to a business can be divided in to two major categories. Those categories are:
- High Pricing Strategies
- Low Pricing Strategies
We can have a look at these strategies in more detail below.
High Pricing strategies
The following types of pricing strategies fall under this heading:
Creaming or skimming: This type of strategy involves selling a product at a high price and gaining maximum profit before any of the competitors make an entry into the market. This strategy is often used for new products which are innovative and have patent protection on them for a period of time.
Premium pricing: This strategy takes advantage of the general customer tendency to view low priced products in your chosen market place as being lower quality. It involves the practice of setting the price of your product higher than your competitors but offering a higher quality product. This strategy is used to boost the market reputation of the product you offer to customers. It is a strategy that is commonly used in the fashion and perfume industries where people are prepared to pay far higher prices for what they perceive as greater quality products. In this sense it tends to be well suited to products which have a strong brand name behind them.
Low Pricing Strategies
Low pricing strategies that are used are as follows:
Promotional Pricing: This tends to be a short-term pricing strategy adopted by a business where the price of the product is reduced for a certain period of time until the product gains popularity. One of the main aims when using this strategy is to gain increased market share.
Penetration Pricing: This is an entry level pricing strategy where the price of a product or service is set very low in order to undercut all the competitors and gain a foothold in the market.
Loss Leader: This is one of the smartest, yet very notorious, pricing strategies used by businesses. It involves selling a popular product at a very low price, usually at a nominal value below what it cost to produce. Once customers have acquired this ‘loss leader product’ they are then offered other products from the same business that will make a good profit, thereby negating the original loss. Offering a loss leader product is really a platform to acquire more customers quickly and then attempt to up-sell to them.
A few other factors that should be considered before deciding how to price your product or service are:
- Performing a market analysis and establishing what sort of demand there will be for your product or service.
- Performing a thorough costing of the product or service you are offering and looking at the breakeven point.
- Considering other external factors like legal constraints.
- Deciding on your main pricing objective e.g. more market share or exclusivity etc…
It is the intention of most businesses to make a good profit by adopting the correct pricing strategy, which suits their products and services and the demands of the customers. Deciding whether to choose a high or low pricing strategy needs careful consideration as they are very different and once you ‘plump for one’ it may be difficult to switch to the other type
Ways to Prevent Late Payments From Customers and Reduce Your Bad Debts
Accountants in Sheffield – Managing Your Accounts Receivable
Running a successful business sometimes requires a constant injection of funds, especially when it is growing. However, when your customers or clients start dodging the payment of your invoices this can lead to business cash flow problems and in extreme cases can lead to a business becoming insolvent. So here are a few basic measures one can take to help control your customers when it comes to paying you.
Payment agreements
This should be the first step before starting a relationship with any customer. Always sign an agreement with your customers stating that the payments will be received on time in order to avoid specified enforcement actions.
Advance Payment
Try to get payments by cash or post-dated cheques in advance from your customers. This might seem a little bit difficult, but the major benefit is that you will be relieved of any collection problems. Furthermore, advance payments will free up cash more quickly for you to use as working capital and in other areas of your business.
Credit checks
Avoid risks by running a credit check on your prospective client/customer. A credit check basically involves going through the records of a customer’s past borrowing and repayment history. This is normally conducted through the use of a credit- checking agent for a nominal fee. In short this is an easy way to identify a potentially ‘poor credit- worthy’ customer.
Provide Easy payment options
Rather than just accepting either cash or cheque payments from your customers, you may want to offer other easy electronic payment options to them. For instance, you can get them to pay by credit card or Paypal these days, assuming you gear your business up to use these facilities. Getting paid electronically saves you a lot of time and sometimes the money will show up in your bank account the same day the transfer was made..
Offering Discounts
Try motivating the customers to make their payments on time by offering small discounts for early or on-time payments. The discounts could be small percentage of the total due amount. Again this is a good strategy to keep the cash flowing in.
Levying interest on late payment
Yes you do have the right to levy interest on late payments, Make the customer aware of this legislation well in advance so as to avoid any dispute over it later on. If a customer is charged late payment interest once this may make them more prompt when making future payments.
Letter of Credit
This is a document usually provided by a financial institute giving a guarantee on behalf of the customer. It will generally state that if the customer is not able to pay the due amount in the stipulated time, you can claim the money from the guarantor who has issued the letter of credit.
The above collection strategies can be used on their own or in combination with each other. You may find that some suit your business more than others. They will hopefully help you free up any cash tied up in debtors and avoid any debts becoming bad and having to be written- off.