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management accountancy / 10 posts found

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8K – The Switzerland Structure

by mike tombs
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Week 3 of the 8 Key Drivers of Business Value: The Switzerland Structure A business' value requires that the business not be overly reliant on any one customer, employee or supplier. This is quite a big subject, so this is just a quick overview. Post a comment if you’d like anything expanded upon. How can we get more independence? With customers, the danger point is around 15% of sales. The simple answer is to get more customers – but it’s never that simple in reality. You can also have a look at any low-margin products you’re selling and dropping them. [...]

Should you invest?

by mike tombs
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For most of us in business the recent, and continuing, Brexit fiasco has meant that making meaningful investment decisions has proved to be problematic. What will our future trading relationship with Europe look like and how will that affect our own trading results? However, despite Brexit we still need to continue to operate and expand our businesses, which will require investment. It would be foolhardy to forget that in the UK we have an extremely generous tax allowance, aptly called the Annual Investment Allowance (AIA), that means we can write off the full cost of qualifying assets against our profits [...]

Don’t fall at the cash hurdle!

by mike tombs
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There is nothing more frustrating than watching a healthy, profitable business collapse due to cash flow problems. More profitable businesses fail for this reason than for any other. Don’t let yours be just another statistic. Cash flow problems come about when the gap between when your money comes into your account and when the money leaves your account becomes too large. This situation can be bought about by the bank changing their overdraft agreements, or a large customer suddenly defaulting on a payment, or simply a combination of bad luck and poor management. Different types of businesses are more at [...]

Know your numbers!

by mike tombs
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The problem with using generic Key Performance Indicators (or KPIs for short) is that all businesses are different. So the numbers that we need to understand to make better informed business decisions are different. The trick in optimizing the potential of cloud accounting reporting is in choosing which figures to look at. A good management accountant will make sure that you are basing your decisions on the correct set of figures, not on the wrong ones. The next part of this is to watch those figures, and see what they do, each week, every week. There is no point only [...]

Don’t look back!

by mike tombs
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One of the many quotes bandied around by people is: “don’t look back, you’re not going that way…” Like many clichés, this one contains a grain of truth, and never more so than when understanding the difference between financial and management accountancy. Financial accountancy is a simple record-keeping exercise that shows you a summary of what has happened in the previous year. It is used mainly by accountants to work out how much tax is due to HMRC. This process, filing your tax return and statutory accounts, and making any necessary payments, are a legal responsibility. Financial accounting is viewed [...]

Are you lonely?

by mike tombs
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Running a business can be a very lonely lifestyle. You probably went into business for a whole host of good reasons, and with a clear understanding of the problems that running your own business can bring you. But you might not have considered the loneliness. Endlessly making decisions by yourself, holding the sole responsibility for the consequences of those decisions can wear people down. This is not a sign of weakness, it is merely a reflection of the difficult nature of running a business. Every decision that you make will have a ripple effect of consequences. For example, the pound [...]

Are you on the cloud?

by mike tombs
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Making Tax Digital (MTD) comes into force on the 1st April 2019 (no – it’s not an April Fools!) If you are VAT registered and, your turnover exceeds £85000 you will need to follow the rules for MTD as laid out by HMRC. Essentially MTD means that you will need to keep and file your VAT records and returns electronically; you can no longer just use spreadsheets and manually upload the information. In practice this means you will have to be using some form of cloud accounting. Regardless of whether you want to or not, you will have to do [...]

Genuine confidence

by mike tombs
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There are countless blogs on confidence in business. How to stand, what colour suit to wear, how to speak, what tone and pitch of voice to use. Lots of these tips are brilliant and can really help you to present yourself in a better manner, with improved results. However, genuine confidence comes from knowing and understanding your business inside out. You can pull off the good outward presentation and gain clients that way, but true confidence comes from within. Knowing exactly what is happening in your business will give you an edge over your competitors. If you understand the mechanics [...]

Making the best of it

by mike tombs
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Many people regard paying their accountant as a necessary evil. Simply as something that has to be done, in order to tick the boxes laid out for us by the Government. But what if we change our thinking toward accountancy, what if we embrace something we have to do anyway, and turn it into a benefit, not simply a drain? We have to, by law, file our end of year accounts with HMRC. Most businesses pay an accountant to do this for them, in order to firstly ensure that it is correct, and also to optimise our tax position. This [...]