George Granville

Storing your documents safely and securely

by George Granville on December 12, 2014

Each time we update your accounting data we upload the latest management accounts and reports to our secure online document storage. There is also the facility for you to upload some or all of your accounting data and documents for Drummond to process. You can access your accounting information, payroll documents and correspondence with Drummond 24 hours a day 7 days a week, wherever you are in the world, when you log on to our online server.

The secure document exchange is password controlled and permission based. There is no limit to the number of employees who can have access rights and all permissions are controlled by you. You can regulate specific access restrictions in terms of which content is viewable by each user and who can upload and download files.

There are no limits on file size, so you can save, upload, download and send files of any size without any interruptions or hesitations. You can also save your own internal files and either share them with Drummond or just simply store them online and have access to them whenever and wherever you want.

Whether you’re abroad or in your office as long as you have an internet connection on your computer or phone you can access all of your business’s important documents quickly and safely.

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George GranvilleStoring your documents safely and securely

How our accounting software works

by George Granville on December 12, 2014

At Drummond we maintain your company accounts on our multi company version of Sage Line 50. We make sure all of your data is securely stored and backed up on a regular basis.

Drummond is a member of the Sage Accountants Club and we automatically receive the latest software updates as well as well as specialist support reserved for accountants from Sage.

For our clients this means that there are no accounting software acquisition costs and software updates or support issues to consider. Your business will also benefit from not having the requirement to directly employ staff with the necessary accounting skills. By outsourcing to Drummond your business you will no longer have to arrange for sickness or holiday cover neither will you have to consider staff development and training.

Drummond can work with you if you would prefer to process and maintain your accounts on your own server, using your own copy of Sage software. By utilising Sage Accountant’s Link we can work remotely on your accounting data from our own office in Plymouth. Accountant’s Link is designed to allow our clients to continue working with their copy of Sage Line 50 at the same time as we are processing your accounting data and updating your management accounts.

At Drummond we are not restricted to working with Sage Accounting software – if you would prefer to work with different accounting software provider please get in touch.

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George GranvilleHow our accounting software works

Seven key accounting ratios for your business

by George Granville on December 12, 2014

The best way to analyse accounting information and comparing it over different time periods or with different businesses is to use an array of accounting ratios. These are used as a way of highlighting the relationship that exists between figures in a set of accounts as an aid to evaluating business performance and predicting future trends.

There are seven key ratios for your business:-

Gross Profit Ratio is the most commonly used ratio where gross profit is measured as a percentage of sales.

Net Profit Ratio is similar to the gross profit ratio but looks at net profit as a percentage of turnover.

Current Ratio reflects the balance sheet relationship between current assets and current liabilities. It is a useful indicator of a business’s ability to meet its liabilities as they fall due.

Liquid Ratio or Acid Test is the same as the Current Ratio except only liquid assets ie cash and other assets capable of being quickly converted into cash are included as well as all the current liabilities.

Debtors Ratio indicates the average length of time customers are taking to pay the invoices.

Creditors Ratio indicates the average length time the business is taking its suppliers. It tends to be more useful when you are looking at taking on a customer as it will give an idea on their speed of payment.

Gearing Ratio indicates the proportion of long term liabilities to the total capital of the business.

Return on Capital Employed measures the net profit as a percentage of the net worth of the business. The net profits are shown on a balance sheet and are calculated as total assets less liabilities. This represents the amount of capital that has been invested in the business.

If you would like more information on the application of forecasting and on using financial ratios to analyse your business please contact Drummond to arrange for more in depth information.

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George GranvilleSeven key accounting ratios for your business

Forecasting and Management Accounts

by George Granville on December 12, 2014

Forecasts are an essential part of the financial planning for your business. Drummond can work with you to prepare forecasts that run over the next one to three years. We will include in these forecasts as much detail as is appropriate to where you are in the business cycle and the complexity of your business.

Sales forecasts will largely be prepared by you the business operator. However we will review these with you and make sure the timings are realistic and that suitable provision has been made for slippage and sales falling away

Drummond can prepare Cash-flow statements showing your cash balance and cash-flow patterns for the following 12 to 18 months. The cash-flow statement will identify whether you will have sufficient working capital and will take into consideration key factors such as the timing of income and outgoings such as salaries, VAT and PAYE and loan repayments.

We can incorporate ‘what-if’ scenarios into the cash-flow to demonstrate the effects of over or under achieving on your sales targets or what happens to your working capital requirements should you increase the size of your payroll for example in order to meet those targets.

Working with the information from the Sales and Cash-flow forecasts Drummond can provide you with projected Profit and Loss Statements and Balance Sheets. Alternative Projections for the same point in time can be prepared using the different scenarios allowed for in your cash-flow forecasts.

Drummond’s financial forecast looks at where a business will be in the short to medium term against a given set of scenarios. These different scenarios may include any combination of an increase or decrease in sales as well as increases or decreases in overheads or costs of goods sold.

Using cash flow forecasts, projected profit and loss statements and balance sheet projections can be prepared. By utilising these reports your business will be equipped for more detailed projections on further specific areas of the business.

Drummond can formulate these forecasts for your business so that you are able to plan and prepare for future possible outcomes. With this information you will be in a position to get your business financial requirements in place in advance, before you have cash flow shortages.

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George GranvilleForecasting and Management Accounts

Looking for Multi Currency Bookkeeping? Drummond has the answer

by George Granville on December 12, 2014

Drummond provides bookkeeping and management reporting for business using foreign currency bank accounts including PayPal.

We can support as many different currencies as you would like and we can account for trades using sterling exchange rates as well as trades between foreign currencies themselves.

All accounting operations revert back to GBP, the base currency for your accounts, and exchange rate differences are recorded in your Profit and Loss statement. Your non sterling bank accounts are re-valued monthly as part of the month end routine.

Drummond can issue your sales invoices in the currency of your choice for your overseas customers. These sales invoices are entered into your accounts in GBP, your ‘base’ currency, using the most up to date HMRC exchange rates at time of issue to make sure you are VAT compliant.

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George GranvilleLooking for Multi Currency Bookkeeping? Drummond has the answer

Save money with the National Insurance Holiday for new businesses

by George Granville on October 23, 2014

National Insurance Contributions or NIC’s are part of the costs of running a company with more than 1 employee. In the current economic climate businesses are now finding it more and more difficult to cut back costs and improve growth so in 2010 the government introduced the National Insurance Holiday scheme.

The NI Holiday scheme allows new businesses outside London, the South East and the East of England an employer NIC holiday worth up to £5,000 for each of the first ten qualifying employees, in the first year of business.

Can I apply for the National Insurance Holiday scheme? 

Like all government programmes there are restrictions with the National Insurance Holiday scheme.

  • You can only apply if your business is located outside of London and the South East of England. All companies in the North East, North West, South West, The Midlands and Yorkshire areas are allowed to apply and also those in Wales, Scotland and Northern Ireland.
  • Your business has to have been established after the budget on 22nd of June 2010. The scheme will end in June 2013 so there is only a year left for new start-up businesses to apply and benefit from the programme.
  • You can apply to the scheme if your business is a Sole Trader, Company, Partnership, Property / Investment business or Trading charity.

Are there any connotations with applying for the National Insurance Holiday scheme? 

First of all if you are a business that doesn’t have a principal place of work for example if you travel by road or if you’re an internet based company then it may not be obvious where the place of work is. HMRC do have advice on their website about this problem.

All employees count towards the limit of ten employees regardless of whether they:

  • Don’t earn enough to trigger the NIC deductions
  • Are part-time or casual staff
  • Are family members or directors
  • Have more than one job
  • Are over pension age

This hinders the real impact of the scheme so you really have to make sure that all of your employees really do count so that your company can reap the benefits of the programme.

The employer NICs holiday is ‘de minimis State Aid’ which means there are specific European Commision regulations that both HMRC and the candidate business is not in one of the excluded sectors e.g. the coal sector, road freight transport sector and businesses involved in export-related activities.

It should be made clear whether your business is actually new. Businesses that have recently changed ownership or was formerly part of another established business may find it tricky to be considered a ‘new business’ for the scheme. You will need to confirm that your business doesn’t fall into one of the excluded categories before going on to apply for the holiday.

In the current economic climate it will do no harm for start-up businesses to take advantage of the government scheme. Whilst reports state that the scheme is failing due to no increase in employment rates those reports don’t affirm the fact that over 10,000 businesses in the UK are now prospering and developing encouragingly due to the holiday money that they have received.

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George GranvilleSave money with the National Insurance Holiday for new businesses

Five tips to remember for your annual tax returns

by George Granville on October 23, 2014

Tax returns can be a daunting time of the year especially if you haven’t undertaken this procedure before. As the recession hits more people, those that were in employment are now turning to the self-employed sector and some with no idea as to how to file for annual tax returns. We have included Drummond’s 5 tips to remember for your annual tax returns.

1. Do I have to file a tax return? 

If you are an employee you usually need to be earning a certain level of income, benefits or income that isn’t taxed, before it is necessary to file a personal tax return – although there are different rules for business owners. If you are either an employee or director in a business that is a partnership, sole trader or a limited company, then you generally do have to complete a tax return.

2. Keep a record of every expense 

One of the biggest areas that small businesses get caught out is when they don’t keep record of every expense throughout the year. As long as you keep good records, your tax return should be pretty straight forward and you can claim for expenses that you have spent money on for example business travel – including petrol, train and bus fares and also taxis. Although you can’t claim for your everyday commute from home to work and back again. You can also claim for office expenses like rental space.

If your small business is set up at home then you can claim for several of your home running costs. Usually you will spend a third of your time working from home so just work out a third of your bills e.g. electricity, gas and water – these are the expenses you can claim for in your annual tax return if you work from home.

3. Exclude VAT 

If your business is registered for VAT then you should remember that the figure for trading income will be your sales exclusive of VAT. If your business is registered on the Flat Rate VAT scheme then this figure would be your sales net of Flat Rate VAT.

4. Check on your accountant 

If you have an accountant make sure that they are on the ball and ready for the tax return deadline at the end of January. If you don’t have an accountant and filing your tax returns this year has been an absolute headache then phone Drummond and see what we can do for you to make your business better prepared for the tax year ahead.

5. Save money 

It is a good idea to keep money saved for the next tax year. Make a record of your business’s profits and your tax liability, this will give you the chance to see what you might owe and allow you to put money away throughout the year to make sure that cash-flow doesn’t become a problem. This simple strategy could make a different between stopping your business from going under and seeing it grow and prosper.

Remember tax returns don’t have to be taxing. If you are organised throughout the year either by hiring an accountant or just keeping tabs on all your business’s expenses then the process of filing your annual tax returns will be an easy process. If you think your business could do with the help of an accountant, get in touch with Drummond and see how we could help you.

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George GranvilleFive tips to remember for your annual tax returns

What will happen to small businesses if the Eurozone collapses?

by George Granville on January 23, 2014

As desperation increases for solutions to the Eurozone crisis, the rest of the world’s economy isn’t safe from the financial effects of the catastrophic Euro, especially small businesses. Those who own small businesses are at risk too from getting swallowed up in the Eurozone crisis so what will happen to small businesses if the Eurozone collapses?

Help my money is in Greece! 

Ambiguity in Greece has caused hefty withdrawals of funds from the Greek banks. The consequences of the recent political election saw €700m to €1.2bn taken out of the Greek banks leaving the Greek government and its population in an increased state of despair.

Although if the Greek banks were to collapse, then the European rules affirm that people with savings should have deposits of up to €100,000 protected but only if the Greek banks and government can stick by and uphold this agreement.

My business isn’t in the Eurozone; I’ll be fine won’t I? 

Britain may be at the front line of the Eurozone crisis but just because we’re not included in the Eurozone doesn’t mean we are not affected. The current situation in Europe could contribute to countries outside of the Eurozone including the UK.

It is important to understand where the entire chain of your business is from customers to suppliers. If your business sold clotted cream but your packager was in Greece then you may find yourself in a spot of trouble depending on your supplier’s economic situation. If you have a good supply chain strategy you won’t be likely to get caught out by the Eurozone crisis.

Should my business widen its client base? 

If your client base is predominantly in the Eurozone it might be a clever idea to think strategically about whether it’s worth widening your client base to other countries diverting the worst affected areas of the Eurozone. Moving your client base doesn’t have to be a big move, you could simply start thinking about Germany or Sweden for example.

Are there any benefits for UK businesses and the Eurozone? 

Yes there are. Businesses that are bringing goods into the UK from the Eurozone are far better off due to cheap imports. Due to the Euro being at such a low price UK companies are now able to discount goods in order to intensify competitiveness with opponent or similar businesses or to broaden profit margins.

With the Greek elections in June 2012, it is likely that the results of this could lead to Greece’s exit out of the Euro and the eventual collapse of the Eurozone. As countries such as the UK and Switzerland are getting ready and creating strategic contingency plans for their countries just in case the Eurozone does collapse, you should start implementing contingency plans for your business too.

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George GranvilleWhat will happen to small businesses if the Eurozone collapses?