Record-keeping by Amy Taylor, BSc (Hons), ACA (aka @amyaccountant)

So you have just started up in business. Do you need to go out and buy an enormous filing cabinet to keep all the mountain of paperwork you are likely to be inundated with? Not necessarily.

HMRC guidance stipulates that you should keep your financial records for 6 years in case they ever come to investigate your tax return. In such circumstances, they would want to see the original records that went into the figures on your tax return. If you do not keep the records for the amount of time stipulated, you may have to pay a penalty.

You must keep the original documents for anything showing tax deductions, for example P60s, and bank statements, but for most other records you can keep them filed electronically, as long as they are legible and show all the information on the front and back of the documents. Such electronic files can be stored on CD, memory stick or any other suitable storage device. Thus removing the need for that enormous filing cabinet.

Examples of the types of records you need to keep to prove your income are items such as sales invoices, till rolls and paying-in slips. For expenditure, you should retain records such as receipts, purchase invoices and cheque book stubs.

If you are VAT registered you must also keep a VAT account, showing how you calculated the VAT due to or from HMRC, as well as VAT sales and purchase invoices and import and export documentation. If you are a limited company, you will also need to be able to show accounting records proving your assets and liabilities, as well as your income and expenditure. Your accountant will be able to help you with this.

There are further requirements for record-keeping if you are an employer, and these include all PAYE records, including employee benefits and statutory payments made.

Best practice is to reference every accounting record you keep to the relevant book of entry, so for example, your first item of expenditure for the year might be numbered 001, and you would then include this reference in the line of entry into your cash book and write it on the receipt itself. File each record numerically in a lever arch file or clear plastic wallet for smaller items so that they are easy to find in case of any query by suppliers or customers, or investigation by HMRC.

The HMRC penalty regime asks that taxpayers take reasonable care over their tax affairs, and in the event that you have made an error on your tax return, a clear filing system and helpful attitude to the investigators reduces the risk of a penalty.

If you would like any advice in this area or any other areas of accounting or tax, please contact me on 01767 260282 or amy@tayloraccountancy.net, www.tayloraccountancy.net. 

Follow Amy on Twitter @amyaccountant.

Amy Taylor Accountancy takes every care in preparing material to ensure that the content is accurate and up to date. However no responsibility for loss to any person acting or refraining from acting as a result of this material can be accepted by Amy Taylor Accountancy

Follow Friday Recommendation Friday 2nd April 2010

This week my follow Friday recommendations are for the people who are working with me on several new and exciting projects at the moment. All will become clear over time!

My first #FF is for @efficiencycoach, working with Heather has made so much difference to my business and to me.  The future is looking far rosier than I ever thought possible, and she is helping me make the transition from being self employed to running my own business.  She is in incredibly intelligent woman, of which I am reminded every time we have a conversation, and her humour and common sense keep me sane. I really look forward to our Skype chats each week.  If you are at or approaching a crossroads in either your career or your business don't hesitate to contact Heather, you will never look back.

My next #FF is @ReceiptAngel, working with Barry and Kay has not only introduced me to a fabulous product, but their support and friendship has meant a lot to me.  They are always eager and encouraging and again full of common sense.  Barry in particular has a habit of taking my ideas and stretching them, turning something simple into something so much more.  And of course how could I not love a couple who are so hugely supportive of the VA industry and have the same goals for it as I do!

Another #FF is @ShoegalSedgwick who is always so wonderful to talk to, it's lovely to talk to someone who is as enthusiastic about their business as I am about mine, and who sees the bigger picture and embraces collaboration as much as I do as well.  We have some interesting projects afoot with @Paula6thLevel who is such a lovely lady, and between us, working together, we are all going to have a fantastic future.  

@Paula6thLevel deserves her own #FF, my lovely friend is always cheery and full of humour, and we have such a laugh together it really doesn't feel like work.  Again she is so supportive of what I do, and when I recently got to meet her for real, was every bit as lovely as I had hoped, if not more.  I am working on some exciting new projects with her, and every time we talk we come up with yet  more ideas.

I must also give huge thanks to @sjabradley,my fellow VA, my voice of reason, my port in a storm and my buddy.  I am so lucky to be working with her, and she keeps me on the straight and narrow on those days when I really need it, and is one of the first people I call to celebrate good news.

I feel terrible for not mentioning everyone, there are so many people that I love to talk to on Twitter, who add value to my day, and make it such a wonderful place to be, but the page would go on forever if I did.  Please just know that if I interact with you on Twitter then I already feel you are worthy of a #ff of your own.  

End of Year - Guest Blog by Toni Hunter

The end of the tax year is a busy time for those administering the payroll function. There are a number of forms which need to be filed and it is a good time to check that you have been carrying out your payroll calculations correctly throughout the year and rectify any mistakes.

2009/10 is the first year that online filing is mandatory for all employers regardless of the size of the business. Paper filing of forms is no longer an option.

It has been mandatory for large employers to file their forms electronically for some time now but up to last year smaller employers still had the option to file in paper format should they choose to. Electronic filing has now become mandatory for the smaller employer too.

The deadlines which affect end of year payroll are summarised in the table below.

Late Payment of PAYE Penalties

Late payment penalties are being introduced from May 2010 if your PAYE is paid late. Currently interest is only charged when the final PAYE payment for the tax year is received either later than 19^th April for postal payments or arrives in HMRC’s bank account later than 22^nd April if paid electronically.

From May 2010 your PAYE payment will need to be received on time either each month or each quarter depending upon which basis you pay.  The new late payment penalties will apply to all employers and contractors that do not pay on time.

Details of the new penalties will not be sent out until April 2011 but will apply for the whole of the 2010-11 tax year. Penalties will start at 1% of the late amount and will increase to 4% depending upon how many times you pay late. You will not have to pay a penalty if only one payment is late unless it is more than six months late. Payments that are more than six months late may attract a penalty of 5% and a further 5% if still outstanding after more than twelve months.

Businesses will have to ensure that HMRC always receive their payment on time to avoid the penalties. Postal payments will need to be received by HMRC by the 19^th of the month. Electronic payments will need to be received in HMRC’s bank account by 22^nd of the month.

If you have any queries regarding the preparation of your payroll our in-house payroll bureau PayScheme will be happy to help. Contact a member of the team on 01767 220199.

Follow Friday Recommendation Friday 26th March 2010

Well, yet another take on a Follow Friday blog from me this week. Instead of me writing the blog I have asked the person I am recommending to write a blog for a change.

I love tweeting with @MissRosieDay, she has a fantastic sense of humour, manages to look after an enormous family, and is just a great person to interact with, as well as being a talented writer.She is also doing some amazing charity work with Project65 as well, and is soon to undertake a mammoth walk in order to raise funds for them.

I have had the pleasure of talking to her on the phone on several occasions over the past few weeks and we have had some great conversations about our respective businesses and we have shared a lot of laughs as well.

Rosie made a comment on the phone and I couldn't help pointing her in the direction of Evernote, some software I thought would help her out. It worked excellently for her and she even managed to show me a new use for it I hadn't come across. Then I introduced her to Tungle, another piece of software which she embraced, and finally I introduced her to the joy of Capsule CRM

She was joking that I had finally got her organised so I asked her to write a blog for us on what that felt like, and here it is:

Guest Blog from @MissRosieDay

I am a writer, that's not my job title, that is who I am.  I cant remember a time when I did not write, from childhood I have recorded the world around me through stories and poetry.  I love words, I love the way that the pictures in my head become organised sentences on the page, but sadly that is where my organisation ends.  I make notes on scraps of paper and keep a track of things in my head, which on occasions gets me into trouble.  I have, until now, never let this worry me, I call it my artistic temperament! Recently two things have hit me almost simultaneously.  The first was a change in direction and the second was meeting Helen.  So, firstly I will address the reason for a career change.  Before I left the rat race, I worked in business, where I was actually very efficient and productive, but I had staff to take care of the day to day organisation.  Then 2 years ago events in my personal life forced me to re-think my priorities.  I gave up the salary, the financial packages, the company car and became a full time writer.  I work from home and don't miss all those things, I am happy and my children are happy to see more of me.  It has taken a lot of hard work but my writing career has taken off in many directions and has given me a great many contacts.  It is sadly the case that freelance writers are finding the current market very difficult.  Commissions are hard to come by and those that are on offer are at a fee far less than those of just 18 months ago.  Therefore freelancers are all diversifying, including me and I suspect a great many people in other industries.  With the aforementioned contacts and my previous business experience, it has made sense to take a sideways step into PR & Marketing. That's where Helen comes in, as an existing Twitter friend, she jumped on my tweets concerning my new business and lack of organisation and offered help to bring me up to date.  Her help and advice has been invaluable.  Working from home as a writer and working from home as a Professional providing a service are worlds apart.  A writers life is very solitary, working pretty much to my own deadlines.  In my new business I have to be far more polished, I have to make my clients feel special and confident in my abilities.  I have to be organised.  I am asking people to trust me and that trust has to be earned, missing a deadline or not calling at a pre-arranged time are not an option. Organisation is not rocket science and there are so many people and online services that can help.  My advice is to be honest with yourself about the things that you are not so good at.  Seek help, a virtual PA is ideal.  By taking away the worry of these things you can concentrate on the things that you are good at, you will become more productive and your business will become more profitable, thus absorbing the cost of your help!

Not Just A Newsletter - Guest Blog by Matt Chatterley

Not Just a Newsletter..

Keep your eyes peeled as you navigate the web and you'll soon realise that almost every single website has a Newsletter which they'd love you to join. This cycle is self perpetuating - when creating a website for your venture, you know everyone else has one - so you have to have one too!

Before you dive right in, stop and think! There are several basic questions which are very useful in this situation (in truth there are more, but these five apply particularly well to Newsletters). If you can't answer them all satisfactorily then perhaps you should wait until you can before forging ahead.

I'll share my answers (on behalf of Mattched IT) with you - and try to give you some pointers to help you to reach your own conclusions.

WHO - do you want to subscribe to your Newsletter?

Our target audience is primarily small business owners (notionally extending to senior managers in larger enterprises) - people who are the "IT decision makers" in their organisations and to whom we can advertise and sell our products and services.

You may find you want to run a newsletter for a different demographic to your default customer base - you may even want to partition your newsletter list and send different messages to different people. Ultimately the key reasons tend to be Sales/Marketing related or to increase the level of engagement and communication which is sustained with clients.

WHY - should they sign up?

Because they've seen our website (or engaged with us via social media - Twitter, Facebook, LinkedIn) and want us to keep them updated on new products/services which we launch as well (or changes to existing services). Occasionally we also offer discounts or other promotions exclusively to Newsletter subscribers.

I often feel that the incentives for joining our newsletter are quite weak, if I am honest. Partly because of the nature of our business - which is service orientated - as well as nature of the services we offer - which very rarely change. It's likely to be very different for you, depending on what you do. If you update your products regularly then you've got a killer reason right there - they can be the first to find out when you start selling widgets in blue as well as red!

WHAT - is in it for me?

Increased engagement with the audience, and the opportunity to periodically remind them that we are here, and that we can help them should they be facing any challenges in the IT department. We also try to encourage our subscribers to forward our newsletters on to their friends and colleagues if they feel the content might be of interest.

There must be a clear benefit to your business for it to be truly worthwhile running a newsletter. If you sell a tangible product then your newsletter can be a very exciting and powerful tool - it's an opt-in list which you can market to, as long as you are sensible and courteous when doing so. Otherwise you may have to look closer to find a good reason!

WHEN - are you going to send Newsletters?

We aim to send one each month, although we do occasionally skip an edition if there is absolutely nothing to report. Mainly because I personally believe it's somewhat frivolous to use our client’s time reading a message - when really we have nothing to say to them - and certainly nothing of value to offer.

It's key that you don't send newsletters out too often. Your unsubscribe rate will tell you immediately if you're too vocal - because it'll be high! People are accustomed to once a month, but that doesn't mean you can't send them out bi-monthly or even fortnightly if it is appropriate for your audience.

Don't save up a colossal amount of information and send out a novel once a month if really you could be sending out relevant messages which have meaning and value to your subscribers on a weekly basis - there is a limit to how much information people can (and want to) absorb in one go!

HOW - are you going to manage your email list and newsletters?

We use MailChimp. It's great - and has a brilliant free trial, too. This lets us manage our lists through a handy user interface, use their API to automatically add subscribers from our website (we can easily integrate yours too, if you like) - and means that we don't have to worry as much about making sure people have opted in, legal requirements and handling bad addresses which get onto the list. The reports have just the right amount of information to help maximise performance too.

Enough of selling someone else’s product! My point is that you probably don't want to just keep a list in a text file - there are strict requirements you need to follow under various pieces of legislation (not least of all the Data Protection Act) - and if nothing else you need to exercise the same due diligence that you do in all the other areas of your business. Plus you need the tools available to work out what happens when you send a message and to help you make the most of your list.

And where does that leave us?

Put plainly, a newsletter can be an enormously powerful business tool and can be hugely beneficial to both you and your clients if used properly. But if used poorly or badly implemented/managed, it'll achieve very little apart from using up your precious time. Remember - failing to plan is planning to fail!

Matt Chatterley

Director - Mattched IT

Mattched IT offer a wide range of Web Design, Web Development and Search Engine Optimisation services tailored to meet your needs and requirements.

What did we do before Technology?

I sat and wrote this blog with good old pen and paper. Why? Because I took my lovely shiny netbook, with an 8 hour battery, along with me when I took small child for her swimming lesson last week so I could catch up on some work.  And because I failed to check that lovely shiny netbook with an 8 hour battery actually had any charge in it before I left the house!

It got me thinking, how did we ever cope without the gadgets that we have today, and have they really made my life better?

I grew up in the age of the Spectrum ZX, the BBC, the Acorn and the Commodore 64.  Printers were only found in offices and then they were the old multi-sheet lined paper feed dot matrix printers.  The first computer I used at work was Windows 386.

Programmes like Word weren’t in every office, we didn’t have access to the internet, not that I am sure I had heard of it then, and I had never heard of email.

Mobile phones were only for yuppies, and came with a battery pack larger than my handbag.

Do I miss those days? Not in the slightest.  I fully embrace technology and all that it means to me. I make my living from this virtual world and I would not be without it.

I work online, I shop online and I socialise online.

Thanks to the wonders of the digital technology I have masses of photos of my beautiful daughter, and can share them online with friends and relatives around the world.  I can take two or three photos to ensure that I get the shot that is just right for me, no more waiting till the film comes back to realise that small child was sticking her tongue out, no more counting how many flashes were left on the flash bar, or how many shots were left on the film.

I can talk via Skype video with colleagues, clients and family and friends around the world.

I can use the resources of the internet to find the perfect family holiday, to figure out what small child’s maths homework actually means, and I can sit back in wonderment as my daughter researches the current topic at school, then writes up her report on Textease.

Thanks to the Nintendo Wii I have watched three generations of family laugh and play together from age 7 to 75, and have been pleasantly surprised at the interest it has re-kindled in the less active of us in exercise.  Anything that makes exercise feel like you are playing a game wins in my book, though I have to say, watch out for those wii related sports injuries, they hurt as much as the real thing!

Whilst there are things that are anti social about technology, there are many advantages as well.  Used in balance it eases workloads, improves communication, generates knowledge and makes life sweeter and easier. 

I have made friends, learned new things and broadened my horizons all thanks to the internet and the technology that allows me to use it, from my laptop, my netbook and my mobile phone.  It has also allowed me to win an argument occasionally as I googled the answer to some silly question, just to prove I was right.  Not to mention it is perfect for when small child comes out with her latest curiosity - "Mummy why do nettles sting, what makes them do it?" Good old google to the rescue.

For someone who wasn’t the first to get a mobile, a home PC or a PDA, I am now at a loss without them.  I crave access to my social network, email and internet when I am deprived of my wireless connection.  Today I sat in a broken down car for over an hour waiting for a recovery truck. Thankfully, between my laptop and my mobile broadband I didn’t waste that hour but spent it productively instead. 

So do you embrace technology or do you wish for the good old days? Your comments are welcomed.

How to successfully work from home - Guest Blog by Heather Townsend

How to successfully work from home

Whether you are a start-up business, kitchen table entrepreneur, home worker or sole practitioner, your first office space is normally situated at home. After a nearly a year of a ten second commute, I admit the novelty of working from home is starting to wear a little thin.

Here are my thoughts on how to make working from home work for you.

Create a dedicated work space.

It doesn’t need to be anything as formal as a home office – although if you can do this, then great – but a space that is dedicated to your work. A dedicated workspace helps you to separate the two halves of your life – home life and work life. If you have young children, then having a work area that you can physically shut away is a must!

Create boundaries

When you start to work from home, the boundaries of work life and home life get very blurred. From personal experience, I know it can be very hard to switch off at the end of the day, and let my work seep into my quality time with my family. It takes discipline to keep home and business life separate – but as time goes on, it becomes essential to create that boundary.

Plan your day

It’s very easy to waste time when you are working on your own at home. When you finish for the day, make a list of what you need to achieve for the next day. This will help you mentally switch off at the end of your working day, and be ready and focused for what needs to happen when you start work in the morning.

Set expectations with your family

When I first started working from home, my husband thought that I could do all the housework while I was meant to be working. He also thought that on my ‘working days’ I could look after the children while he went to the gym. We knocked those ones on the head pretty quickly! Don’t muddle up your domestic chores and your business work. Set separate times to do your housework –and gain the commitment of your family to this new regime.

Put some structure in your day

Whilst you may love not having to get up every morning to go into the office, it is important to put some structure in your day. By this I mean, a time when you intend to be at your desk and a time when you will stop working. This will help you separate your work and home life – and help the people around you get used to your new routine.

Seek out people

Particularly if you are an extrovert, you will need people around you. Balance your times in the office with the quieter times in your household. Go out networking during the week so that you can meet people.

Keep your home and office tidy

At some point you will have some work people visiting your home. Make sure you keep your workspace tidy and free of domestic clutter, so that any visitors to your home office wouldn’t be alarmed at your untidy house.

Install a business phone line

If you can afford it, use a business answering service. I have found to my cost that my husband is a lousy receptionist and tends to forget to write down messages. An answer phone is an OK solution – but 8/10 people don’t leave a message on a voicemail. Can you afford to miss a potential new business enquiry?

Heather Townsend

The Efficiency Coach

Find out more about The Efficiency Coach and sign-up for her monthly newsletter & fortnightly efficiency tip

Find out more about The Executive Village

Get ideas & inspiration to achieve more