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How Useful Is A Cash Flow Forecast?

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A Cash Flow forecast is not ‘an interesting piece of information’ to have, it’s an essential tool for your business planning. You could say that every business should have one. It will help to identify if there are peaks and troughs in your business. It will identify that perhaps more money comes in (inflow) or goes out (outflow) at a particular time of year. The forecast usually covers a period of 12 months with a month-to-month analysis, although some businesses may require a day-to-day analysis and larger companies may need to produce a cash flow forecast for 3-5 years. In the latest article from Caroline Streatfield Bookkeeping based in Eastbourne in East Sussex, we look into the definition of a cash flow forecast, how it will help your business and why you need one.

What is a cash flow forecast?

This predicts the net cash flows of your business for a future period. It determines what will be coming into your bank account and what will be going out. By discovering these figures, you will have an estimate of your bank balance for each period covered, for example each month. In the perfect scenario, you will be looking for your cash inflows to be more than your cash outflows. The elements involved in a cash flow forecast are the opening balance, monies received, monies going out, the difference between these which can be a negative or positive figure and of course your closing bank balance.

How will a cash flow forecast help your business?

 If you are a new business, it will initially help you to identify how much capital you need for your start-up costs and cover initial trading.

  • Highlight any shortfalls in your cash balances
  • Identify any increases in costs
  • Give the trading performance of your company
  • Analyse your business to check it is performing as you want it to

An early warning system for you to take the necessary action

If there is a potential shortfall in income, a cash shortage or increases in your costs are expected, it will act as an early warning system and give you the opportunity to take action. This could determine if you need a loan or an overdraft and if you do need to borrow money, how much your business can afford. It will also act as a guide so that you can stay on track and remain within your financial limits.

Why do you need a forecast?
  • To pay suppliers and employees
  • Your bank may want to see it
  • Helpful for financial planning
  • Keep track of overdue payments
  • Plan for shortfalls
  • Manage surplus cash

The bottom line is that you need a healthy cash flow

It may be a clichéd saying but in business, “Cash is King”! Without a healthy cash flow, your business won’t survive. And it is particularly important for SMEs and start-ups to know where they stand in financial terms. If you know in advance that you have a potential shortfall looming, you can do something about it.

Contacting Caroline Streatfield Bookkeeping for your cash flow forecast

Used effectively, a cash flow forecast is a very valuable tool to have for your business. It is in essence central to maintaining the financial stability of your company. If you need help with your cash flow forecast, why not talk to the experts at Caroline Streatfield Bookkeeping? We work with a lot of start-ups and SMEs who find keeping track of their finances essential for keeping their companies running smoothly. For more information, call Caroline on 07982 682746 or 01323 885205 or email info@bookkeepereastbourne.co.uk

Deadline Is Approaching – Less Than 100 Days To File Your Self Assessment

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File your self-assessment now!

The deadline of 31 January 2021 to file Self Assessment forms is fast approaching and will be here before we know it. Even though it has been an extraordinary year, you will still have to file your Self Assessment forms by the deadline. You should have been notified by HMRC as to whether you need to file a Self Assessment tax return and of course if you are not sure, please call the friendly team at Caroline Streatfield Bookkeeping, based in Eastbourne in East Sussex. We will be delighted to offer help and any guidance you may need. We strongly advise you do not leave filing your Self Assessment form until the last moment. The sooner your tax return is submitted, the quicker you will know how much your tax contribution will be.

Changes to the furlough scheme due to the second lockdown

The furlough scheme was due to end at the end of October but is now being extended until December. It will help employers who had previously had to top up furloughed wages by 20% with the government paying 60%. The state will now put in the full 80%, but as an employer you will have to cover your employees’ national insurance and pension contributions. To be eligible, employees must have been on the payroll by 30 October 2020.

Self-Employment Income Support Scheme Grant Extension (SEISS)

 There are also changes to the Self-Employment Income Support Scheme (SEISS) with the government taking more action to support the self-employed. The SEISS Grant Extension will provide critical support to the self-employed in the form of 2 grants. These are available for two 3-month periods covering November 2020 to January 2021 and February 2021 to April 2021. For the first period, the government will provide a taxable grant covering 55% of average trading profits, which will cover 3 months of profits, capped at £5,160. It will be paid out in a single instalment. This is an increase to the previously announced level of 40% of trading profits to 80% for November 2020. The second grant starting on 1 February 2021 will be reviewed and an announcement made in due course. You should note that the grants are taxable income and subject to National Insurance contributions.

How can Caroline Streatfield Bookkeeping Help Your Business

 If you are a local tradesman or professional wanting bookkeeping and Self Assessment services, Caroline Streatfield Bookkeeping is here to help. Much of our business comes through referrals with recommendations coming because of our personal approach and our honest and open pricing structure. We are here to help all types and sizes of businesses and will listen and respond to the needs of each client – we know that one size does not fit all. Call us on 07982 682746 or 01323 885205 or email info@bookkeepereastbourne.co.uk to find out more.

A word of warning about scam emails and text messages

HMRC has pointed out that there has been an increase in scam emails, calls and texts. Please do not respond if someone claiming to be from HMRC contacts you. They may say that financial help can be claimed or that you are owed a tax refund and will ask for personal information including your name, credit card and/or bank details. Please note that you can forward suspicious emails claiming to be from HMRC to phishing@hmrc.gov.uk and texts to 60599. Again, if you are not sure, please do get in touch with Caroline Streatfield Bookkeeping.

Less than 100 days to file your tax return.

Starting A New Business And Becoming Self-Employed

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Although the last few months have been difficult and the future will continue to be unknown for some time, it has been a time when many people have had an opportunity to consider and reflect on their work prospects with their current employers. Some may have had the worst possible outcome and lost their jobs, but for others it has proved to be a wake-up call where they have been able to evaluate their current employment. Some may even be contemplating starting up their own businesses and joining the ranks of becoming self-employed.

A good time to start a new business?

History indicates that there can be a spike in new business start-ups after a recession and that many successful companies have been formed during unlikely times. In the latest article from Caroline Streatfield Bookkeeping, we look at why it’s not unusual for new businesses to start-up following a recession, what you have to consider becoming self-employed and how CSB can help you.

Why do new businesses start-up during a recession?

 It could be quite simply that you have lost your job and you have to do something. There really isn’t anything wrong in finding yourself in this position; it will just mean that you will have to proceed with some urgency. There are also lots of good reasons why it’s a good time to start.

  • A lot of talent is available
  • Government initiatives are accessible
  • Banks are willing to finance new ventures – better credit options
  • People are more likely or have to take the risk
  • Adversity brings people together
  • Less competition

What to think about if you become self-employed

 Economic downturns can bring advantages to start-ups and it could be an excellent time to open a new business. There are lots of pros to starting up your own business and perhaps one of the most important reasons is that you become your own boss. You will have more control and flexibility and can work around your commitments. However, you will have to manage your own business including cash flow, keeping accurate records and completing tax returns.

  • Formulate a business structure – take advice if necessary
  • Register as self-employed within three months
  • Register for VAT if taxable turnover is expected to exceed £85K
  • Set up a business bank account
  • Establish a process for your accounts, business expenses etc.
  • Look at the accounting software you need
  • Arrange insurance

How can Caroline Streatfield Bookkeeping help?

CSB is a bookkeeping company with offices based at Archer House in Eastbourne and we can help you with any questions you may have about starting your own business and becoming self-employed. We can also advise on your tax implications, National Insurance, registering as self-employed and help you with the best software for your business. Call us on 07982 682746 or 01323 885205 or email info@bookkeepereastbourne.co.uk to find out more about becoming self-employed and how we can help you.

How To Reconcile Your Bank Account In QuickBooks?

Paul Cooper #businesssupport, Quickbooks, Tax Returns , , , , , ,

As a business owner, you need to keep accurate financial accounts and reconciling a bank statement is an important part of ensuring this, so that the monies you record are consistent with the figures that your bank is reporting. Here, at Caroline Streatfield Bookkeeping, based in Eastbourne in East Sussex we recommend bank reconciliation should be carried out every month in order to ensure accuracy of your accounting records, which could flag up unusual transactions quickly. Software such as QuickBooks makes this process a lot easier as there is an automatic bank feed, which allows information from your business bank account to be fed into the accounting system. In our latest blog, we look at what bank reconciliation is, how you do it, top tips and why you might see errors in your figures.

What is bank reconciliation?

This is the process of matching the balances in your business accounting records to the corresponding information in your bank statement. Bank reconciliation will establish if there are any differences between the two cash balances and if there are, you will need to check your business accounting records. Regular checks will highlight anything that appears fraudulent and any accounting errors.

How to carry out a bank reconciliation?

  • Compare your 2 statements
  • Add bank-only transactions to your book balance
  • Add book transactions to your bank balance
  • Compare both of the adjusted balances

First of all you will need to see if both cash balances match. You will have to go through the transactions individually and make a note of any discrepancies. This process will ensure all entries have been downloaded and checked for any errors. You could find for example that duplication has resulted if a transaction has been manually added in addition to the bank feed. Any slight cash differences may be caused by payments that haven’t been processed or interest charges. QuickBooks accounting software has a reconciliation module that allows you to enter the ending cash balance of your bank account to aid this process.

Tips from Caroline Streatfield Bookkeeping on bank reconciliation

CSB recommends that it is easier to reconcile the bank on QuickBooks if you have a copy of the paper bank statement in front of you. If you have multiple transactions on a daily basis, it is a good idea to tick them off manually on the paper statement as well as using the reconciliation screen on QuickBooks. Also if the monthly bank statement is long in length with entries, for example 12 pages long, you may find it easier to reconcile to the balance of each page rather then trying to do the whole month in one go.

Reasons for errors in bank reconciliations

  • A transaction hasn’t been recorded
  • An error in the amount registered
  • The cash balance at the beginning was incorrect
  • Mistakes have been made in journal entries

How can Caroline Streatfield Bookkeeping help you with your bank reconciliation?

Caroline Streatfield Bookkeeping is a registered HMRC agent and can help you with any questions you have regarding bank reconciliation with QuickBooks. Caroline and her team are fully qualified and undertake regular training to keep up to date with HMRC changes. CSB can help you with all your bookkeeping requirements, Self Assessment Tax Returns and payroll services with accounting software training also offered on QuickBooks. For more information, call Caroline on 07982 682746 or 01323 885205 or email info@bookkeepereastbourne.co.uk

Does Your Business Need An Accountant Or A Bookkeeper Or Both?

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The coronavirus pandemic is one that could not have been predicted or planned for and its ramifications are being felt throughout the business world. There is a tremendous amount of uncertainty with many people already feeling the financial implications with some losing their jobs and others on reduced incomes. Some businesses are being hit harder than others although on the other side of the coin, there are some real winners in terms of business. Those who are feeling the pinch financially are already tightening the purse strings and looking at ways in which costs can be cut and money saved. In the latest article from Caroline Streatfield Bookkeeping based in Eastbourne in East Sussex, we look at whether you could reduce your overheads by using a bookkeeper rather than an accountant.

What do the terms bookkeeper and accountant mean?

Bookkeeping has traditionally been viewed as the first part of the accounting process involving the efficient running of finances including recording and organising of data. Monies coming into and out of a business are accurately tracked and the day-to-day cash flow is managed. Bookkeepers can also prepare for year-end tax returns and file them. Accountants are able to carry out audits and sit down with business owners to forecast future business needs.

The line between bookkeeping and accountancy is diminishing

Many people are unsure as to whether they need a bookkeeper, an accountant or both and are actually not clear about the differences between the 2 roles. It’s true that the work involved in bookkeeping and accountancy has always overlapped and today it can be said that the line between the two is slowly diminishing. With the advent of accounting and bookkeeping software, some parts of accounting are being slowly absorbed into the bookkeeping process. Bookkeeping software can now generate financial statements, which used to be an exclusive part of accountancy.

Does your business need a bookkeeper or an accountant or both?

Using a bookkeeper could be more cost effective and like accountants, they can provide tax advice. Whether you require a bookkeeper or an accountant is very dependent on the level of service that your business requires. Both an accountant and a bookkeeper can help you manage your day to day finances as they can monitor cash flow from different accounts, can deal with bills and invoices and organise your books for better management. Accountants are more expensive but are not involved in everyday bookkeeping.

How Caroline Streatfield Bookkeeping could help your business

Caroline Streatfield Bookkeeping works with all businesses including sole and limited companies with CSB doing the bookkeeping for the majority of the latter with an accountant doing the year-end filing. A growing trend is for more limited companies, perhaps with limited transactions, to have their annual accounts prepared by a bookkeeper. CSB is also fully trained in preparing the accounts for micro-entities, smaller companies, which often need a simpler set of year-end accounts.

Contacting Caroline Streatfield Bookkeeping

If you are looking to reduce your overheads, why not talk to the experts at Caroline Streatfield Bookkeeping as you may be using an accountant when you actually only need a bookkeeper? We keep in touch with our clients, have local connections, and you would have one point of contact. CSB can prepare self-assessments, small limited company accounts and can do the payroll for you. Caroline is fully qualified and undertakes regular training to keep up to date with HMRC changes. The company complies with data protection and money laundering policies. For more information, call Caroline on 07982 682746 or email info@bookkeepereastbourne.co.uk

 

Changes To Off-Payroll Working (IR35) Rules – Effective 6th April 2020

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New rules will come into effect from 6th April 2020 for off-payroll working (IR35). The draft legislation was published in the Finance Bill 2019-20, which amongst other tax measures, introduced important changes for workers providing services through an intermediary in the private sector, known as off-payroll working. The Chancellor of the Exchequer will confirm the final contents of the bill in the 11th March budget and the changes will affect any contractors who are working through a Personal Service Company (PSC), recruitment agencies as well as large and medium sized end clients. In the latest blog from Caroline Streatfield Bookkeeping with offices in Eastbourne, we look into off-payroll working in more detail, the main changes and what you will need to prepare.

 What Is Off-Payroll Working?

This is a term used by HM Revenue & Customs (HMRC) to describe the following situation:

It is when an individual provides their own personal services via their own private company, known as their Personal Service Company (PSC) to an end client where the following test is met: if the worker is actually providing those services directly to the end client, the worker would thereby meet the employment status tests to make them an actual employee of the end client.

Main Changes To IR35

  • The end-client is responsible for determining if a contract is inside or outside IR35
  • Small businesses are exempt from the new rules
  • A Status Determination Statement must be provided by the end-client confirming the IR35 status of a contract
  • IR35 status dispute is led by the end-client
  • The 5% administration allowance is to be withdrawn although it will continue for PSCs working with small end clients
  • Employment tax liabilities are transferred to a relevant person who is any party involved in the payment to a PSC

What Constitutes A Small Business?

  • Annual turnover is less than £10.2m
  • Balance sheet total is less than £5.1m
  • Fewer than 50 employees

What You Need To Do As A Client

It will be your responsibility to decide upon the employment status of a worker and it must be done with every contract that you agree with an agency or worker. Once you have decided you will need to:

  • Pass on the reasons for your decision to the worker or the organisation you contract with
  • Keep detailed records of the employment status including reasons and the fees paid
  • Have processes in place that can deal with any disagreements that may arise

Conclusion

Off-payroll (IR35) working is a large topic and it can be problematic determining if the rules apply. However, from April 6th the emphasis will be on you as an employer to determine the contractor status.

What To Do Next

If you are struggling with off-payroll working, Caroline Streatfield Bookkeeping, based in Eastbourne in East Sussex can help you unravel this complicated status. Call us on 07982 682746 or email us. We will visit your home or workplace within East Sussex and can also work remotely to cover other locations, which are further afield.

Next time, we’ll be talking more about this topic, so be sure to stay tuned to our blog.

Bookkeeping In Eastbourne For 20 Years – Expansion And Changing With The Times

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Caroline Streatfield Bookkeeping (CSB) started life in Caroline’s bedroom, but the business has really moved on and flourished from this modest start and this month CSB is celebrating 20 years in business. Today CSB has its own office premises and employs three part time staff with almost 180 clients.

A milestone of this type shouldn’t go unnoticed and unheralded and so Annie from Writing and Blogging was sent in to investigate and find out a little bit more about this entrepreneurial lady.

Born in Surrey, Caroline is married with two children and has lived in Eastbourne for 6 years having lived in different areas of Sussex throughout her life. Her background is in taxation.

  1. Caroline Streatfield Bookkeeping (CSB) is celebrating 20 years in business. Can you tell us how you got into bookkeeping?

 It’s quite simple really, as when I was pregnant with my daughter I was looking for a career, which would fit around a young family. I needed flexibility with my hours and the logical fit was to build on my experience in taxation.

  1. What qualifications and training did you need?

In 2000, I enrolled as a student on the Institute of Certified Bookkeepers training course and took and passed the exam in the same year. Things are always changing in the world of taxation and bookkeeping and since then I have undertaken training regularly to keep updated and current.

  1. So, you started your own business straight away?

Yes. I advertised for clients immediately and my first client was a heating engineer and I’m delighted to say, he is still a client today. In order to broaden my knowledge, I also worked for a local accountant.

  1. What is the scope of your bookkeeping work?

It’s probably easier if I just list them:

  • Bookkeeping on cloud systems
  • VAT Returns
  • Self Assessment Returns
  • Training on software
  • Small limited company accounts and tax returns
  • Registration of companies and self assessment
  1. You must have seen quite a lot of changes in the industry over the last 20 years. Can you tell us what the major ones have been?

Yes, there certainly have been a lot of changes including the introduction of cloud- based software, which has revolutionised the efficiency of bookkeeping. There has also been the use of government gateways and more availability of information published by HMRC on the Internet. When I started, my clients often sent documents through the post, but today much of this is done by email. GDPR has also been huge with loads of regulations. I have to say that I don’t see many ledger books these days!

  1. How do you communicate with your clients and what are your response and delivery times?

CSB has only one mobile number which means clients can ring me directly rather than leave a message with a colleague at the office. It’s my aim to always get back to a client the same day, if I can’t talk to them when they ring.

  1. How do you ensure that all your client’s information is safeguarded?

This is really important to me and so I am registered for GDPR and ensure confidentiality within the guidelines. Eastbourne is a small town and therefore it is doubly important.

  1. Do all of your clients file online?

Filing online is compulsory for some businesses, but I’m also happy to work with smaller businesses who can still file non digitally.

  1. Do you do any teaching about using software accounting packages?

Some of my clients have asked for help with bookkeeping on QuickBooks and Xero and this is an aspect I really enjoy – clients seem to enjoy my calm approach.

  1. What are the best parts of your job?

It’s definitely meeting the clients and if their books are in a bit of a muddle, it’s super to sit down with them and find a way forward. Oh, and making sure that everything balances and deadlines are met.

Caroline’s client list is still growing with many coming to her by way of referrals. If you are looking for an experienced and yet realistically priced bookkeeper, please give Caroline a call on 07982 682746 or email info@bookkeepereastbourne.co.uk

Congratulations Caroline and I personally wish you many more years of success in your business.

Thank you for the interview.