Here is a list of some key business risks:

• The risk of running out of cash
• Over reliance on anyone, You, key Staff, Customers or Suppliers
• Is there a partnership or shareholders agreement in place?
• Is there an IT strategy and does it cater for all IT developments?

This list isn’t exhaustive by any means but it can be a good start so why not spend an hour this week looking at the risks in your business and produce a plan to help combat them.

I appreciate that you haven’t always got the time to spend working on your business and this is where we can help.

We are more than just accountants and we have a range of services, listed on our additional services pages, that can help your business.

If you are in the process of closing down your company, or are thinking of doing so, you need to know about the change in the tax law from 1 March 2012.

If your company contains significant value, you will want to extract the cash and assets in the most tax efficient manner. Until now you could ask the Taxman to apply concession C16 to the payments made during an informal winding-up up of the company. Concession C16 allows the payments made to shareholders (known as distributions) to be taxed as capital gains. Shareholders who were also officers or employees of the company may be able to claim entrepreneurs’ relief on those gains, which means the gain is taxed at just 10%.

Concession C16 is generally granted when the company has paid all its creditors, including the Taxman, and the owners promise not to start-up the same business in a different company. Concession C16 will cease to apply from 1 March 2012, and will be replaced by a new law as follows:

- Where the distributions are more than £25,000 in total, all those distributions will be subject to income tax (at rates of 25% or 36.11%), in the hands of the shareholders.

- Where the total value of the distributions to the shareholders of the company is no more than £25,000, the entire amount will be taxed as capital gains (at 10% where entrepreneurs’ relief applies, or at 18% or 28% otherwise).

- Payments made as part of an informal winding-up on or after 1 March 2012, will be subject to the new law even if permission to use concession C16 was previously given.

- It doesn’t matter on what date the company is finally dissolved or struck-off, it is the date on which the distribution is made that counts.

If your company holds significant value and you want to close it down, you can opt to use a formal liquidation. This will allow all the distributions to be treated as capital gains and for the lower tax rates to apply. However, a registered liquidator may charge a fee of £5000 or more to undertake the liquidation.

PAYE and other payroll deductions need to clear Taxman’s bank account by 19th of the month, if paid by cheque. Electronic payments can arrive by 22nd of the month, or the last banking day before that date.

If you use the faster payments service (FPS) to make your PAYE payment, the amount transferred will clear the Taxman’s bank account the same or next day. However, there are limits on the amounts that can be transferred per day and per transaction using FPS, which vary from bank to bank. So check what limit your bank applies.

Late payments of PAYE will result in an automatic penalty of up to 4% of the PAYE that was paid late. You are permitted to make one late payment of PAYE during the tax year, but two or more late payments will mean that a penalty will be charged after the end of the year.

In addition, if you have still not paid after six months you may have to pay a further penalty of 5 per cent. A further penalty of 5 per cent may be charged if you have not paid after 12 months. These apply where only one payment in the tax year is late.

The Taxman has already issued many penalties for late payment of PAYE in 2010/11, and some of these penalties have been calculated incorrectly. If you receive a penalty notice, please ask us to check it as soon as it arrives. Any appeal must be submitted within 30 days.

We are members at the Wrotham Business Over Breakfast Networking club (BOB).

BoB Clubs creates a secure and successful networking environment for members to cooperate and exchange referrals.  Members actively seek and create opportunities for each other.

You and your business will thrive during your professionally structured meetings where you feel welcome, trusted and respected, whilst building confidence and potential business and profits.

You are encouraged to focus on quality referrals, not quantity, leaving you free to network without any undue pressure.

Constant support is on hand to help you save time, earn more money and beat your competition.

If you would like to come along as a guest please give me a call on Tel: 01622 671 835.

If your business is registered for VAT in the UK and you sell to VAT registered customers in other EU countries you are required to submit an EC sales list (known as ECSL or form VAT 101), to HMRC. If you move your own goods to a branch or subsidiary of your business in another EU country, you may also have to complete an ECSL for that period.

The ECSL is generally submitted quarterly, but businesses that export goods totalling more than £35,000 (excluding VAT) per quarter must complete an ECSL every month. If your business only sells services to other EU countries you can continue to submit a quarterly ECSL, but you can opt to submit monthly ECSL forms.

When you complete box 8 on your VAT return, the Tax Office will automatically send you an ECSL form to complete. The paper ECSL form must be submitted within 14 days of the end of the reporting period. You can complete the ECSL online, in which case you have 21 days from the end of the period to submit the form. Note that this deadline is well before the deadline for your regular quarterly VAT return.

We can help you submit ECSL forms, either on paper or online. Talk to us about the work involved.

When we set up our accountancy service we asked ourselves a few key questions:

• Why should a pro-active accountancy service cost the earth?
• Why should there be uncertainty over the amount you pay for your accounts?
• Why shouldn’t our clients get more from their accountants?

We couldn’t see a good reason not to change the way we approached offering our services so we came up with our entry level accounting service, Compliance, which starts at just £49 + VAT a month.

This fixed fee service includes Accounts, All Tax Returns including Personal Tax, Annual Returns and Telephone support.

If you want more then our Compliance Plus Service stating at just £99 + VAT a month includes our promotional activities where we actively promote your business online via the Accsys Referral Network.

Finally we have created a host of additional services to help your business whether its Payroll, Bookkeeping or our range of Business Improvement Services we are here to help.

Q. What records do I need to keep to claim travelling expenses? Do I also need to keep receipts for petrol?

A. You should record the date, destination and distance of each business journey you drive in your own car. It is good practice to record the total on your car’s milometer at the start and end of each journey. Your employer can pay you up to 45p per mile for each business related journey you drive. Business journeys do not include normal commuting between your home and your permanent workplace. If your employer is VAT registered it will be able to reclaim VAT on part of the mileage allowance you receive, if you provide VAT receipts to the value of the fuel used. The VAT receipts do not have to exactly match the dates of your journeys. When travelling by public transport keep the receipt for the ticket.

Q. I’ve always calculated my business income for a full year to 30 April. On my tax return for 2010/11 I’ve recorded my business profits, income and expenses for the year to 30 April 2010. But when I rang the Tax Office with a query the adviser told me that my accounts should always be drawn up to 5 April. Have I been doing it wrong for 20 years?

A. The adviser at the tax office is wrong. You can draw up your business accounts to any date you please. The year end of 30 April gives you a long delay between the end of your accounting year and the date on which you need to pay tax on the profits for that period.

Q. A friend told me I’d pay less tax if I held my let properties through a company. Is that true?

A. The answer depends on whether you need to get your hands on the proceeds from your lettings business and your current highest tax rate. Let’s assume you need the cash and your highest tax rate is 40%.

If the properties are in a company, the company will probably pay tax at 20% on the rental profits. But its tax rate could be up to 27.5% if the annual profits exceed £300,000, or you control a number of companies. When you extract the profits from the company as dividends you will pay a further 25% income tax. So for rental profits of £100, you will end up with £60 in your hands.

If you hold the properties personally, and pay tax at 40%, for every £100 of rental profits you will receive £60 in your hands. No different to holding the properties in a company. However, if you had not extracted the profits from the company until a later year when you are a basic rate tax payer you would then be paying less tax. It can also be beneficial to keep the profits in the company to re-invest in further properties. The company may pay tax of 20% on the gain it makes when it sells the let properties. If you sell the properties you will probably pay tax at 28%, but you will be able to set-off a tax-free allowance of £10,600 against the gain, which is not available to the company. You may have to also pay further tax when extracting the profits out of the company.

2 – Last day for car change notifications in the quarter to 5 January – Use P46 Car

19/22 – PAYE/NIC and CIS deductions due for month to 5/2/2012

29 – Talk to us about year end and pre-budget planning

First 5% penalty surcharge on any 2010/11 outstanding tax due on 31 January 2012 still unpaid

The check list is designed to cover most of the routine items that the small and medium size business owner should be looking out for. There are often more ideas that a pro-active accountant can come up with so please talk to us about your own personal circumstances.

The check list should take no more than 20 minutes to complete. You can then arrange to meet with us in person to go through any areas where tax saving opportunities have possibly been identified.

Click Here to download our Tax-Busting Checklist

RTI is a new way of submitting payroll data to the Tax Office. Instead of sending the PAYE information in annually after the end of the tax year, all employers will have to submit the payroll data on-line on every occasion the payroll is run.

This will allow the Taxman to understand who is being paid what amounts, and what PAYE is due, on a real-time basis. The details of employees’ pay will be passed to the Department for Work & Pensions, to allow the amount of Universal Credits (which are replacing Tax Credits from October 2013) paid to workers to be adjusted on a monthly basis.

RTI will be compulsory for all employers and pension providers by October 2013.Before payroll data can be accepted under the RTI system it must be ‘clean’.

That means having an accurate date of birth, full official name (not just initials or nick-name) and correct National Insurance number, for each and every employee. If the data for one of your employees does not agree to that on the Tax Office computer, the submission of the payroll data under RTI may fail, and you may get fined.It will take some time to check the details of every employee on a large payroll, so it would be best to start this task as soon as possible.

If you use our cost effective Payroll solution we will ensure you are fully compliant. If you are still running your own payroll then why not let us do it at just £3.50 per payslip with no hidden extras it makes sense to outsource.

Online VAT Filing Compulsory

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Are you already filing your VAT returns online? If not, then you need to prepare to switch to online filing as this will be compulsory for all VAT registered businesses from 1 April 2012. Don’t leave this task until the last minute as it can take a few weeks to receive the unique user ID you need from the Tax Office.

You will also have to create a password and set up a system to pay the VAT you owe.You will no longer be able to pay the VAT due by cheque. You have to pay by electronic means. This includes using a direct debit, bank-transfer such as CHAPS or BACS, a personalised bank giro payment slip paid in at a bank (these need to be ordered in advance), or a debit card or credit card over the internet.The good news is that Tax Office has now instructed its bank to accept tax payments by the faster payment service. This means the tax or VAT due will take less than a day to clear from your account to the Taxman’s bank account.

Before relying on this shorter timescale, check whether your bank account is set-up to use the faster payment service and if any money limits apply. Many bank accounts can only pay out up to £10,000 by electronic payments in one day.

If your VAT bill exceeds that cap you may have to spread the payment over several days, or talk to your bank about other transfer methods.We can file your VAT electronically on your behalf once you have completed the necessary authority forms from HMRC.

We will also require all your VAT information in good time before the due date for the VAT return, so we can calculate the VAT due and tell you what to pay to ensure the return and payment is received by HMRC before the deadline.

The Taxman has formed a number of task forces to investigate certain business sectors, where he believes tax rules are being ignored.A summary of the current work of those task forces is listed below, but bear in mind that each task force will move on to a new geographical area once the first area has been investigated.

London Properties

This task force is investigating commercial property deals in Greater London, where the VAT rules may not have been applied correctly. Where they find such a case, the tax officers will review the entire tax compliance of the property owner, across all taxes

Landlords

HMRC are targeting landlords with three or more let properties in the North West of England and North Wales. Have you or your family correctly declared all of your rental income?

Construction Industry

The targets are self-employed builders (including small companies) in the North West of England and North Wales. The task force is looking for under-declared sales (such as cash jobs) and over-claimed expenses (where there are no supporting invoices). Remember to keep every receipt for purchases and keep a log of all business mileage. We can help you by advising what expenses are allowable to claim against your income.

No Tax Return Submitted

This task force is currently operating in the South East of England, looking for businesses who have not submitted tax returns for corporation tax, VAT, PAYE or income tax.

Tax rates and thresholds for 2012/13 have been announced as follows:

Income Tax Personal Allowances

Under 65: £8,105

65-75: £10,500

75 and over: £10,660

Minimum marriage allowance: £2,960

Maximum marriage allowance: £7,705

Blind person’s allowance: £2,100

Income limit for those aged 65 or more: £25,400

Income limit for under 65 personal allowance: £100,000

Income Tax Rates

Savings rate* (10%): £0 – 2,710

Basic rate (20%): £0 – 34,370

Higher rate (40%): £34,371 to 150,000

Additional rate (50%): Over £150,000

* Rate does not apply where other income exceeds the savings rate threshold.

Different tax rates apply for dividend income as follows:

Basic rate (10%): £0 – 34,370

Higher rate (32.5%): £34,371 to 150,000

Additional rate (42.5%): Over £150,000

NI

The rates and weekly thresholds for NI contributions will be:

Employer’s class 1 above primary threshold (above £144): 13.8%

Employee’s class 1 not contracted out (from £146 to £817): 12%

Employee’s additional class 1 (above £817): 2%

Self-employed class 4 (annual figures from £7,605 to £42,475): 9%

Self-employed class 4 additional rate (above £42,475 per year): 2%

Self-employed class 2: £2.65 per week

Voluntary contributions class 3: £13.25 per week

Capital Gains Tax

Tax rates for individuals

Up to basic rate band: 18%

Above basic rate band: 28%

Annual exemption: £10,600

Corporation Tax

From 1 April 2012:

Profit of £0 – £300,000: 20%

Profit of £300,000- £1,500,000: 26.25%

Profit of £1,500,000 and over: 25%

These rates apply where there are no associated companies.

A. If permission is granted from the Taxman in advance (called a C16 clearance), the funds the company distributes to the shareholders during the winding-up process will be treated as a capital gain and taxed at 10% where entrepreneurs’ relief applies.

However, the law will change on 1 March 2012. From that date where more than £25,000 is distributed to shareholders in anticipation of the winding-up of the company, the entire amount of the distributed funds will be treated as income and taxed like dividends. That means entrepreneurs’ relief cannot apply and the rate of tax due on the distribution will leap from 10% to 25% or more. The capital gains treatment can still be achieved if the company is put into formal liquidation, but that is likely to cost £7,000 or more. So if you want to wind-up your company and it holds more than £25,000, get those funds paid out by 1 March 2012.

Q. My energy bills have soared since I started using a room in my home as the base for my company’s business, as I have to have the heating on all the time. I’ve heard that my company can pay up to 1/3 of my gas bills tax-free, is that true?

A. Your company can pay you (as the company’s employee) £3 per week, £156 per year tax free, for working at home and no evidence has to be provided to support that payment.

If you can prove your heating bills increased because you heating the property while working there, when otherwise it would be empty and not heated, then your company can pay that extra heating cost to you tax free. However, if the Taxman asks you will need to provide copies of the gas bills for a period before you worked at home compared to a similar period when you have worked at home, to prove the increase in costs. The Taxman may also want to see a schedule of the days you work at home and days when you work at clients’ premises. This type of claim is referred to as ‘use of home as office’ which can also cover other costs incurred in running your business from home. Contact us for further guidance.

Q. I received a letter yesterday addressed to my new company, asking for a payment of £320 to register the company on the ‘Intercom VAT Registry’. Should I pay this fee? Is it compulsory?

A. Do not make any payment or respond to this letter. It is a known scam. The ‘Intercom VAT Registry’ does not exist and it is not an official EU body as the letter suggests. If you are ever suspicious about letters or emails your business receives, check them against the list of known fraud on the Action Fraud website: http://www.actionfraud.org.uk/. We are more than happy to check any suspicious correspondence you receive, so contact us if you are unsure of the legitimacy of any letters or emails sent to you.

We are proud to be the accountants for Able Canopies Limited.

They have grown over the last few years from a local business based in Essex to a national company with four regional offices employing 60 staff.

We have been there at every step of the way providing support and guidance from help with Management Accounts and Pricing to implementation of their systems,  helping them achieve ISO9001 and opening their additional offices.

Able Canopies use our Business Adviser Service which has helped them manage the growth they have experienced.

Business Adviser is the ultimate aid in growing your business. It implements proven strategies to help your business achieve its full potential

This isn’t for every business you must be ready for growth and ready for our help to achieve the results. Because getting the finances right is fundamental, our Financial Controller service is included but the Business Adviser service goes much further, it helps achieve the growth your business is ready for.

This service is to help turn your business ambitions into a reality.

It starts with our business review programme that creates an action plan for the whole business. Then we go to work on the business.

What’s included?

• All annual compliance requirements completed by an agreed date within an agreed budget.
• Annual Financial Statements.
• Tax Returns (Corporation, PAYE, Self-Assessment as necessary)
• Our 100% never miss a deadline guarantee (Tax, accounts, Payroll etc)
• Compliance work can create opportunities especially in the tax
  planning area, we can provide options for you and clearly outline each
  one;
• We can also make suggestions for your business to assist you to gain the best possible tax situation.
• Meet every month to discuss your progress
• A telephone call at least once a month to keep track of progress
• Unlimited calls and emails

With additional financial control:

• Advice on cash flow and how to track cash.
• Advice on credit control how to ensure you collect 100% of your money.
• Advice on pricing your services.
• Preparation of financial forecasts
• Help with identifying your KPi’s
• Business re-organisation ensure your business is organised in the correct way.
• A regular newsletter to keep you up to date on all relevant tax and business issues.

Building your business by:

• A strategic review of the business to create a plan of where you are going and how you are going to get there.
• Business re-organisation ensure your business is organised in the correct way
• Preparation of a financial plan for the business
• Preparation of a marketing strategy including SEO advice
• Consultation with an IFA to discuss your personal situation
• Review of your business systems and processes and starting to map them
• Review of your sales process
• Review and planning of your HR processes
• Use of Accsys Tool Kit – spread sheets for Pricing, tracking, cash flow and many many more

Promote your business with:

• An enhanced Google friendly listing on our business directory
• Membership to our referral network
• Inclusion in our social media promotion plan

Business Adviser starts from £399 plus VAT per month.

1 – Due date for payment of Corporation Tax for the year ended 31 March 2011

14 – Return and payment of CT61 tax due for quarter to 31 December 2011

19/22 – PAYE/NIC and CIS deductions due for month to 5/1/2012 or quarter 3 of 2011/12 for small employers

31 – Deadline for filing 2011 Self Assessment personal, partnership and trust Tax Returns – £100 first penalty for late filing even if no tax is due or tax due is paid on time.

Balancing self assessment payment due for 2010/11.

Capital gains tax payment due for 2010/11.

First self assessment payment on account due for 2011/12.

Interest accrues on all late payments.

Half yearly Class 2 NIC payment due.

Plus you will get these benefits:

1. Your fee will be genuinely fixed and spread over 12-months. We don’t work on timesheets so we guarantee not to issue an unexpected invoice over and above your monthly fee.
2. Our services come with unlimited email and telephone support so you can call us at any time to discuss any matter without incurring extra fees.
3. We are interested in what goes on in your business and routinely give advice on pricing, ca sh flow and organising the business.
4. You get to take full advantage of our Referral Network which promotes our clients on LinkedIn, Twitter, Facebook and our on-line business directory www.accsysnetwork.co.uk. We actively look for business opportunities for your business.

This offer is not open to personal tax only and payroll only clients. It can only be used where there is a genuine commercial relationship with an accountant. So if a family member does your accounts for a favour we can’t help …sorry.

If you wish to find out more visit www.accsysltd.co.uk/save25/ or call us on 01622 671 835 to arrange a free no obligation meeting.

Businesses who occupy small commercial premises receive some generosity with an extension to the business rates relief scheme to 1 April 2013 (already extended for a year to 1 October 2012). Different business rates relief schemes apply in England, Wales and Scotland so ask your local authority what relief applies to your building. Occupiers of larger business premises may be able to defer payment of up to 60% of the increase in business rates for up to two years.

Other key tax announcements for businesses and individuals were:

1. New anti-avoidance rules for employer asset backed pension contributions, effective from 29 November 2011.
2. State pension age rises to 67, to be phased in over two years from April 2026.
3. Freeze in the couple and lone parent elements of working tax credit in 2012/13.
4. No increase in child tax credit above the rate of inflation, as had been announced.
5. Capital gains exemption to be frozen for 2012/13.
6. Research & Development tax credit for larger companies given above the profit line rather than as a tax reduction, to apply from 2013.
7. New Seed Enterprise Investment Scheme (SEIS) from April 2012, giving income tax relief of 50% for investments of up to £100,000 in start-up businesses.
8. Exemption from CGT when gains realised in 2012/13 are reinvested under SEIS in the same tax year.
9. 100% capital allowances in certain new Enterprise Zones, not in all zones.
10. Main rate of corporation tax will reduce to 25% from April 2012.

Further detail on the new tax rules and rates will be announced on 6 December 2011, so we will cover any significant items for small businesses in our January 2012 newsletter.

You could save time, hassle, and VAT in some limited circumstances, by asking the Tax Office to treat all your companies as one VAT group. You then only have to complete one VAT return for the VAT group, instead of one return for each company, and pay one amount of VAT over to HMRC. Also the transactions between the companies that are within the VAT group are generally ignored for VAT purposes. There are exceptions for certain international services.

The companies within the VAT group don’t have to carry on similar trades, they can operate in quite different business sectors. However, where some companies regularly receive VAT refunds and others pay VAT each quarter, it would not be sensible to put those payment and repayment companies together in one VAT group. Also, once the companies are together in one VAT group the limits for various VAT reliefs, such as ca sh accounting, error reporting, or partial exemption, apply to the turnover of the whole group.

An LLP can join a VAT group with a company, if both bodies are under common control. This can be useful where an LLP has been used in place of another associated company (an additional associated company may increase the corporation tax rate paid by the main trading company). A general partnership, which is not an LLP, cannot join in a VAT group under any circumstances.

Call 01622 671 835 or email will@accsysltd.co.uk to find out more.

Our exclusive clients promotional activities include:

1.  Twitter – We have a twitter schedule for clients and will post news, links and information to our 250 followers regularly. See http://twitter.com/accsysacctants
2.  Our blog – we will post your news on our blog. Email me articles, news and offers and we will post them.
3.  Our email newsletter currently with 600+ subscribers – include your news on our newsletter.
4.  The Accsys Referral Network which is  primarily designed to recognise, create, or act upon business opportunities.

• The Network consist of an online business directory www.accsysnetwork.co.uk which provides a SEO optimised link to your website with business descriptions. Clients get a featured listing worth £250 for FREE.
• A face book page where you can post your information, offers and advice. http://www.facebook.com/pages/Accsys-Referral-Network/184700498282516
• A network newsletter sent once a month with promotions and offers for your business

Now it seems we are at the other extreme, we almost have information over load. I just Googled “starting a business” and it came back with 18,700,000 results.

Top of the list was Business Link and HMRC which, admittedly, are probably two of the most important. Business Link in particular have invested heavily in their website and the information on there is relevant, up to date and useful. (See Link below)

10 things no-one tells you

Despite this wealth of published information there are still some key fundamentals, which I recommend to every new and existing business, that don’t seem to be covered anywhere else and these are:

1. Get a separate bank account and keep your business cash separate from your personal cash. Pay yourself out of this bank account once a month and don’t use it for personal items.
2.  Get an accountant as soon as possible they will save you money in the long run. Make sure they offer fixed fees and unlimited advice and if possible they allow you to pay over 12 months.
3. Get a spreadsheet from your accountant to keep your transactions on or better still sign up to xero.com or another online system or get Sage.
4. Register with HMRC and make sure you meet their deadlines. Attend one of their running your own business seminars. Use an accountant to help you meet your deadlines but make sure you are on top of these.
5. Track your cash on a simple spreadsheet so you know how much cash you are likely to have and when you are likely to run out.  It will give you peace of mind and will aid in a good night sleep if you have this information at hand.
6. Get a database to keep track of customers. Use a spreadsheet, try Act from Sage or use an online system but get one and record details of everything. It will help you get organised and save you time in the long run.
7. On your computer don’t use my documents to save everything. Set up a separate folder with the name of your business and then set up sub folders for customers, suppliers, marketing etc and make sure you back this up.
8. When marketing for the business don’t blow the budget on one form of advertising. Test different approaches and measure the response. Do more of the thing that worked. A client of mine spent £10,000 on a well-known paper based and online directory and received very little response.
9. Get a website. Even if it’s a one pager with your contact details on it. Ensure you have the things people are likely to search for you included in the page headings and content and get it submitted to Google. Set up a Google places page and get your site listed on as many free listings as you can such as www.accsysnetwork.co.uk . This will give you a higher page rank in Google and increase the chances of your website being found.
10. Become and expert or the go to guy or gal in your industry for what you do. Experts earn more and attract more customers than anyone else. Become famous for what you do. Think Martin Lewis the expert money saver. He is the go to expert for money saving advice and it has made him a millionaire. Become your own expert in your industry by writing about what you do, by commenting on blogs and forums or by setting up your own website. It doesn’t have to be expensive moneysavingexpert.com costs £100 when it was made in 2003 and it now has 7 million users each month.

If this doesn’t sound like advice that you would ordinarily expect from your accountant then that’s because we aren’t your ordinary accountants!

It’s true we do take care of your accounts, tax and payroll service but we are also interested in your whole business. We want you to be a success and in order for you to do that we need to look passed the accounts the year end, passed your day to day bookkeeping and at the business and what you want from it and what you want it to become.

Our Business Review Programme comes in two versions start up and growing and helps you take a look at the business from a different perspective, review it and come up with a plan to take it where you want it to go. You don’t even need to change accountants to enjoy the benefits of this service.

If you would like more information about anything mentioned here please call Will on 01622 671 835

Useful Links

http://www.businesslink.gov.uk/bdotg/action/layer?topicId=1073858805
http://www.accsysltd.co.uk/services/other-services/

Whenever I sign up a new client I make a point of always asking the question, How do you price your services? The answers I get are often surprising and not what you might expect.

The reason I ask is because, in my opinion, pricing is the number one reason why businesses fail. Lack of cash flow is a close second but often the lack of cash flow can stem from a badly priced product or service.

The answer I want to hear from my new client is that they have assessed exactly what their costs are and have taken these into consideration when calculating price.

The answers that often come back are:

When I hear this and then scrutinise the basis for the figures it doesn’t take long to realise that the business needs a new pricing model.

Costs

Don’t get me wrong the basis for pricing doesn’t have to be solely on cost, it does depend on many factors such as:

1. Who you are selling to – the price to the wealthy may be higher
2. What your reputation is – booking a celebrity chef for your dinner party will cost a whole lot more than a local one
3. The value consumers place on your brand – people will pay more for a well-known brand.

Even if you are lucky enough to fall into one of these categories then I argue you still need to know the cost of your product or service.

At a recent meeting I asked “the question” to a loss making client who was struggling for cash flow and they told me that they used a set price for a particular service. I asked how they had arrived at that price and they answered that they were not sure.

So we undertook a cost analysis of the particular item and arrived at a price that was twice what they had been charging. I worked with them to create a bespoke pricing sheet that they now use to price every job. They no longer make a loss.

Perception

The final factor in pricing is perception. The price you put on your product or service has a direct link to how your customer views it. If you are cheap then the customer may feel that there is something wrong with the product or that you won’t deliver. Too expensive and they just won’t buy unless you have a strong brand or reputation to help make your brand and reputation desirable.

So my advice is to work out your costs first then use this as a basis for pricing before considering the other factors discussed above. At least you will be charging enough to cover your costs and avoid making a loss.