Insight Associates provide outsourced accounting and Finance Director services to ambitious and growing businesses. We work as your only resource or with existing staff to give you complete financial support including monthly management accounts, high level financial advice, robust controls and financial systems, funding and business planning, payroll & compliance, VAT returns and statutory compliance.

Successful business leaders have all the information they need to make good decisions…Do You?

Thursday, October 15, 2015

Scrouge, Christmas and the National Minimum Wage

It’s the beginning of October and although the sun has been shining we need to plan now for the financial implications of Christmas on businesses.

During the festive prologue it’s not unusual for businesses to utilise additional temporary staff to meet increased workload demands so the first thing you might want to consider is how the 1st October 2015 National Minimum Wage increase may affect your business?

If you’ve based your costs on what was paid last year you may want to think again.

As well as the adult rate changing from £6.50 to £6.70 ...
  • The apprentice rate increases by 57p to £3.30
  • The rate for 18-20 year olds will rise by 17p to £5.30
  • Those aged 16-17 will now be paid £3.87, an increase of 8p
  • As far as we know there has been no change to the rate for Elves & Reindeer!
If your business is operating well and can afford it, you may want to consider rewarding staff with a Christmas Party of Gift.  If you do, here’s a few things to be aware of.

Employees won’t have to pay tax or national insurance on the cost of what you provide if you meet the following criteria:

  • Total cost does not exceed £150 per head per year including VAT (for all events).
  • All staff working in the same location must be invited
  • If the cost exceeds £150 per head even by just £1 the employee will be taxed on the whole amount not just the additional £1 (nasty tax man! – bah humbug!)
  • Gifts (but not cash) can be given up to the value of £50 per year.
  •  Seasonal gifts such as a turkey, an ordinary bottle of wine or a box of chocolates are deemed acceptable and will generally be treated as trivial benefits and ignored by HMRC
  •  A turkey in a hamper, or less-ordinary wines may not be considered trivial and would need to be declared.
We’re not encouraging you to embrace your inner scrouge - after all it is the season to be jolly – but we do want you to keep an eye on the kitty!

If you want more in-depth information on either of these topics just sign up to our Info Bank.

Friday, September 18, 2015

I’ve no idea what HMRC stands for! LOL!

A recent Daily Mail article alarmed us slightly but also made us chuckle so we thought we’d share...

Research by Nationwide Building Society shows that Britons are more likely to know what text message abbreviations stand for than financial ones, such as PAYE, ATM and Isa. It found 79% of adults knew LOL means ‘laugh out loud’ in text speak, while only 60% knew Isa stands for Individual Savings Account.

77% of those questioned knew OMG is ‘oh my god’ compared with only 66% knowing PAYE is Pay As You Earn and even fewer (62%) knew what HMRC stands for Her Majesty's Revenue & Customs.

A building society spokesman said it’s alarming to see that people still don’t have a grasp of the basic financial terminology’.

To be fair it’s almost certainly not just banking and financial terminology many are unsure of but as we all earn/use/need/have money perhaps it should be slightly higher up our priority list than OMG!  I mean, how many people actually admit to believing in God these days? Whereas we do know HMRC exist!

The irony for me is some of the worst abbreviation culprits are ‘communications’ companies!

Here’s a few ideas we came up with for HMRC – why don’t you share yours with us…

  • Hopelessly Mysterious Restrictive Controls
  • Haphazard Meddling Ridiculously Coordinated
  • Haggered Muppets Remarkably Coping
  • Honourable Members Regularly Collecting
  • Humans Merely Reciting Cr**
  • Humungously Mediocre Regulatory Collective

Wednesday, September 16, 2015

A lack of Interest and Poor Management doesn’t bode well for UK small business.

A recent survey into the savings habits of 1000 small businesses across the UK revealed the shocking truth that almost a quarter received no interest on their surplus cash – that’s zero, nil, niet, nada!

A significant factor might be a severe lack of safe investment opportunities yielding a decent rate of return but surely that shouldn’t stop businesses trying altogether should it?  It’s the equivalent of keeping your own cash under the mattress!

Another report, commissioned this time by the Chartered Management Institute revealed that 44% of companies founded in the UK in 2011 had failed by 2014 citing blame on management and incompetence in 56% of the cases.

It’s hardly surprising then that the management of ‘money’ and ‘finances’ in small businesses across the UK really is such an afterthought with so many owner managers having little or no training in this area.

The real kicker in all this is that most people go into business to make money or create wealth in other ways.

So come on UK business, buck your ideas up and get a grip on the money in your business.

If you don’t want to learn how to manage your money yourself at least invest some time in finding the right person or company that will do it for you!

Monday, September 14, 2015

Employees pose the greatest FRAUD threat - Is fraud a by-product of economic recession?

An Association of Certified Fraud Examiners (ACFE) report carried out in the US in 2009 stated that 55.4 per cent of their respondents said fraud has significantly increased in the previous 12 months compared to the level of fraud observed in prior years with 49.1 per cent of respondents citing increased financial pressure as the biggest factor.

Employees pose the greatest fraud threat and 48 per cent indicated that embezzlement was on the rise.

Similar statistics were found in the UK with small and medium sized firms particularly vulnerable as they often depend on a small number of employees to carry out key accounting functions.  On top of this, anyone can call themselves an accountant or a book-keeper.

If you’re employing financial staff or outsourcing this service how can you mitigate your fraud exposure and protect yourself?

Well obviously we’d like you to use an accredited professional outsourced finance department like Insight Associates where reassurance comes from knowing we:
  • Are members of a professional body with a practising certificate
  • Have Professional Indemnity Insurance
  • Have a detailed client engagement procedure outlining scope of work, fees, complaints, money laundering etc.
  • Have stringent internal policies, procedures and systems regarding checks and controls
  • Agree approval processes with clients
  • Reconcile accounts each month and provide monthly management accounts and reporting.
If however you do decide to venture down the employment route there are some simple things you can do to increase your protection:
  • Don’t put all your eggs in one basket – for example split invoicing, banking and supplier payment tasks between 2 staff so there's less opportunity for collusion.
  • Recruit a member of a professional body and ask to see their qualifications – there are some professional accounting recruitment consultants out there.
  • Make sure you understand the reporting figures that are being presented to you each month. If something doesn’t seem right query it, ask for supporting documentation and contact outside agencies such as HMRC or the bank.

If you have any fraud concerns or need outsourced finance department advice please do get in touch and feel free to download our easy exercises for financial management e-book.

Alternatively the Metropolitan Police have published this great Little Book of Big Scams that has some really useful information.

Friday, September 11, 2015

UK Employers Fear the Impact of the Living Wage

The FT recently reported that UK employers fear the impact of the living wage (FT, 8 Sept, S Gordon/G Parker) and that the minimum wage announced in George Osborne's summer budget is affecting recruitment and growth prospects.

Whilst the Treasury said the Office for Budget Responsibility expects the national living wage to help 2.7 million low paid workers it does come at a cost – and those extra costs could mean up to 60,000 job losses.

The FSB’s latest survey of 1500 smaller businesses suggested the number of companies expected to grow had fallen and hiring and investment plans had cooled.

The national living wage is a serious challenge for small firms at the lower end of the pay scale such as hospitality, retail and social care.

So what’s the answer here?

Well, whilst we don’t advocate circumventing paying the national living wage by taking on more younger and self-employed workers we do think business owners need to have a clear plan for this change and others such as auto-enrolment.

Talk to us about any concerns you have.

Wednesday, September 09, 2015

"In this world nothing can be said to be certain, except death and taxes"– Benjamin Franklin 1789

A recent FT article (FT, 4th Sept, Adam Palin) suggested that UK Tax Payers are being unfairly penalised following the HMRC ‘right to recovery’ rules introduced last year.

After failing to keep up with an HMRC agreed ‘time to pay’ arrangement one taxpayer recently received a visit from an HMRC officer – incurring a £235 fee (on top of the original debt plus the 7.5 per cent charge levied on outstanding debts over £1500).

If the combined debt was not settled the HMRC letter made clear that goods would be seized and sold at auction incurring an additional fee of £110 plus 7.5 per cent on any amount over £1500.

So what’s your opinion here?

Is it heavy handed HMRC tactics that disproportionately penalise small business owners struggling to make ends meet and effectively killing off small businesses through taxes?


Is this a case of good credit control by HMRC and should businesses be held accountable for the tax they owe?

Whichever view you take there are a few basic rules that apply in all circumstances. Firstly, it’s vital that you prepare your accounts properly so you don’t have any ‘unexpected’ tax bills and secondly, if you’re contacted by HMRC don’t bury your head in the sand and ignore the letters, get in touch with them. Ignoring problems won’t make them go away!

Tuesday, September 08, 2015

Do you take plastic?

People of a ‘certain age’ will remember popping in stores for an ‘impulse buy’ and, realising they had insufficient cash, would ask if the store took plastic? 

You see back in the day, before retailers wisened up to those missed sales opportunities, there wasn’t the automatic assumption that a store would give credit – hence the question.

Things have come a long way since then and the acceptance of credit/debit cards is expected in most retail outlets. 

In fact from January 2016 even if you do pay by cash your purchase may still be made using plastic with the introduction of the £5 Polymer bank note featuring the image of Winston Churchill. The Bank of England recently announced the next design of the £20 note will be plastic too.

Going back to credit, is giving credit a good thing? Well no, not necessarily!  Remember the old adage that a sale isn’t a sale until the money is in the bank, well that still stands. You don’t have to give credit. You can ask for payment, or part payment up front, you will be amazed at how many customers will pay.

Don’t lend your money to customers without first ensuring they’re good for it. Credit check and continue checking because circumstances do change.

If you’d like more tips then please do download our FREE e-booklet on Easy Exercises for Financial Fitness.

Friday, September 04, 2015

Shaggy Sheep Story

You might have seen the recent news report about Chris the Australian Merino sheep whose years of avoiding the shears gave him a record breaking fleece weighing in at 88lb!

Chris isn't the first Merino sheep to avoid going under the knife either. In New Zealand in 2004 'Shrek', the worlds shaggiest sheep at the time, was discovered after hiding out in a cave for 6 years. His fleece weighed an impressive 55.5lb

But what exactly does that have to do with financial management I hear you say?

Well, it's like this...

Whilst we as a nation love supporting the underdog (or on this occasion the undersheep), in reality avoiding those essential 'cuts' was really bad for their health. In the same way as avoiding essential cutbacks in your business can be really bad for your business health.

Running away from hard truths or hiding away in a cave might avoid the immediate problem but it won't get any better unless you take some positive action.

So stop pulling the wool over your eyes and grab the bull (or sheep) by the horns and take a positive step towards financial fitness in your business with our FREE 'easy exercises for financial fitness e-booklet'

Tuesday, August 25, 2015

It's a Risky Business

The rather unexpected slump in the Chinese economy and the size of it might seem irrelevant to many smaller businesses in the UK, but that’s not necessarily the case. It has already impacted many commodity prices including oil; caused massive corrections in the world’s stock markets affecting investments; and could if it continues cause a worldwide slow down just as we all thought we were coming out of recessionary times.
All these factors lead us at Insight Associates to think about the impact of outside influences and how quickly factors outside of our direct control can change the environment in which our businesses operate.

When everything is running smoothly and business is booming nobody wants to be the negative Nelly/Nigel that asks the awkward ‘What If?’ question and we don’t want you to do that either.

Know Your Risks

It is however important to fully understand all the key risks in your business and find ways to monitor and review them. Consider the consequences of those risks, the worst possible outcomes, and how the business could cope.
Large corporates have risk registers but even creating a simple register or list is better than nothing.
Consider potential knock on effects of risks/events outside of your direct control and influence including International factors; government policy changes and funding cuts.

Without even trying here’s several recent news events that would have impacted some businesses
  • Airline bans on wildlife hunting trophy cargo
  • French ferry workers strike
  • The Civil Aviation Authority vintage aircraft aerobatic restrictions.
You might not change the nature of the risk but preparation and planning is likely to result in a reduced impact on your business. 

And remember… if you’re concerned about financial risks in your business then get in touch.

Some of the basics are addressed in our Easy Exercises for Financial Fitness eBook

Friday, February 27, 2015

VAT on Prompt Payment Discount

On 1st April 2015 important changes are being introduced to the VAT treatment of prompt payment discounts (PPD) including how these should be shown on VAT invoices and accounted for. There will be changes for both suppliers and customers who issue or receive VAT invoices with a PPD.

Current Rules

When a PPD is offered the supplier charges and accounts for VAT on the discounted amount.
The customer also treats the discounted rate as input tax (whether the discount is taken or not).

New Rules as of 1st April 2015

When a PPD is offered the supplier must account for VAT on the actual amount received.
Likewise, the customer can only claim for the VAT on the actual amount paid for the supply.

How to comply

Credit notes will need to be issued if the VAT differs from that on the original invoice or alternatively invoices must contain the terms of the PPD and a statement that 'the customer may only treat as input tax the amount of VAT actually paid'.

What do HMRC recommend?

HMRC recommend that tax invoices are issued showing net/VAT/gross amounts for both payment terms (with and without any PPD).  View an example invoice here.
The full HMRC brief can be viewed here on the HMRC website.

Insights Insight...

Our view is that this is an ill-conceived change implemented without any thought to the practical problems it creates.

We're not aware of any accounting software that can easily implement the HMRC 'recommended solution' of showing both options on invoices.

Confusions are sure to arise with receipt, payment and processing amounts being unclear. 
It seems the only way forward here is to issue your invoice with the most likely option and accept that you may have to adjust it if your customer either does or does not take the discount. You need to keep a careful eye on your suppliers too to make sure they get it right!
So, even if you don't offer prompt payment discounts you may benefit from receiving them and need to ensure the correct VAT is accounted for.
If you want to discuss this some more please get in touch.

Insight Associates, Insight House, Riverside Business Park, Stoney Common Road, Stansted Mountfitchet, Essex, CM24 8PL, UK
Tel: +44 (0)1279 647447 Fax: +44 (0)1279 814512
Insight Associates is a trading name of Financial Catalysts Limited. Registered in England and Wales Number: 5670047. Registered Office as above. Disclaimer | Cookies