The advantages of dyslexia in accountancy

Posted by & filed under Career, Communication, Inspiring stories.

According to the NHS, an estimated 1 in every 10 people in the UK has some degree of dyslexia.

They will all have found ways to cope with it, but generally speaking, dyslexia can make reading and writing tasks a challenge.

What is dyslexia?

Typically, people with dyslexia may find spelling, reading and writing more difficult. They are usually diagnosed at school, but for some people, it may only become a problem when they go to college.

Dyslexia ranges from real difficulty in reading and writing, to having the occasional problem with spelling. People with dyslexia may confuse the order of letters in words, mix up b and d, or guess at words they find hard to recognise.

They may also find it more difficult to follow written instructions and find planning and organisation more of a challenge. However, they are often very good at problem solving, lateral and creative thinking, and coming up with new and innovative ways to tackle problems, so they can be a real asset in an organisation.

Looking at the positives

In accountancy, while dyslexia can make written examinations quite challenging, it can also be an advantage when it comes to taking a fresh and creative approach to complex problems.

Robert Albert MAAT, who is now 33, was told in college that he had dyslexia, and has found that despite some of the challenges he faces, his dyslexia has also given him a unique perspective which makes him a valuable member of the team where he works.

“I always enjoyed working with numbers,” he says. “I initially wanted to do an AAT apprenticeship, but I couldn’t find a job, so instead I went to college and did A level accounting, business studies and IT.”

He was diagnosed as dyslexic at college and was given 25% extra time for his exams.

The affects of dyslexia

“Dyslexia takes different forms and affects people in different ways,” he says. “I am a slow reader, but I am good with numbers. For me, it can be an issue because there are time pressures at work – we are hired out by the hour.  When I first started working, I used to worry that I was not getting things done as quickly as other people.

“In professional career, I did find it a struggle in the early years before I was diagnosed, especially because time was important in meeting budgets.  I was feeling stressed because I felt I was not really working to same standard as the other people in my office. My employer sent me for a dyslexia assessment and they came up with ideas on how to help, which included using colour filters to read text.”

He says he initially found things tough until he started developing his own coping mechanisms. He discovered he had qualities that were unusual and useful to an employer.

Coping mechanisms

“The way my mind works is great for accountancy because it gives me a different perspective from other people,” he says.

“It also means that I am less likely to write a letter and more likely to pick up the phone. That helps to build up relationships with clients. I work full time and I also run my own practice at home.”

One of his coping mechanisms is to listen to music while he works.

“It helps me tune out the white noise and allows me to concentrate on what I’m doing,” he says. “Everyone has challenges and each one of us has to find ways of working around them. My message to people with dyslexia is not to be afraid but to make the most of your different perspective.”

As an example, he can look at a tax problem a number of different ways, and enjoys using spreadsheets and designing formulas.

“I’ve never been great with words but when comes to numbers I know I am going to be alright,” he says. “It’s about finding a way to use your strengths and not see them as weaknesses.”

Studying AAT with dyslexia

Robert Albert is now a MAAT and just applied for FMAAT, the highest level of membership you can achieve within AAT.

In the end, he didn’t request extra time for his final AAT papers because had taken A level accounting, and felt confident that had understood the course. He still uses a variety of methods to help him, including using colour filters to make text easier to read, noise reduction, and limiting distractions.

“I love what I do – I like dealing with people, and helping businesses grow,” he says. “I look at people like Richard Branson and see that dyslexia is not stopping him from being innovative and trying new things. Everyone has their mountains to climb – go and find what works for you and don’t be afraid to experiment.”

AAT publishes guidance on how students can access qualifications and assessments if they have individual difficulties.

The document: Guidelines for the application of reasonable adjustments and special consideration in AAT assessments says, awarding bodies and centres can make “appropriate reasonable adjustments to standard assessment arrangements, wherever this is required to enable access”.
In practice, this means allowing extra reading time for people with dyslexia.

If you need extra help with your AAT qualifications, AAT has an extensive range of study support for students, including practice assessments, careers advice and networking events.

Creating a successful formula for client relationships

Posted by & filed under AATPowerUp, Client relations, Communication.

It may sound obvious that developing good relations with clients is a vital part of any firm’s operations, but it’s all too easy to forget, particularly when the pressure is on to file accounts or meet hard deadlines.

In this article for our AATPowerUp series we’ll be looking at the importance of maintaining outstanding client relationships.

The good news for accountancy firms, though, is this is something that can be planned for, and an area in which individuals can improve their skills.

How to start the client relationship

Mark Tighe, CEO of specialist tax consultancy Catax, believes the foundations to a strong relationship are laid early on. “The way you establish an account on day one is vital,” he says.

“Everyone who is likely to work with the client should attend a face-to-face introductory meeting to find out more about the client business and its needs, as well as developing greater familiarity with the staff or managers who will be your key points of contact.

“It is amazing what a difference it makes to a relationship if you have met a client in person and established a rapport, rather than just being a voice on the end of the phone.” Once this has taken place, it’s then possible to agree a pipeline of work and how regular updates will be delivered, he adds.

Honesty is the best policy

Here, it’s essential both parties are honest with each other.

“The client needs to know if an accountant can work effectively with their business and what experience they have, whereas the accountant needs to understand the client’s accounting personality in order to ensure they are a good fit,” says Paul Donohoe, managing director of Tax Rebate Services.

“The accountant can then advise on action that needs to be taken, along with detailing his or her own role and what they will do for the client in the long and short term. It’s also important to find out what the clients expects of the accountant, what goals they hope to see achieved and what they would like to gain from the relationships.”

Maintaining authenticity

When it comes to the actual work, it’s vital accountants deliver what they say they will. “Many accountants fail to deliver on promises and often over-promise,” says Stephen Grayson, a partner at the Manchester office of UHY Hacker Young. “Although client relationships are important, it has to be undercut by good, reliable work. The quality, speed and efficiency of your work will always be what you are judged on aside from any personal relationships.”

But the ongoing relationship also requires careful handling, and it’s here that softer client-handling skills are essential, in addition to the technical elements. “It is very much a combination,” says Paul Russell, managing director of training company Luxury Academy.

“You can be doing wonderful work for a client but if they find you difficult to work with, or you have trouble communicating your success, the relationship will often founder. Similarly, you may have an excellent relationship with clients, yet fail to deliver on KPIs in which case your position is at risk. Soft skills enable technical skills.”

What is the right way to communicate?

Effective communication is essential, and this is often where relationships break down, says Donohoe. “Either the client holds something back or doesn’t respond to contact, as they feel that sticking their head in the sand will make a problem go away, or the accountant doesn’t clearly explain the processes and fails to keep the client in the loop at every stage,” he warns.

“Regular communication is imperative to ensure both parties are always on the same page, and it also makes the client feel more secure and in control.” Being proactive with communication can make a big difference, agrees Tighe.

“The accountants who go the extra mile, by contacting their clients with additional pieces of advice and updates on progress without having to be asked, will be the ones who retain clients and benefit from more new business through recommendation,” he points out.

“Good communication can also mitigate mistakes. If something has gone wrong, don’t sweep under the carpet; be open and honest and provide a solution.”

Building a rapport

There are other skills those working in client-facing roles require too, such as confidence and open-mindedness, says Lee Owen, director at Hays Accountancy and Finance. “The key to developing these skills is to look for opportunities where you can build rapport with your clients,” he says.

“This might start as small polite exchanges, but as your confidence and the relationship grow try congratulating a client on a piece of work or high-profile project they’ve done or share your ideas and questions with them at opportune moments.”

More junior staff can develop skills by shadowing more experienced colleagues, he adds, while networking – both offline and online – can also help to build relationship skills.  

Becoming a good advisor

There are other ways in which accountants can further build relations with clients. Grayson, for instance, points to using new technology which can make life easier for clients, and also the ability to help advise clients in other areas.

“Clients will regularly ask for personal advice about how they should handle a situation so it’s necessary to frame yourself as a business advisor rather than just an accountant,” he says. “Look after clients from a strategic view which takes into account all of their business objectives and helpfully guide them through the process.”

Strengthening career prospects

From a career perspective, having strong customer relations skills will make those working in the sector attractive to other employers, adds Owen. “These skills are transferable across the accountancy and finance sector, as successful client relationships are important in most roles, particularly the more senior you are,” he says.

“If you are able to demonstrate good client feedback to a potential employer this will only strengthen your application and open new doors.”

Coping with seasonal affective disorder (SAD)

Posted by & filed under Career, Members.

While for many the impact of winter weather is simply physical – the wearing of big jumpers; the need to de-ice the car in the morning – for some, it can result seasonal affective disorder (SAD).

So what is this condition – and what can sufferers do to cope with it and ensure it doesn’t impact on their working life?

SAD story

SAD is a type of seasonal depression. The symptoms, according to the NHS are:

  1. Persistent low mood
  2. Loss of pleasure or interest in day to day activities
  3. Irritability
  4. Feelings of despair, guilt and worthlessness
  5. Feeling lethargic and sleepy during the day
  6. Sleeping for longer than normal and finding it hard to get up in the morning
  7. Craving carbohydrates and gaining weight.

Usually (but not always) SAD is associated with the winter. While many of us will experience some or all of the above symptoms when it’s cold outside for SAD sufferers their day to day life can be severely affected, so much so that they dread the change in the weather.

Mental health charity MIND describes SAD as, “like having your own portable black cloud”.

It adds that SAD can worsen existing, year-round depression.

The affects of SAD

It can be a serious condition says Linda Blair, a clinical psychologist and a columnist for The Daily Telegraph and, thanks to the UK’s northerly location, is not uncommon in this country. “SAD is akin to depression and its symptoms are similar. It can seriously impact on sufferers’ lives.”

Dr Zoubida Guernina is a psychologist and senior specialist in mental health. 

She says: “SAD is a crippling illness that affects many people in winter especially. Most sufferers have to stay in bed and find it hard to go out and do things in the fresh air. It affects their wellbeing, their work and relationships. Most often it is followed by severe depression and negativity about oneself, others and the world at large.”

The power of vitamin D

What causes SAD isn’t fully understood, says the NHS. But it seems to be linked to the lack of sunlight.

Sufferers tend to have higher levels of melatonin – the hormone which makes you sleepy – and lower levels of serotonin which affects mood.

In addition, the fewer hours of sunlight in winter affect the body’s circadian rhythms – making it harder to wake in the morning.

Managing the condition

Professor Sir Cary Cooper CBE, professor of organisational psychology and health at the Manchester Business School says the key to handling the condition is seeing the light.

“If you work in an office, then your day is spent going from one box (home) to another box (the office) and then back to the first box. You’re not getting any natural light. You might even work in an office without windows.

“What you need to do is ensure that you get natural light every day – so make sure you at least go for a walk at lunchtime. And you must get physical exercise at least two or three times a week, whether that’s swimming or going to the gym or whatever you like.”

Blair advises

  • Sufferers should get at least 20 minutes’ natural light each day.
  • It’s best to take gentle, steady aerobic exercise, working your heart to about 60 to 80 percent of its maximum capacity.
  • You work out your heart’s maximum capacity by taking your age away from 220, so if you’re 20 then your maximum heart rate is 200 and you should work it to 60-80% of this is 120-160.
  • It means walking briskly, not running, so that you can still talk.

Employers seeing the light

It’s also important to stay active in the office, Professor Cooper says.

“Don’t send a colleague an email. Get up and go to see them. Sitting in front of a computer all day will not help. You need to move around, to talk to people. Exercise, daylight and social interaction will all help alleviate symptoms.”

Blair adds that it’s important to try to get up at the same time each day to manage your body clock.

“You might need more sleep but that’s natural in winter, just like animals’ instinct to hibernate. You are not being lazy if you feel you need more sleep: you are acting naturally.”

She also suggests that sufferers get special light alarm clocks, which wake you gently with gradually-increasing light which mimics sunrise. To get that extra sleep, go to bed earlier. And adds, it’s vital to turn off television, computer and phone screens half an hour before you go to bed as the light these devices produce inhibit melatonin production.

How employers can help

Dr Guernina adds that your employer should help too.

“It is important to get support from managers at work and to have forums and support groups in the workplace to encourage sufferers to talk about their condition. It is important for people not to feel they are struggling on their own. Most sufferers find it hard to do things on their own, including going out in the fresh air. They need genuine support to talk and to feel safe around those who understand their pain.”

Blair adds that employers can help by enforcing lunchtimes.

“Employers should not encourage workers to eat their lunches at their desks. Some people are afraid they will be looked at negatively if they leave their desks at lunchtime, but if they take a proper break outside, they will be more productive afterwards.” 

How to spot potential business opportunities

Posted by & filed under AATPowerUp.

Why do we network? What business can happen at local events and conferences and how do you spot a potential business opportunity?

Next in our AATPowerUp series we’ll be looking at how to build strong relationships and turn them into business opportunities.

There are always LOTS of opportunities to engage with people. Opportunities can pop up anywhere. “Anytime, anyplace, anywhere! What we need to do is be aware of them.

Remember business opportunities do not flag themselves up with flashing neon lights. Opportunities tend to arise when we are building genuine relationships.

Finding common ground

Getting to know people often creates the first stage of “opportunity finding”.

Just chatting to someone can create the first piece of connectivity (or something in common). Once we share one thing in common the relationship moves quickly onwards.

How do we find this first commonality? A good start is to ask interested questions. The easiest questions are the four things we have in common with every stranger at any event.

Four things to discuss with a stranger at an event

  1. Where they have travelled from.
  2. Secondly the host or the organisation who has invited you.
  3. Thirdly the type of event you are attending (party, wedding, local event, business event etc).
  4. Finally, yes you guessed it – the weather, as it’s always easy to talk about the weather they have just encountered, or how the weather will affect their plans at the weekend or holiday.

You will know you have found commonality when the speed, pitch and tone of your voices increase and pitch up!

Building a stronger relationship

When you find commonality you can then ask some more questions to build a stronger relationship.

You can then discuss what they do for a living, where they work, how they got into that line of work/business. People love explaining what got them started in that business, career or field of work.

Make sure you’re actively listening to the answers to these questions . When you do this –  lots of little clues will pop up to establish if there is an opportunity to take things further.

At any event there may be two or three accountants, a few bookkeepers, some social media experts, a solicitor etc. So what makes the difference between one and another? The relationship you build!!

People buy people

Spotting opportunities only comes when you are open to information. The opportunity may not be directly related to your role, but instead could be linked to your wider business, or may even present an opportunity to link another specialist in a totally different company to help them.

Do not try and close the business then and there

Once you’ve identified the opportunity – park it and ask some more general questions. Before you leave the person bring the opportunity back and qualify their interest.

An example of how to do this:

 “You mentioned earlier that…. I might be able to help you with that. Is it worth us having a bit more of a chat at some point to see if there is anything we can do to help each other?”

Do not try to do the business there. The event is not the place. Be satisfied to have spotted the opportunity and made the link to the next event. It’s at the follow up event that you can take the opportunity onwards.

Spotting opportunities comes out of talking to people, finding commonality and being interested. You then need to think on a wider angle to the possibilities of doing work together.

Why don’t business opportunities happen straight away?

Remember building relationships can take time, and not everyone is ready to do business with you immediately. But by showing interest, remembering things about them (the weekend, a holiday they are having, a family occasion etc) people will see that you are not just interested in the business but interested in them.

Later, when the time is right they will come back to you or refer other people to you. Business often takes time to let the need for your services to emerge, realise discontent with their current provider, or when some changes occurs in their business.

For more on how to build business relationships take a look at our webinar with Sue Tonks here.

Sue Tonks is an expert in networking and building relationships. This year she will be speaking at the AAT Annual Conference alongside various other experts. This years AAT Annual Conference is packed with inspiring talks, presentations and workshops designed to provide accounting and finance professionals with the skills they need to grow a business or advance their careers.

Join us, top brands and leading financial professionals on 13-14 June in Stratford-upon-Avon, to exchange ideas and learn more about the most pressing issues facing the sector.

20 tips to help you survive networking events

Posted by & filed under AATPowerUp, Communication, Members.

Networking: some people love it; for others it is a difficult but necessary part of the job.

As part of the AATPowerUp series, we asked the experts for 20 tips on successful networking, and how to build enough confidence to be able to start a conversation.

This will also help you to feel comfortable in any new environment such as, a workshop, conference, away day, or even a new job. Set yourself an achievable goal:

1. Set yourself an achievable goal:

“Sometimes we see a room full of strangers, and feel overwhelmed,” says human behaviour specialist Dr Jane Cox. “Personally, I set myself a target of speaking to 10 new people.”

2. See it as a chance to meet new friends

“With the right attitude, networking can introduce you to new friends with new perspectives and ideas, people you can learn from and people you can help as well as those who can help you,” says Sophie Devonshire, CEO at strategic consultancy The Caffeine Partnership, advising leaders at Fortune 500 companies including Nissan, L’Oreal and Unilever.

“Building up relationships with key people whom you respect and enjoy spending time with so that they become ‘your network’ can be a real support for helping you make key decisions or speeding up unlocking doors.”

3. Understand what might be holding you back

“Attending networking events taps into some of our core human fears such as rejection, failure and change,” says Melissa Kidd, founder of Motem Ltd.

“Once you understand those, you can do things to address them which makes the process of attending networking events and building relationships that much easier.”

4. Believe in yourself

“We all have the ability to be great networkers,” she says. “We’ve been building relationships since we were 2 years old so much of it boils down to communicating and making people feel special,” says Kidd.

5. Brush up your listening skills

If you’re shy, don’t underestimate the power of listening: Introverts are often good listeners which is vital for strong networking.

6. Find your own style

“There are many different networks out there and lots of different styles,” says Andrea Sexton – Director of Andrea Sexton PR. “Try a few out and see what suits you.”

7. Plan in advance

“Plan who you want to speak to before you go. Be conversational and don’t sell to people,” says Sexton.

8. Prepare some conversation openers

“The conversation needs to flow and interesting questions need to be asked,” says Liz Sebag-Montefiore, a director of 10Eighty, a career consultancy.

“It’s best if you don’t dwell on speaking about yourself – always ask them about what they do instead,” she says. “It’s important to understand how to join a group: ‘Do you mind if I join you?’  and it is best to ask a group of two or so who aren’t clearly in a confidential discussion ie, standing further apart.”

9. Identify who you want to meet

“Some networking events provides an attendee list – review and prepare you would like to talk to,” says Steph Rickaby of Sunflower Accounts.

10. Ask open-ended questions

What do you do? Have you been doing this for long? That sounds interesting, how does that work…….  Are you local?  Where are you based? Have you been here before….?

11. Be in it for the long term

“Networking works best when you build long term relationships then you can refer with confidence and with professionalism,” Andrea Sexton says.

12. Follow up straight away

“I block out time in my diary after each networking event in order to have the opportunity to follow up with people properly,” Sexton adds. “Stick with it and take it seriously – it will be worth it.”

13. Show interest in other people and don’t go for the hard sell

“Introduce yourself, although you might be an accountant, what is it that you actually do?” says Steph Rickaby.

“What pain point do you solve for people? Do you implement cloud based bookkeeping software Xero? Help implement systems and processes?”

14. Have an inspirational message

“At Sunflower Accounts, we help businesses save tax as well as supporting, inspiring and educating clients to love and understand their numbers by meeting with our clients on a regular basis,” says Rickaby.

“It sounds a bit more interesting than being just an accountant, let’s face it! You really don’t want the eyes glazing over or being avoided!”

15. Always take up the offer of a drink

“It doesn’t have to be alcoholic,” says Dr Jane Cox, “but having something casual in your hands makes you seem more laid back and approachable.”

16. Be yourself

“It is so easy to slide into a conversation if you seem friendly, approachable and confident,” says Dr Cox.

“Have a game plan of five interesting things you could talk about that would set your business ahead of others in your field. People remember the unusual and unexpected.”

17. Make the first move

It tends to put you at a favourable advantage,” says Dr Cox. “Most people feel at least as uncomfortable as you do and are always grateful if you’re the one that approaches them and breaks the ice with them.”

18. Always have your business cards to hand

Before you set off to your networking event, ensure you have your business cards and put them in a place you can easily reach such as a pocket – this will avoid a flustered search through your bags, says Liz Cartwright, MD of Cartwright Communications. 

19. Don’t huddle with your colleagues and clients

If you’re attending a networking event with colleagues it can be tempting to stay in your comfort zone and only chat to them, or your clients, says Cartwright.

Step away, go in pairs or go it alone and regroup at the end of the event.

20. Prepare your elevator pitch

Have five key points about your business within your elevator pitch:

Who you are, what you do, where you’re based, how big the business is, and which of your clients are relevant to the contact you’re talking to.

And finally, never dismiss anyone as unimportant.

“Make it your mission to discover the value in each person you talk to,” says Liz Cartwright. Ask questions and listen with interest. Don’t make the mistake of discounting people due to a job title. “Someone you meet may be in a junior role, but they could have valuable connections or knowledge you’ll never hear if you dismiss them.”

If you’re an AAT member, the perfect place to perfect these 20 tips is AAT’s annual conference, taking place between 13 -14 June 2019.

Preparing your business for a crisis

Posted by & filed under Run your business.

According to Deloitte, half of businesses don’t have a crisis management plan.

What procedures should businesses have in place in the event of a serious accident or incident at work?

These occurrences could range from a cyber attack to a fire, flood, the death of a key person in the business, or a sexual harassment charge. We explore the questions you should be asking yourself with regards to different scenarios and steps for prevention and protection against incidents.

Do you have a crisis management plan in place?

If an unexpected event or one harmful to your business were to occur, would everyone in the business know what action they should take? When planning, focus on the root causes and possible prevention techniques instead of just the possible outcomes.

Is all your data secure?

Is all your valuable, personal and private information stored in secure, password protected places, adhering with GDPR laws?

Working towards becoming a paperless business with all your data stored securely and backed up online will go a long way to ensure this.

Train your employees on the importance and implications of the security of your data, being especially aware of things like when they’re working remotely or when they need to share data, that they are doing it in the correct way.

If your premises were affected would you be able to relocate quickly?

Creating a flexible working environment.

Is your team able to work from anywhere if for some reason your premises was unexpectedly damaged or not accessible? Again, moving systems online can help protect you against a loss of time working or trading were your place of work to be damaged or the access to it restricted.

Could you respond to a medical emergency?

All staff members should be trained what to do in a medical emergency – how to call for help and where to give as an accurate location.

They should also know who any medically trained staff are and where any equipment like first aid kits and defibrillators are kept and how to use them. Consider sending team members on first aid courses.

Could you cope without a key staff member?

It’s the old classic about “being hit by a bus tomorrow” but of course, something like that could tragically happen. If the owner of the business or any other member of staff were to leave suddenly, would you be able to access their work and would processes and plans that they’ve put in place still be able to function?

If the answer is no, then action should be taken to share information and make sure that no one person is bigger than the business.

Are you prepared for the press?

Social media and online news outlets can spread bad news very quickly.

It’s best to be prepared if the worst happened, with PR crisis management plans in place, a clear chain of command, and a strong designated spokesperson.

AAT’s Media Relations Manager, Adam Harwood says, “You should have the contact details for senior members of staff, so that if a crisis happens outside of working hours, you know who to call.

Also, make sure your business is in a position to respond, as ‘no comment’ never reads well in press. So having a holding statement in place, can help you.

And finally, be prepared to be contrite.”

12 steps to effective incident management

  1. Perform risk assessments on all potential incidents to understand threats and the possible business impact.
  2. Invest in prevention where you can.
  3. Encourage employees to identify operational vulnerabilities.
  4. Purchase relevant insurance for protection against loss.
  5. Develop plans, contingencies and policies.
  6. Define roles and a clear chain of command in a crisis.
  7. Train all your staff.
  8. Secure and back up all valuable, private and personal data.
  9. Make sure you have clear channels of communication between all stakeholders – before, during and after an incident.
  10. If a crisis occurs, put your plan into place and take decisive action.
  11. Update everyone involved often and honestly using your assigned spokespeople.
  12. Revisit your risk assessments, crisis management plans and training regularly.

What insurance cover should you have ?

Make sure you have all the relevant types of insurance for your business, these could include:

  • Building and contents insurance
  • Employers’ liability insurance
  • Public liability insurance
  • Product liability insurance
  • Professional indemnity insurance
  • Business interruption insurance
  • Legal insurance

Preparation really is the key to crisis management. No one ever thinks it will happen to them until it does.

But thinking about how incidents could affect your different stakeholder groups, buying the correct insurance and having a plan in place for what to do if they do occur, could be the key to your survival.

Study tips: Posting the cashbook – processing bookkeeping transactions

Posted by & filed under Foundation Certificate, Students.

Understanding & posting the cashbook series (AAT foundation level)

This is the second part of our look at the topic of transferring data from a cash-book. 

If you missed part one, it would be worth having a quick read before continuing, as it focused on understanding the cash-book in preparation for thinking through the postings required.

If you recall our scenario is based on a small VAT registered company called E&J Consultancy. They have a cash-book which is both a book of prime entry as well as part of the double entry bookkeeping system. 

The totals of the columns in the credit side of the cash-book at the end of the month are:

 

What do we already know?

  • That we’re working with the credit side of an integrated cash-book.
  • There’s a column for payments made using cash (Cash) and a column for payments made directly out of the bank account (Bank).
  • We deal with both cash and credit transactions.
  • That as it’s an analysed cash-book, the analysis columns explain the purpose of the expenditure and separate any cash transactions into the NET and VAT amounts.

Okay, now that we’ve re-capped our understanding of the cash-book a little, we can think about what entries are required in the general ledger.

The first question we might ask ourselves is…

If I were doing the ‘T’ accounts, what would the postings be?

Shown like this, we can clearly see that we are posting the totals of the analysis columns to the opposite side of the general ledger accounts. 

Sometimes we may be asked to state what needs to happen, rather than to actually do it. If this were the case, we could use the information from our ‘T’ accounts and it would look like this:

Before we go any further, let’s supposed this was a non-integrated cash-book and think about what the postings would be then. 

The only difference is that the cash-book is just doing one job now i.e. being a day-book. Therefore we need to post to the Bank account in the general ledger as well as all the other general ledger accounts.

There would now be five entries required in the general ledger, which would be:

This looks like a journal now and your total debits should equal your total credits.

Returning to E&J Consultancy’s integrated cash-book, let’s suppose one of the bank payments to trade payables was to Shipmans & Sons for £560.

Our thought process here then, starts with the question…

Why have I just paid Shipmans £560?

Simple answer… because we owed them £560.

Which begs the question – what effect does the payment have on our accounts? 

It reduces the amount now owed to Shipmans & Sons.

Okay, but are we going to enter a debit or credit?

Well that’s a bit more complicated, the amount we owe Shipmans is recorded in their account in the purchase ledger.

It’s there because of a memorandum posting from the PDB, made when we bought something from them a while ago. The memorandum posting isn’t double entry but is a repeat of the posting made to the PLCA.

The PLCA was credited with the invoice amount, so Shipmans account would have been credited too. Now that we’ve paid Shipmans we need to debit their account to reduce the balance.

Is there a simpler way to remember all that?

Yes, learn that whatever you do in the PLCA needs to be repeated in the individual supplier’s account in the purchase ledger i.e.:

  • Post to the same side
  • Use the same reference
  • Always post the VAT inclusive amount.

So, we just need to check what we posted to the PLCA in the general ledger as the debit there should be repeated in the purchase ledger, just using the supplier’s name and the invoice total, like this:

In summary

Good luck working with cash books.

Just keep in mind that cash book layouts vary so what is important is that you can understand how the cash-book works in relation to the rest of the accounting system.

Learn to use debits and credits to increase and decrease accounts, and then you can apply the theory to any manual layout and transfer your understanding to computerised systems too.

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Loneliness at work: a psychological construct?

Posted by & filed under Career.

The onset of the digital age has brought with it many brilliant things – flexible working, automatic payroll systems and the ability to hold virtual meetings anywhere in the world.

It has also, however, become increasingly easy to communicate solely through email and hide behind ‘virtual curtains,’ which can leave us feeling lonely and disengaged.

If you don’t feel lonely are you still lonely?

A recent study, the Workplace Loneliness and Job Performance report, a survey of 672 employees and 114 supervisors, published in December 2018, found that loneliness depended largely on a person’s outlook or perspective.

The report’s co-author, Professor Sigal Barsade from The Wharton School, University of Pennsylvania, says that loneliness is, essentially, a “psychological construct” and that people can be just as lonely in a busy office, surrounded by colleagues, as they can working from home. “Loneliness is a self-constructed assessment that an individual makes, based on their own psychological and social needs,” she notes.

Furthermore, an employee didn’t need to have a large group of colleagues to connect with and prevent them from feeling lonely. Just one co-worker who they had a good bond with could be enough to stave off loneliness.

“Self-reinforcing”

One of the main issues is that loneliness was found to be what Barsade describes as “self-reinforcing,” that is, it can become ‘the norm’ and can make people become sensitive, distrustful and socially inept.

“The paradox is that people who are lonely are often the ones who seem the most aloof and least likely to reach out to others,” she says.

They are also less likely to feel engaged at work, which can affect their performance and wellbeing. “The greater the sense of loneliness, the lower the performance and the more likely the employee is to take time off sick,” says Barsade.

How employers can help

So what can small businesses do to prevent their employees from feeling lonely and disconnected from their colleagues and the company?

Carl Reader, chairman of d&t accountancy and business advisory firm, says loneliness can be a very tricky area for small businesses to manage, especially as they may not have a dedicated HR team to help them.

“There are a combination of factors that need to be looked at – workplace behaviours, team cohesion, and general mood. If a business suspects through these observations that there may be an issue, they can then look to address it accordingly,” he notes.

Creating a inclusive workplace

The first step, Reader says, is to identify the problem then try and create a more cohesive and inclusive working environment. “One of the things that we deliberately do is mix up teams – so that staff members can get to know other people than just the people that they were ‘given’ when they joined,” he notes.

They also run a number of staff events, from after-work drinks to dragon boat racing, to help employees connect with each other. “We encourage activities such as fantasy football leagues and running clubs, and also try to ‘matchmake’ in away days and team meetings,” Reader says. 

Keeping employees on top of company issues and stakeholder analysis can also help them feel more involved with the company, according to Reader. “Staff engagement is inherently linked to the feelings that people have when they come to work, so it is important that staff are at the top of any ‘stakeholder analysis,’” he comments.

“We also use an anonymised service from a company called Workbuzz to help us review our engagement levels every six months.”

Smaller teams for stronger wellbeing

The report helps them indicate what steps can be taken to boost employee engagement levels. “One step that we have taken is to reorganise our business into a ‘pod’ structure of much smaller teams, which has helped team members understand the impact, both good and bad, that they can make,” Readers says.

Rob O’Donovan, co-founder & CEO of CharlieHR consultancy, says making sure you let employees know that you care about their wellbeing is also important. “When building and growing a company, focusing on people is the most important thing managers can do,” he says.

“We try and encourage are employees to take adequate rest during winter – and don’t use all their holiday up over summer – as well as providing time, space and encouragement for them to focus on their wellbeing.”

James Routledge, co-founder of Sanctus mental health consultancy, says small businesses can help stave off loneliness by creating an environment where employees can talk about things freely and without judgement.

“The biggest thing companies can do is to create an environment where stress and mental health is talked about openly – that can be a huge relief in itself,” he notes. “There’s no quick fix but a long-term commitment to reasonable working hours and open dialogues on mental health and feelings can make a huge difference to an individual’s overall health.”

What kind of learner are you?

Posted by & filed under Study tips.

When it comes to learning we react in different ways to different techniques.

Whilst books and text suit some individuals others are likely to learn better though lectures, audio recordings or face to face interaction. The key to effective study is to find what works best for you.

Technically, your learning style refers to the preferred way in which you absorb, process, comprehend and retain information. Everyone learns differently and that’s why it is so important to have access to a range of resources when studying – not everyone can get by with just books. Identifying your learning style can provide a huge boost to your studies and ensure you get the most out of your study time. The key learning styles can be broken down into the following categories:

Visual

If you prefer to use pictures, images, diagrams, colours, and mind maps to take in information then you could be a visual learner and can benefit especially from videos explaining key accounting concepts and interactive quizzes to test your knowledge.

Aural

If you favour learning through listening then you might be an aural learner and would benefit most from tutor led classes, whether that is through live online classes or audio recordings to catch up on or classroom study.

Verbal

Do you like to write down your notes and also speak to others about what you are learning? Then you could be a verbal learner, retaining information best when you read your notes aloud to yourself. Verbal learners prefer to learn through reading case studies and e-books or telling others what they have learned in student forums or study groups.

Social

Do you prefer learning in groups and heighten your learning by bouncing your thoughts off other people? Then the ideal study option for you could be the online tutor group study method combining the flexibility of online learning with the supportive nature of classroom study, providing a structure to progress through your course with a group together. You will benefit from a supportive group environment, motivating each other throughout your course.

Individual

Do you prefer to learn alone through self-study and feel you can motivate yourself? Then you could be a solitary learner. Self-paced study could be ideal for you, study at your own pace and get qualified as quickly as you want to.

Some topics will naturally lend themselves better to certain styles and a combination of multiple styles can help to solidify a good grasp of the subject.

The benefits of studying online include an approach that encompasses a plethora of learning styles, including videos, reading, audio, exercises, social forums and study buddies, making it a great way to discover which method works best for you.

It is important to keep in mind that each style has advantages and disadvantages and there is no right or wrong learning method. Your individual style is not supposed to restrict you, but to help you get the most out of your efforts.

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MTD for VAT a huge challenge or a wonderful catalyst for growth?

Posted by & filed under Making Tax Digital.

This month, most businesses above the £85,000 VAT threshold would have filed their tax digitally, using HMRC compatible accounting software.

Making Tax Digital (MTD) is part of the Government’s plan to create a digital Britain. MTD for VAT will solve the issue of costly filing mistakes and enable HMRC to better track tax payments.

“Despite impacting 1.1 million small businesses in the UK today, our research shows that a third of UK SMEs are not aware of MTD,” says Damon Anderson, Director Partner and Product UK & EMEA at Xero. “What many business owners also don’t know is if they fail to comply, they will be faced with fines.”

The MTD rules

The Making Tax Digital rules apply from the first VAT period starting on or after 1 April 2019. A ‘VAT period’ is the inclusive dates covered by a VAT Return.

“If you haven’t already got your clients ready for MTD, there is still time,” Mr Anderson says. “The simplest way to file your tax digitally is to partner with a HMRC MTD for VAT implementation partner like Xero. These are the software providers that are compatible with HMRC’s tax-filing platform.”

There are some exceptions. Non-for-profit organisations or trusts have a further six months, before they need to start keeping digital tax records.

“If taxable turnover drops below the VAT registration threshold at any point after 1 April 2019, a business is still required to continue to keep digital records and send HMRC their VAT returns using MTD-compatible software,” he says. “This obligation doesn’t apply if the business deregisters from VAT or if they are exempt from MTD for VAT.”

Making your clients familiar

Your clients will need to get used to filing digitally. All VAT registered businesses must keep and preserve certain records and accounts.

“Under Making Tax Digital some of these records must be kept digitally within functional compatible software. Records that are not specified in this notice, or that are not required to complete your VAT Return, do not need to be kept in functional compatible software,” he says. “Ditch the pen and Excel spreadsheet, the sooner you get used to cloud accounting technology the better. “

How digitisation is impacting the accountancy profession

Damon Anderson believes that MTD for VAT is the catalyst for large-scale digitalisation and smarter technology adoption.

“This will change the way accountants work,” he says. “It’s going to eliminate the need for repetitive manual bookkeeping tasks, freeing up accountants to offer more advisory services.”

The transparent and immediate nature of digital technology may also mean that accountants may find themselves working in real time on the same financial document as clients.

“This is a major shift, as we see more and more accountants use the latest technologies which enables them to shift from being number crunchers to business advisors,” he says. “MTD for VAT will usher in a period of technical and cultural change, but with the right preparation and software, the legislation can be an opportunity for accounting professionals to skill-up and embrace the digital future.”

An opportunity to help business and clients

Wendy Rowe, Director Tax & Accounting, Wolters Kluwer UK, says that companies which are already using digital bookkeeping or accounting software won’t have to make many changes, but those that are keeping manual records will need to look at their options.

“Accountants need to be having these conversations with their clients,” she says. “Some SMEs that may not previously have used accountancy services may decide that now is the time to use one. It is an opportunity for an accountant to help clients because new regulatory changes such as MTD will change the role of the tax adviser.”

She suggests that the role of the accountant will change as it switches to more of an advisory role, with the accountant playing a key part in the profitability and growth of the business.

“If companies embrace digital it reduces the risk for them and enables them to engage better with their accountant,” she says. MTD will mean companies need to contact accountants for help, and this opens up new opportunities.

“An accountancy practice can look at how to serve clients better, and what additional services can be offered to clients to add value.”

 The role of a trusted adviser

Jon Wrennall, CTO at Advanced, says financial management in small companies and SMEs is just as important as it is in larger organisations.

“They too face the daily pressures of running a business, not to mention making contingency plans for the never-ending discussions around the potential impact of Brexit – all of which has the ability to influence to the bottom line,” he says. 

As Making Tax Digital (MTD) came into effect on 1st April, there is also the danger that further strain will be put on SMEs’ time and attention.

“Some are not ready and, more worrying, some don’t even know if it applies to them,” he says. “Our recent Trends Report shows that just 57% of UK organisations are prepared for the new regulation and more than a third (35%) admit that they don’t know.”

New opportunities for company success

The role of an accountant is therefore integral for lifting the load on financial management so SMEs can focus on adding value to the business.

The accountant must not only be able to provide what’s expected of traditional accountancy, but business advice as well.  This changes the relationship and gives accountants an opportunity to become integral to a company’s success.

“They should be able to provide guidance on a range of issues from how to set up book keeping and submit a VAT return digitally right through to ways to protect themselves from fraud – something which is ripe among SMEs,” he says.

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