Latest news from HCA - July 2017

How accurate is your management information?

We have heard some horror stories over the last month of businesses making key decisions about their business, based on reports from their bookkeeping software. It worries us that business owners are making decisions using a Profit & Loss report or other management information that is inaccurate and therefore potentially being misleading in relation to profit, liabilities and cashflow.

For example, in one case a sales invoice had been incorrectly posted. The invoice was set up in the software as a Gross amount, instead of allowing for the VAT. The total paid by the customer was still correct, but the Net Value and VAT split was not accounted for accurately. This therefore overstated the sales for the period viewed and also understated the VAT payment due to HMRC in 30 days. 

It is far too easy to just run a report in your software and believe this is the accurate numbers in your business. However, much like preparing your year-end accounts, when we are completing a set of management accounts we often need to accrue for purchase invoices that have been paid in advance or prepay for a liability for which an invoice has not been received. These accruals and prepayments reflect an accurate picture of profit or loss for the period. 

Another common adjustment is ensuring that the period income and expenditure is on a like for like basis. The business may be posting to their software on a cash basis and their reports therefore show the sales for one month against the expenditure of the previous month. This is common for businesses with cash sales, but have taken the 30 day payment terms of their purchase invoices.

If you are going to rely on your financial records to manage your business and assist your key decisions, then of course it’s a given that this information needs to be accurate.

If we can help you prepare management information on a one off or regular basis, then please call us. 

Do you check or need a Secure Socket Layer Certificate?

How do you know that a website you are visiting is secure? 

This is a question you should be asking and certainly before you add any payment card details. Ensure the sites you are using are secure. You should look out for a small padlock symbol in the address bar (or elsewhere in your browser window) and the web address should begin with https:// instead of http:// (the s stands for 'secure'). These are levels of validation to show that a web site has a Secure Sockets Layer (SSL) certificate. 

SSL certificates, sometimes called digital certificates, are used to establish an encrypted connection between a browser or user's computer and a server or website. The SSL connection protects sensitive data, such as the payment card information.

Does your web site need an SSL certificate and thereby give your visitors confidence when using your site? 

If in doubt, or if you wish to consider an SSL certificate, then please call us and speak to Chris.

Sage Accounts Software: Short Cut / Function Keys

At HCA we are members of the Sage Accountants Club as their Bookkeeping Software remains one of our favourites to use. During training sessions, we have been delivering with our clients, we have found that the preference remains with the use of a keyboard shortcut, rather than a mouse click, as it seems to be the more natural flow during the input of data such as batch invoices.

Within their software, Sage have created some valuable short cut keys to help you. Here are the most popular five: 

F6 – Duplicate field above

F7 – insert a new line

F8 – delete the contents of a line

Shift + F6 – to copy cell above & increment 

F9 – Calculate Net

You can find a full list of the shortcut keys in the ‘Help’ section of your Sage Software. 

Are you ready for GDPR?

The EU has introduced the General Data Protection Regulation (GDPR) to update and harmonise data protection practices across the EU. It will apply to all EEA countries and any individual or organisations trading with them. 

It comes into force on 25 May 2018 (before the UK leaves the EU) and UK individuals / organisations must ensure compliance with the new regime by then.

GDPR applies to processing of personal data where the controller or processor is in the EU, and/or offers goods and services. These changes will impact more businesses than many consider, so please review the potential impact on your business sooner rather than later.

For more information about GDPR, please click here to visit the Information Commissioners Office Website

Changes to the taxation of employment termination payments

On behalf of our payroll clients we have managed more redundancy payments in the last couple of years than during the previous decade. 

If you are considering the termination of someone’s employment contract, by redundancy or notice pay, then you may be interested in this draft legislation and instigate the process required sooner rather than later. 

Draft legislation, that is expected to come into effect from April 2018, means that Employer NI (currently 13.8%) must be paid on all sums over £30,000 and all payments in lieu of notice.

You can read the HMRC Policy Paper by clicking here

Off-payroll working rules for public authorities

Are you a subcontractor with a public authority as your customer? If so, especially if you are trading as a Personal Service Company (PSC), then you need to be aware of these changes.

Public authorities, such as councils, hospitals and schools, will now have to consider the worker relationship with the contractor and potentially deduct Tax and National Insurance from any payment made to the supplier.

For more details, please click here