How to improve your wellbeing if you’re self-employed Posted 08/03/2018 by Georgina Fuller & filed under Career. A recent report by the Centre for Research on Self-Employment (CRSE), entitled ‘The Way to Wellbeing’, measured self-employed people’s overall satisfaction and wellbeing, based on various aspects of their lives – including jobs, income, health, family life and leisure. Its key recommendations included creating a more appreciative culture where business failures are embraced as part of entrepreunrial life, and ensuring better and quicker access to mentoring and training for start-ups to help reduce stress and improve confidence. The CRSE also recommended creating more co-working spaces to combat the isolation felt by so many self-employed people and improving their long-term financial sustainability by encouraging the DWP and pension providers to introduce financial products for the self-employed. There are also a number of small, daily changes self-employed people can make to improve their wellbeing and confidence. Here are our top tips. Exercise Susan Gafsen, co-founder and director of Pep & Lekker, a natural food company, says getting out there and exercising first thing is the best start to the working day. “The time I would otherwise have spent commuting I now exercise. This refreshes and sets me up for the day, so I don’t feel guilty about it.” Set clear boundaries Setting boundaries between work time and family time also helps. “It’s very easy to work 24/7 when you’re running your own business but I always try and set aside time for our family dinner in the evening,” Gafsen notes. “This is a priority as you need the support of family and friends to remain grounded.” Gafsen believes it’s important to enforce a social media curfew too. “I try not to look at my emails or social media after 10pm so there is time to unwind before bed,” she says. Talk to people who get it “As supportive as your friends will be no matter what they do, sometimes it helps to turn to someone who’s in the same position,” Ellen Manning, freelance writer and blogger, says. “Find people who also run their own businesses or work for themselves and do it in a similar way to you. That way, they already know some of the pitfalls and can commiserate, advise and generally ‘get’ what you’re going through. Feeling like there’s someone there who understands is absolutely invaluable when it comes to your mental and emotional wellbeing.” Outsource Mentor Nicola Van Dyke says it’s important to allow yourself to be supported in any areas you’re not an expert in. “Wasting frustrating hours on figuring out a technical issue on your website is pointless. Invest wisely in support so you can concentrate on doing what you do best. Your passion is your power!” she notes. Set your own hours Geraldine Joaquim, founder of Mind Your Business wellbeing consultancy, says: “The 9-5 is a rather out-dated framework which came into being during the industrial revolution, and in today’s modern world it doesn’t necessarily suit people’s lifestyles.” Instead, self-employed people should make their work day fit around them. “You could try making some changes to suit you – perhaps taking a break between 3 and 6 to spend time with the children and then spending a couple of hours in the evening or getting up early to get a couple of hours work in before the school run,” Joaquim advises. Stop multitasking “This is a common issue whether you’re self-employed or not,” says Joaquim. “We often have several jobs on the go: that email you started this morning, the blog you need to finish, the bank statement you were checking. But this constant switching of attention is ineffective.” Joaquim believes it’s a misconception that we can multitask. “In fact we can only focus on one thing at a time but we have become adept at switching that focus. This actually exhausts our brains and leaves us feeling tired and like we haven’t achieved very much at the end of the day.” Take a break Taking short breaks throughout the day should help you stay motivated, according to Joaquim. “Our brains are designed to rest every 90 minutes or so, so that we can process the things we have experienced or learned,” she says. “Most of us are familiar with that sensation of ‘zoning out’ for a time (usually when we’re driving from A to B and don’t remember the journey!), that’s the brain doing it’s processing. When we don’t allow the break, we push it into our sleep period which can end up overloading us and lead to broken sleep patterns. Taking the dog for a quick walk or going to make a coffee is an ideal break – as long as you leave your mobile behind!”
The benefits of keeping up to date with your CPD Posted 08/02/2018 by Marianne Curphey & filed under Career, CPD, Students. Continuing Professional Development (CPD) can improve your employability, enhance your chances of being given more responsibility or a promotion, help leverage a pay rise and increase your overall potential. It can also improve the performance of the business you are in, because you and your colleagues will be continually learning and refreshing skills – something which is vital in today’s fast moving environment. In line with other professional organisations, AAT requires members to show evidence of CPD and to take the opportunity to add to their knowledge. “CPD is important for individual members to keep their skills up to date, especially with all the new legislation that the industry is subject to,” says Jonathan Stocks, Benefits and Services Manager (Members) at AAT. “It’s really vital to keep up with the massive technological changes that are happening, and to be able to demonstrate your professionalism and your knowledge.” AAT’s policy on CPD is one of quality, not quantity, and is based on individual members setting themselves goals, rather than having to attend a set number of hours of training on an annual basis. The impact on your employer “If everyone is committed to CPD then that will help the company they work for on a professional level,” Mr Stocks says. “On a more personal level, it can lead to greater job satisfaction and an opportunity for you to control your career direction.” When thinking about how to structure and choose your CPD you should first reflect on what skills you want to develop. It is not just about attending external courses, although these can be very helpful. There is also a lot you can do online and in the workplace, and surprisingly, you may already be doing a lot in your job that will contribute towards your CPD. “CPD is a way for members to demonstrate to employers that they are competent and continually developing,” says Mr Stocks. “From the AAT’s viewpoint, there is a responsibility for us to ensure that anyone who uses the services of an AAT member is sure that they are competent and are refreshing their skills and knowledge on a regular basis.” How CPD works AAT has a mandatory CPD policy for its 50,000 members, most of whom are qualified accountants, with a growing number of bookkeepers joining the organisation since they were given the option to do so two years ago. Of these, 4,500 individuals are licensed to run accountancy firms or provide bookkeeping services to public, usually on a self-employed basis. What CPD means to members Paul Smith FMAAT, is a Licensed member and runs his own business Paul R Smith Ltd, from Halifax and Florida. “I specialise in SMEs, and do everything from bookkeeping, payroll, tax and income. An SME can come to me and I will sort out everything that they need. I divide my time between the UK and US and always make sure I attend the local programmes when I am in England so that I am up to date with my professional skills.” “The AAT is the only organisation I use for my CPD because I can use the online resources and podcasts for information, and I always attend the tax updates run by my local branch,” he says. “I find these local events very useful, friendly and great for networking. Everyone knows me as I have been going since I set up my own business in 1999. It is a good way to get to talk to others in the same profession and swap tips and ideas.” AAT recommendations for planning your CPD “Our policy is output-based so we don’t specify that you have to do a set number of hours,” Mr Stocks says. “Instead it is more about the outcomes relative to the objectives you have set yourself in professional terms.” The policy, which is currently under review, will be updated next year, and any changes that might take place will be communicated to members in October. The four-step plan recommended by AAT is: Assess your needs on a professional level Plan what you are going to do Take action Take time afterwards to evaluate Members should fill in details in their CPD record online via the AAT. A number of accounts are selected at random and are audited and monitored to ensure that standards are being met. “We get a lot of questions about what counts as CPD,” Mr Stocks says. “The traditional thinking is that it has to be professionally paid for leaning and courses. This is not always the case – there are lots of options.” Work-based learning This is development which happens in the workplace and could include: Coaching and mentoring Being part of a committee Shadowing Supervising Being an examiner or tutor For many members, this type of CPD will be something they will do on the job, as part of their upskilling, and counts as learning. Professional activity This covers formal education and paid for courses. It also includes attendance at the AAT Annual Conference and the programme of 60 CPD events run every year exclusively for members. You can find out more information about these events through the newsletter, direct mail, social media and on the AAT website. Then there are the 300 programmes run by branches around the country. These are local programmes for local AAT members and are free thanks to funding from AAT. Topics include payroll and pensions updates, budget and tax updates, wills, probate and trusts. The schedule always includes a mix of technical accounting skills and softer skills such as developing leadership potential, networking, communication and influencing. There are also niche sessions on subjects such as farm accounting, forensic accounting and technology tutorials on software such as Xero, Sage and cloud accounting. Other popular subjects include Making tax digital, and sessions on the legislation surrounding money laundering, and, in the future Brexit. “Your personal CPD might be a combination of attending branch events and engaging in e-learning,” says Mr Stocks. “It is a focus on quality rather than quantity – even if you are doing one thing make sure that it is necessary, relevant and useful.” Studying for a relevant a qualification outside of AAT would also class as a professional activity. Online resources There is a wealth of e-learning modules on tax, financial reporting, payroll and other relevant subjects on the AAT member website. Members can make use of webinars, articles, podcasts, blogs and the magazine to access information about a range of technical and non-technical subjects. At present, you’ll need to record all your CPD activity yourself. In the future there will be a system in place to ensure that any ongoing learning and CPD is logged and automatically transferred to your record. “It’s about remembering to update your CPD record and knowing what counts,” says Mr Stocks. “Get into the habit of doing it little and often. People are often doing CPD without even realising it, especially if they have taken on a new project or responsibility in the workplace.” Read more on how to make an impact with your continuing professional development; What is CPD and why is it important for your career? CPD for AAT Members: What counts as CPD? How can finance managers develop their employees?
Study tips: How to apply active verbs at Level 3 Posted 08/01/2018 by Gill Myers & filed under Advanced Diploma, Students. Accountancy is at the centre of any business. So it’s essential that you can communicate financial information clearly and appropriately to a variety of audiences. Including those who have little or no accounting training or experience. Good written communication skills are essential when we start working in the sector, and become even more so as we progress. In fact, as we learn more complicated accounting skills and techniques, the ability to communicate them to others becomes a bigger challenge as the gap between their understanding and ours widens. Therefore the effort we put into developing our communication skills has to match the work we do to increase our accountancy expertise. In our Level 2 article on active verbs, we covered the most common command verbs: identify describe and explain. These are still fundamental at advanced level, but are now supplemented by: analyse compare discuss and recommend. So, let’s look at what exactly these mean: Analyse Separate information into separate parts and identify their characteristics. For example: You may be asked to analyse a statement of profit or loss. Your answer could be: A statement of profit or loss (SoPL) shows a business’s income less its expenses, for a given period, and calculates either a profit or a loss. It is separated into two sections. The top part, or trading profit or loss, shows the net sales revenue plus any other income, less the cost of sales and calculates the business’s gross profit. The cost of sales is a sub-calculation within the trading section that calculates the cost of generating the sales income in accordance with the accruals concepts. It adds the value of any opening inventory to the net purchases and then deducts any closing inventory, as this is yet to be sold. The bottom part of a SoPL lists and totals the value of all the business’s allowable expenses, such as rent, wages, stationery and depreciation. The total expenses are then deducted from the gross profit in order to calculate the business’s net profit, if more income has been generated than expenses incurred, or net loss if expenses exceed income. Compare Identify similarities and differences between at least two given things (items/sets of results/situations). For example: You could be asked to compare the statement of profit or loss with the statement of financial position. In this case, your answer could be: The statement of profit or loss (SoPL) and the statement of financial position (SoFP) are both financial statements that are produced in line with financial report standards. They are a mandatory requirement for limited companies, but are also often produced for sole traders as a matter of best practice. Both statements are produced from a trial balance with all the ledger balances being included on one statement or the other. The statements in effect come as a pair but the purpose of each is quite different. The SoPL incorporates all the income and expense accounts for a given period of time in the past, and calculates the profit or loss for the period. On the other hand the SoFP is a snapshot in time that shows an organisation’s worth on the day it was produced, by deducting assets from liabilities. The two statements are linked by the profit or loss that is calculated on the SoPL as it is also the balancing figure in the financed by section of the SoFP. Discuss Give an account or response that considers a range of ideas or arguments (for and against) to come to a conclusion, showing a balance of thinking. For example: You might be required to discuss the benefits of payback periods as a long-term investment appraisal technique. Be aware that even though the question only refers to the benefits, in order to ‘discuss’, you need to include a range of ideas or arguments and therefore would also have to consider the disadvantages. Your answer could be: Calculating the payback period of a long-term investment is a straightforward way of seeing how long it will take for its initial capital cost to be recouped. The calculation is based on the estimated cost of the investment less the expected yearly net cash flows. The shorter the payback period the better. The main advantages of calculating the payback period are firstly that it is simple, and secondly, easy for those without any accounting knowledge to understand. However, the fact that it is simple is also a disadvantage as it does not take the time value of money into consideration and it also excludes any cash flows after the payback point. Therefore, payback periods are suitable to be used as an initial step in an investment’s appraisal and if the period is acceptable to the organisation, then more sophisticated techniques, such as discounting the cash flows and calculating the net present value and internal rate of return, can be performed. Recommend Suggest or put forward a preferred option/solution/course of action with reasons why. For example: You might be asked to recommend which, out of a choice of long-term investments, should be selected from a financial point of view. You will have to imagine the options and appraisal results but your answer might be along the lines of: Having appraised all of the long-term investments under consideration, option B should be selected from a financial point of view. This is because it meets the organisation’s criteria for payback periods, a positive net present value (NPV) and internal rate of return (IRR). A couple of the other options also fulfilled these requirements but option B’s payback period is the shortest, its NPV is the highest and its IRR is the most in excess of the organisation’s required minimum. Communicate efficiently & effectively We said in the first article that being clear about what we’re being asked to do is the first step to good communication. We also used BUG to help ensure we include everything in our written communication that is required. To refresh your memory, BUG has 3 steps to help ensure you’ve understood the whole question: Box the active verb Underline the key points Glance back over the question to ensure nothing is missed or misinterpreted. Now we need to consider who we’re communicating with and what structure our words should take. Over the course of this week I have communicated with clients, colleagues, suppliers, managers and customers. I have written formally and informally, using a range of structures from scribbled notes on a pad next to my computer, to emails, social media posts, a report, lots of texts and this blog. Sometimes the words flow easily and you know the person who is going to read them will understand not only the actual words but the essence and feeling behind them (emojis help obviously but are reserved for personal rather than professional communication!). On other occasions, trying to find the right words or correct turn of phrase is really hard and you end up reading and re-reading your sentences, changing a word here and there, so that you refine what you’re saying to ensure that what is read is understood as you meant it to be. Communicating your understanding of accounting knowledge and concepts is challenging, therefore: Be clear about what actives verbs mean Use BUG to ensure your answer is complete. Think about who you’re communicating with: is it appropriate to be informal or formal? should you be using technical words? How much will your reader understand and how much should you explain? Use the right structure. Have you been asked for a report, email or notes? Re-read and if appropriate change your words. Practice. In summary Following the steps above will help ensure that those reading your work will actually understand what you’re trying to communicate. This is because it will be accurate, well thought-out and easy for them to read. And it won’t reveal how difficult it was to compose, as good writing often is! although it probably will have been hard for you to compose as good writing often is! Read more on Advanced Level in Accounting: Why students fail assessments Take AAT’s free Writing Skills e-learning module Understanding your assessment questions Browse the full range of AAT study support resources here
Amendments to FRS 105 Posted 07/31/2018 by Steve Collings & filed under Financial accounting and reporting. The Financial Reporting Council (FRC) issued revised Financial Reporting Standards (FRSs) in March 2018 which incorporate the amendments made from the first triennial review of UK GAAP. It is likely that further comprehensive reviews of the FRSs will be carried out every four or five years. However, where there is an emerging issue (or multiple issues) which the FRC view as being of an urgent nature, it is likely to be dealt with outside the review cycle as a separate project. Why have there been significant amendments ? The majority of the amendments arising from the triennial review are mandatorily effective for accounting periods starting on or after 1 January 2019 and such amendments mainly affect FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland. However, FRS 105 The Financial Reporting Standard applicable to the Micro-entities Regime has seen some quite significant amendments as a result of the triennial review. This is due, in large part, to the fact that micro-entities in the Republic of Ireland can now use the standard for accounting periods starting on or after 1 January 2017 following amendments made to the Companies Act 2014 by virtue of the Companies (Accounting) Act 2017. Early adoption of FRS 105 is permissible for Irish micro-entities, provided that the Companies (Accounting) Act 2017 is applied from the same date. It should be noted that Irish micro-entities are required to make far more comprehensive disclosures in their financial statements than UK micro-entities. To that end, Irish micro-entities must have regard to Appendix B Company law disclosure requirements for micro-entities in the Republic of Ireland to Section 6 Notes to the Financial Statements of FRS 105 which sets out the legally required disclosures. It should be noted that Appendix B to Section 6 is an integral part of the standard. UK micro-entities are required to follow the disclosure requirements in Section 6, Appendix A Company law requirements for micro-entities in the UK. Again, Appendix A is an integral part of Section 6. Effect of the amendments on UK-based micro-entities For micro-entities based in the UK, there is less in the way of ‘significant’ change. However, there are additional disclosure requirements that have been brought into FRS 105 (March 2018) and which apply to accounting periods commencing on or after 1 January 2017 (i.e. from 31 December 2017 year-ends onwards). The importance of complying with these additional disclosure requirements cannot be over-emphasised because failure to do so will mean the micro-entity’s financial statements do not give a true and fair view. For UK micro-entities, there are two additional disclosure requirements which must be made at the foot of the micro-entity’s balance sheet as follows (references to ‘the Act’ mean the Companies Act 2006): information about off-balance sheet arrangements as required by section 410A of the Act; and information about employee numbers as required by section 411 of the Act. The additional disclosures are a legal requirement and hence should have been included in financial statements for periods starting on or after 1 January 2016. However, they were omitted from the July 2015 edition of FRS 105 and hence, technically, all micro-entities should have been making the above disclosures for periods commencing on or after 1 January 2016, but the majority have not been doing so. The disclosures in respect of off-balance sheet arrangements and employee numbers were included as a result of the amendments by The Companies, Partnerships and Groups (Accounts and Reports) Regulations 2015 (SI 2015/980). SI 2015/980 made amendments to sections 410A and 411 of the Companies Act 2006 by removing reference to the phrase ‘In the case of a company that is not subject to the small companies regime’. The removal of this phrase meant that all companies must disclose off-balance sheet arrangements and employee numbers. The two additional disclosures are in addition to disclosures required in respect of: advances, credit and guarantees granted to directors as required by section 413 of the Act; and financial commitments, guarantees and contingencies as required by regulation 5A of, and paragraph 57 of Part 3 of Schedule 1 to, the Small Companies Regulations. Section 396 Companies Act individual accounts of the Companies Act 2006 requires additional information to be disclosed in the financial statements by virtue of sub-section A1 which requires the micro-entity’s financial statements to state: the part of the UK in which the company is registered; the company’s registered number; whether the company is a public or a private entity and whether it is limited by shares or by guarantee; the address of the company’s registered office; and where appropriate, the fact that the company is being wound up. In respect of point c) above, Section 396(A1) makes reference as to whether the company is a public or a private entity. Micro-entities can never be public entities (public companies are beyond the scope of FRS 105) and hence they will always be referred to as a private entity. Make sure you understand the full impact of the amendments It is important that AAT Licensed Accountants fully understand the amendments to FRS 105 and the fact that they are effective for periods starting on or after 1 January 2017 (i.e. from 31 December 2017 year-ends onwards). Please check that financial statements produced using accounts production software programs have correctly included the disclosures where the year-end is 31 December 2017 onwards. If you are required to update your software to cater for these changes, then you are strongly advised to do so. Out of date software programs will invariably mean the financial statements they produce will be technically out of date. It must be borne in mind that if the micro-entity does not prepare its financial statements in accordance with the requirements of company law applicable to the micro-entities’ regime, the presumption that the financial statements give a true and fair view will not apply. The presumption that the financial statements give a true and fair view will only apply where the micro-entity prepares its financial statements in accordance with the legal requirements. Hence, to avoid any mistakes being made in clients’ financial statements, it is important to understand the impact that the amendments will have on the financial statements.
Doing business with the new generation of entrepreneurs Posted 07/30/2018 by David Nunn & filed under Run your business. Millennials appear ready to take on the world. If they succeed, they could provide bookkeepers and accountants with a source of clients for years to come. It is a well-known fact that start-ups are a crucial source of new business leads for accountancy. What is less appreciated is that the founders of new business are likely to spring from the millennial generation. This is the conclusion to be drawn from new research funded by AAT for its business advice portal, Informi. The survey shows: 50% of millennials want to start a business. For 35% of millennials it’s a life goal to start a new venture. Great work life balance is the main motivation. The survey sampled opinions 2002 adults, across four generations, comparing their attitudes towards starting a business. Millennials (those aged 23-38) emerged as much more likely to start a business than Generation X (38%) or so-called baby-boomers (20%). And their favoured industries to start a new business are: Retail sector – 35%. Education – 12%. Healthcare – 8%. So, if millennials are likely to be an important source of future business, you should take steps to understand their needs and motivations and consider ways to align your business with them. Here are 5 insights to get your started. 1. Millennials want to make a difference Millennials want their work to have meaning. They are hopeful that businesses and business leaders can help to change the world. Accountants and bookkeepers need to show you are in tune with their thinking by talking about your own vision of working towards a better world. Millennials don’t necessarily warm to brand authority. They are more likely to respond to firms that reach out to them in a friendly manner and talk to them on a personal level. They like messages that are genuine, mature, humble and sociable. 2. Millennials rely on relationship Millennials research purchases meticulously. 75% like to see opinions from others before they commit. So earning their trust and credibility is key. Make sure you gather plenty of engaging testimonials from your customers. These don’t have to be full blown case studies. Sharing quotes and snippets on social media is likely to be just as effective. As many as 13% of millennials turn to social media to find accounting services, as opposed to just 2% for older business leaders. 3. Millennials want technology This generation was born with a mouse in its hand. It is a must that you are tech savvy. According to an annual survey of millennials by bill.com, 82% expect paperless accounting to be the norm. Millennials are also three times more likely than older customers to want accountants to recommend technology and training as part of their service. 4. Millennials want to remove stress Millennials are reckoned to be more susceptible to stress than their predecessor generations. So to speak effectively to them, your marketing message should communicate how you can remove worries, save time and cut out stress. You could go further. A tax return or balance sheet document does not communicate that you care or add value. But if alongside standard services, you talk to your millennial customers about business coaching or a personal finance check, you will show you are on the same wave length. 5. Have a fast website Finally Millennial customers will expect your business to be mobile friendly so they can access you anytime, anywhere. Informi’s research found 88% think of work outside office hours and 74% monitor work such as emails outside of office hours – the highest of all generations. Steven Drew, product manager for Informi, comments: “Great businesses ultimately come in all shapes and sizes, and from all generations,” said Steven Drew, product manager for Informi. “But the rise of the millennials as entrepreneurial champions could help to encourage other adults from their generation to take the plunge into setting up their own business – something that over 550,000 people in the UK did during 2017.” “Those considering setting up a business need to be aware of the risks involved and the need to gain support, but having a strong business plan and the means of financing a venture could give you a chance to turn your ideas and dreams into reality.” Generation definitions: Millennials (Generation Y): aged 23 – 38 Generation X: aged 39 – 53 Baby Boomers: aged 54 – 72
How to protect your business from corporate identity fraud Posted 07/30/2018 by Iwona Tokc-Wilde & filed under Financial accounting and reporting. With few safeguards in place, smaller businesses make easy targets for identity thieves. How do you ensure your business doesn’t fall victim to a scam? Corporate identity theft involves acquiring or stealing information about a business and using it fraudulently for financial gain. Sometimes fraudsters hijack a company by changing the registered office address and appointing rogue directors at Companies House. “In effect, they set up a parallel structure in order to receive goods or services,” says Michael Hatchwell, partner at Child & Child, Globalaw. Purchases are made on credit, in that company’s name, but the accounts are never settled. And what if they also apply for business loans and credit cards? The potential financial and credit rating damage to you and your business doesn’t bear thinking about. Hatchwell says: “Apart from this, theft of corporate ID usually results in a significant amount of disruption, hassle and damage to your reputation. If a business cannot look after its own confidential information it’s questionable whether it can be trusted with confidential information of its clients.” He adds that it could also lead to sanctions and fines if professional bodies and the Information Commissioner’s Office decide that you had taken insufficient precautions to protect confidential information of third parties along with your business’ own information. Business owners are at higher risk According to fraud prevention organisation Cifas, company directors are twice as likely as other members of the public to become the victims of identity theft. This doesn’t mean that it’s safer to operate your business as a sole trader. “You can fall victim to traditional personal identity theft and the impact of ID fraud will be the same if you and your business identity are the same,” says Harman Singh, co-founder of cyber security consultancy Defendza. Armed with stolen data, fraudsters can impersonate you or your company, often by pretending to be you or one of your employees, and trick your clients into diverting payments to a different bank account. Pretending to be you, crooks can also target unsuspecting members of the public and attempt to steal their data. Singh says: “They could be after personally identifiable information (PII), which is information that can identify an individual: national insurance numbers, date of birth, address and phone numbers.” Theft of corporate ID usually results in a significant amount of disruption, hassle and damage to your reputation How your information gets stolen In addition to the information easily available at Companies House, fraudsters use whatever a business volunteers about itself on its website, LinkedIn and elsewhere on the Internet. Singh points out that your business may be impersonated with a bogus website that appears to be legitimate. It involves setting up a similar or identical-looking website using your business logo but a slightly different domain name, perhaps .me.uk instead of .co.uk. A fraudster can then use the domain to send e-mails with bogus invoices, at the same time notifying recipients of a change of address and change of bank account. Often, paper documents get taken from rubbish and recycling bins. Or untrustworthy visitors steal or take photos of confidential information from files left out in the open. “Sometimes fraudsters also buy data from dark web operated black markets, and often use cybercrime techniques such as phishing and spyware,” adds Singh. Phishing emails sent to your employees are designed to appear to be from a legitimate source: you or someone else within your business that the employee recognises and trusts. “This way they can attempt to obtain passwords, gain access to company bank accounts and divert funds directly,” says Hatchwell. A phishing email may also have a virus attached, which could allow the fraudster to hack into your internal systems and steal the information from within. How to look after your business identity Companies House deals with up to 100 cases of corporate identity theft every month. To prevent unauthorised changes to your records at Companies House, register for online filing and join the Companies House free protected online filing (PROOF) scheme. Also, a new law came into force at the end of April 2018 to help protect company directors from identity fraud. Directors can now remove their personal addresses from the public record at Companies House. Many ID theft incidents occur because businesses don’t have proper information security procedures in place. Hatchwell says: “You must introduce robust processes such as verification of all money send/receive instructions as well as double-checking phone numbers and addresses. I’d suggest using electronic identification systems whenever available. Also, ensure that your IT systems, laptops and work phones are password-protected and that passwords are changed regularly.” Your business logo and website can be easily replicated with a few clicks if you don’t take steps to protect content. “Your website and any web portals should be created by a developer who has a secure design in mind so that no weaknesses are left in the code that may allow crooks to find loopholes to get in,” adds Singh. Hatchwell says that better physical security is paramount. “You must prevent mail theft, dumpster diving and unauthorised access to work stations. And you must keep all sensitive documents in a safe place.” He adds: “One of the best ways to protect your business from corporate identity fraud is to raise awareness amongst staff of possible scams, lessening the likelihood that they will be tricked. The scams are getting more sophisticated, and it’s easy to be taken in.” What to do if you are a victim of business ID theft and fraud If you operate as an ltd, contact Companies House to report and reverse any unauthorised changes to your company’s records. Also, report the matter to your professional body, the police and to Action Fraud, the UK’s national reporting centre for fraud and cyber crime, and follow their advice.
How to ace a phone interview Posted 07/27/2018 by Nicola Smith & filed under Interview tips. Telephone interviews are often the first hurdle in a job application process, but they can be disorientating and feel unnatural. Career experts maintain, however, that you can increase your chances of getting through to a second interview by following a few simple steps. Preparation First of all, prepare as well as you would for a regular face-to-face interview, says Rebecca Fraser-Thill, from Fraser-Thill Coaching and Consulting in Portland, US. “What I’ve often found is that people seem to be less prepared for phone interviews than they are for in person interviews, which really stands out,” she said. “The people who stand out are those who ask in advance who is going to be on the phone call, so if they send me an email, as a hiring manager, and say who can I expect to be phone conferencing with, that makes you stand out right away,” said Fraser-Thill. “You’re going through the process of researching who will be in the room, rather than just jotting down their names frantically as they introduce themselves, which is awkward to say the least.” Practice what you’ll say Practising your lines is another important aspect of your preparation. “A number of people come across as quite rusty,” she cautioned. “I spend three nights in advance of any interview doing mock interviews with friends or my partner…You have to be “on” from minute one in a phone interview. A key part of that rehearsal is to practice your articulation. “A lot of people come across as very low energy, with very garbled speech, and it’s hard to make a case for bringing someone forward when they sound like that,” said Fraser-Thill. One of the biggest challenges of phone interviews is being unable to see body language or non-verbal cues that would help you to read the situation. Time your answers “I encourage people to keep a watch directly in front of them so that they can keep an eye on how long they are speaking. They shouldn’t be answering questions for more than two minutes,” Fraser-Thill recommended. “It’s very easy to underestimate, especially when you’re receiving no feedback on the other end of the line. We tend to just keep talking when we don’t hear anything.” And try to make each couple of minutes count, she continued. “Be specific. I find that on the phone people talk in much more vague, broad, sweeping generalisations and don’t use those illustrative examples that are very specific.” Let your personality shine through the phone During the interview it is also crucial to portray yourself accurately, Fraser-Thill added. “If you are someone who is assertive about putting yourself forward, that’s who you should be on the phone. If you are somebody who is a bit more reserved, you should be that person,” she advised. “There is nothing worse than having someone come in who was your top candidate on the phone as a hiring manager and then you meet them and within about ten minutes everyone knows it’s all wrong,” she said. “It’s going to waste their time and your time.” The opportunity to shine in a telephone interview continues after the conversation stops. Dress for the interview Hannah Salton, a career coach and consultant, who runs her own business Hannah Salton Coaching, said the first step you should take ahead of the phone call is to clarify its structure, length and the type of interview. It’s normal for a telephone interview to feel unnatural, she said. “I think it’s helpful for you to dress professionally as it puts you in the right frame of mind and I definitely think you should still smile because it comes across in your voice even if people can’t see you,” Salton recommended. Pay attention to the cues Listening carefully is also very important. “If you are paying attention when you are listening, you might be able to pick up verbal cues,” she said. And while the option to have detailed notes in front of you is tempting, it should be avoided, Salton advised. “Having your CV and maybe a couple of key prompts can be helpful but I think if you are overwhelmed with pages and pages of perfect interview answers, it can feel quite stressful and stilted and often the interviewees are trained to pick up on stuff like that,” she warned. “I would say use [notes] in moderation because you almost rely too much on them and they become a crux. The single biggest criticism I have in interviews are answers appearing unnatural and overly rehearsed and I almost think there is more risk of that happening in a phone interview,” she said. Authenticity is key “Being authentic, being natural, and being yourself is really important.” Throughout the conversation, think about your pace. “Often people speak too quickly in interviews so do try and keep your pace natural but slow so that you give yourself enough time to think and also so that you have conviction and impact with what you are saying,” said Salton. Post interview Finally, don’t assume you have failed to get through to the next round if you have not heard back. “If you were a clear no you would have been told straightaway so I think if you haven’t heard back..it’s absolutely the right thing to be pro-active and follow up,” Salton recommended. “First of all, send an email the day of [the interview] saying thank you. That should be step number one. It should be within 24 hours but ideally before close of business that day,” said Fraser-Thill. That should set the stage for someone to write back with some kind of guideline about when you are likely to hear the result. How you follow up is important. “Sometimes candidates are worried about pestering people or bothering people but there is a way of reaching out that makes you look proactive rather than like you are complaining,” said Salton. “Say something like – I’m just following up on the interview, I really enjoyed speaking to you, please let me know if there is anything else you need from me,” she suggested. “Or you could say, I was just wondering if you knew when I was likely to hear back, or if there were any updates with a likely timescale. So you’re not being aggressive or negative but you’re just looking proactive and to see if there is anything you can do from your side.” Said Salton. “My rule of thumb is that if a week past what they told you goes by, then email the person who wrote you back in response. I give them one extra week beyond what they told me it would be. And I’ve never encountered any pushback on that,” suggests Fraser-Thill.
In versus out: bookkeepers and outsourcing Posted 07/25/2018 by Mark Blayney Stuart & filed under Bookkeepers, Run your business. Should SMEs outsource their bookkeeping or keep it in-house? Being able to understand the pros and cons of each will help bookkeepers tailor their services to clients. “One of the key benefits of outsourcing your bookkeeping is the expertise and experience that an independent bookkeeper will bring to an organisation,” says Brian Munjanja, Managing Partner at Broadwing Accountancy Services. “There can be a knowledge gap if you stay in-house.” For example, if there is a particular problem that can be hard to solve, “you either have to struggle along, or you go outside anyway to fix it.” The cost benefits of outsourcing Secondly, there are significant cost benefits to outsourcing. “Your costs are variable when you outsource – it can be on an as-and-when basis when you need it, or expand as transactions increase and you need the extra bookkeeping requirement.” This is in contrast to having a full-time bookkeeper on the payroll – that person is being paid even if you don’t always need them. Flexibility also helps with scaleability. “If the company grows unexpectedly quickly, then you’ll be looking to outsource your bookkeeping (and maybe other parts of the business too) in order to cope with the increased demand.” That gives you decisions to make. “Do you get a bookkeeper and financial controller? Do you have an interim Finance Director? Or do you have a controller and ask them to do interim bookkeeping? They might not want to go up and down the chain in that case.” All these decisions have to be given time and thought when the business is taking off, at the very moment the SME should be focusing on the business – not the bookkeeping. “If your outsourcing is in place already, you avoid all these problems.’ Alleviate financial reporting As well as the obvious salary costs, Stephen King of accountancy firm GrowthForce reckons that overhead costs “add an additional 20% on top of an employee’s base salary,” once benefits packages, pensions contributions, holidays, sickness, recruitment costs and training costs are all taken into consideration: “your business won’t pay overhead costs when using an outsourced service.” Outsourced bookkeeping can also “help alleviate late, inaccurate or meaningless financial reporting,” he says. Thirdly, there is the management time that an in-house bookkeeper will occupy. “This is not to say managers will be doing the bookkeeping – it may be an employed person – but that person will still require management time,” Munjanja argues. There’s a legal benefit to outsourcing as well. According to Naren Arulrajah, CEO of Ekwa Marketing, “Outsourcing accounting duties can greatly decrease the likelihood of serious mistakes or fraud,” because “duties are segregated. Strong measures are also taken by outsourced companies to produce financial statements for their clients — many providers have at least two reviews of every step of the financial process.” For Arulrajah, “some companies even have procedures where one employee has to review another’s work to eliminate financial discrepancies.” SMEs might also find that in-house bookkeeping makes day-to-day issues simpler and quicker to resolve In-house advantages What about the reverse – are there cases where keeping your bookkeeping in-house is preferable? “The greatest argument in favour of in-house is control,” Munjanja says. “Knowing that operations are managed internally means that can get your hand quickly on the pulse and feel the directions things are going in; that’s a powerful advantage.” SMEs might also find that in-house bookkeeping makes day-to-day issues simpler and quicker to resolve. “If the bookkeeper is at a desk across the room for you, processes might be easier to change and adjust. And every business has some operational quirks – in-house, you can be attuned to the special handling needed by an awkward client, shall we say, for example!” There are “some great in-house bookkeepers,” Munjanja says, and Stephen King recognises that “choosing a bookkeeping and accounting service for your business depends on which can support the needs of your business the most. In-house bookkeeping and accounting might be right for some businesses,” he acknowledges, but “many businesses find outsourcing their financial needs is easier and more cost effective.” Technology matters As technology helps bookkeeping become more and more flexible, it makes outsourcing an even more attractive prospect. “Cloud bookkeeping and accountancy packages make it easier to outsource because there are no longer standalone computer systems – you can offer bookkeeping remotely and the company can log in and see that the agreed work has been done,” Munjanja says. It’s true to say that perhaps until relatively recently, most organisations would cope with their own bookkeeping until it reached a certain level, and only at that point would they consider outsourcing. “But now, you can be at your desk and I’m at mine and we can both see the records. Data flows electronically – most invoices are electronic now – so I can see what’s happening on a weekly basis and it limits friction. It makes it easier for SME owners to scale the business and grow, from day one, without having to worry about numbers.” And ultimately, outsourcing offers objectivity. “You’re not caught up in the day-to-day business. You can raise points and questions that you might not see in-house. It gives the organisation an outside view.” It’s for the company to decide, but if you’re a freelance bookkeeper, understanding the needs of SMEs can help you attract their business. And if you’re an in-house bookkeeper, you will know how to maximise your invaluableness to your employer. Both have their advantages. 6 ‘C’s: The benefits of outsourcing… Cost efficiencies – it is usually cheaper to outsource than to employ an in-house bookkeeper Cutting-edge technology – enables companies of any size to outsource Concentration – you can detach yourself from the numbers and focus on growing the business … versus the benefits of staying in-house Culture – in-house staff understand the nuances of the business Customisation – your accounting needs might be unusual or specific Commitment – your employee is exclusive and loyal to you.
How to work from home with the kids during the summer holidays Posted 07/23/2018 by Georgina Fuller & filed under Run your business. Any parent knows that work and children do not go hand in hand. As the hilarious video of Professor Robert Kelly, discussing the situation in Korea live on the BBC and being gate-crashed by his children waltzing and wheeling in, showed all too well. Maintaining concentration, a professional demeanour and meeting deadlines can be very difficult when you also have to entertain a toddler or bored pre-teen. With the six-week summer holidays finally here, we look at the best ways to work from home with children (that don’t just involve Peppa Pig and Pom Bears.) Set realistic expectations (for you and your clients) Zoe Whitman, founder of But The Books accountancy and bookkeeping firm, says: “My clients know I have a toddler and that I sometimes need to work around her. Having open conversations about this means I can manage their expectations around my availability.” Whitman thinks these sorts of conversations have actually helped her build a rapport with her clients, especially if they have young children too. “It has allowed me to connect with my clients on a more personal level, which has been great for business,” she notes. Schedule your tasks around your children Choose your tasks wisely and try and fit them around your children as much as you can. “There’s no way I’ll get my most technical pieces of work done with a little one at home,” says Whitman, “but I can do the jobs that don’t really need that much concentration, like dealing with emails which just need a quick reply while looking after her.” Go to child-friendly networking events London is now home to a plethora of brilliant child-friendly co-working spaces, including Huckletree and Cuckooz Nest, some of which have onsite creches or which hold events where you can bring your children. This can be great for you and your child, says Whitman. “I’m part of a brilliant networking group here in Bristol called Freelance Mum. It’s a regular networking even which you can take your child along to and has been a great way to meet potential clients and catch up with current ones,” she notes. Make the most of nap time Freelance marketing consultant Stacey MacNaught says working from home when her two young sons (who are one and three) are in situation is impossible so she tries to make the most of nap time. “…. I have given up working when he’s home apart from during his nap in the afternoon.” Set up a desk for them MacNaught says: “I’ve set my three-year old up with a little desk next to mine. He has a little table and either his Kindle Fire Kids edition or an old Chrome book and pretends to work with me. Or we’ll get his crayons on and I’ll give him a “job,” to do (like “draw a car”). He’s fantastic. I can easily get an hour or sometimes more done this way with little by way of disturbance!” Get them involved Robin Young, AAT student and founder of Fitness Savvy price comparison site, says: “Once they are older than three and can talk, you can get them helping with filing. Maybe teach them about numbers while you work, allow them to help you with spreadsheets etc. At least you’ll get some work done while teaching the kids a little bit about maths and accountancy at the same time.” Plan in advance and call on friends and family Business mentor Katie Colella says planning in advance is essential. “If any family or friends ask if they can help, get them booked in, before they make other plans. If you leave it too late, often the options are gone,” she says. “Get together with friends and help one another out. If you have a friend who is in the same boat, could you consider having yours and her children one day in exchange for another day?” Look into local kids’ clubs Don’t forget to look into your local kids’ clubs too. Lots of schools run clubs over the holidays. “My children loved the kids’ clubs when they were younger and they often work out cheaper when booked in bulk and they are pretty reasonable when you compare them with the cost of keeping the kids entertained,” Colella says. Negotiate If you have a day that you have no help and have work to get done, make ‘deals’ with your children, Colella advises. “So if they are well behaved and play nicely for a couple of hours, say you’ll take them to the park for an hour in the afternoon. This works really well, as they know the quicker I can get my work done, the quicker they’ll get their time and get to the park.” Re-jig your working day “Make calls on the days when they are elsewhere and avoid trying to make them whilst they are around- something always crops up!” says Colella. “This summer, I am going to try and work more evenings to fit my work into a four-day week and take each Friday off to spend with my children. If you can fit in a few more hours of an evening, you’ll easily free up a day. And you tend to get more done of an evening when the children are in bed/quiet!”
GDPR and how to implement ongoing compliance Posted 07/20/2018 by Julie Hodgskin & filed under GDPR. General Data Protection Regulation (GDPR) was incorporated into the Data Protection Act 2018 (DPA 2018), the act gaining consent 23 May 2018. Now that the act is implemented all policies and procedures relating to the collection, processing, handling, storage and deletion of all personal data should be in place. That, in some ways, was the easy part. The more difficult part is making sure that, going forward, compliance is maintained. As the person with overall responsibility, and potentially one whose livelihood could be damaged if a breach occurred, what actions can you take to ensure that your organisation is safe from a careless data breach or a disgruntled employee? Internal security All staff should have been trained on the new DPA 2018 rules and regulation. They should be able to recognise a SAR, process personal data in line with the act and your procedures and understand why it is critical to do so. However, being trained on the new procedures, and sticking to them may, in practice, be difficult. So how does the owner or manager ensure compliance? And what is the cost of non-compliance? Below is an example of what could happen if an employee decides to enact a data breach. In 2014 Morrisons was found liable for the actions of a former member of staff who stole the details of nearly 100,000 staff. The culprit received eight years in jail and Morrisons, who, due to the data breach incurred costs of more than £2 million, is now facing the prospect of being sued by at least 2,000 current and former employees. The financial consequences for Morrisons could be severe. You may be thinking that if Morrisons, with all the resources and cashflow to buy the most sophisticated and update software and training cannot protect against employee misbehaviour, what chance for you? But, with a much smaller number of staff in place, and less branches and lower staff turnover, it may be easier than initially thought. Suggestions to prevent internal data breaches Just as the Prime Minister banned the cabinet from bringing mobile phones to a recent Brexit meeting, you could implement a ‘bring no memory stick or other tools for saving data to the office’ policy. ‘No access to any software or internet access other than that needed for the work in hand’ can be written in the procedures. This will minimise the uploading of data to social media sights, one-drive, dropbox and other similar areas of the internet. Further actions that could be taken is computer history could be reviewed at random intervals, and emails sent can also be accessed for monitoring. However, all the above could be time-consuming and make staff feel untrusted. A better way of ensuring that personal data is protected, even if it is copied, is to pseudonymise the clients’ data before entering their details into the accounting and payroll software. That way, even if the data is stolen, no one can identify the individual, as the key to unlock the pseudonymised data is held separately, either on another server or off-line. This would make your employees feel valued and trusted, rather than treated as potential criminals. Creating new policies All the above can be written into the new policies and procedures with training given on both, with employees signing that they understand and comply with the requirements. This would also be a good time to review employment contracts and revise them as necessary to encompass the new regime. Remember, it is not that you don’t trust your staff; it is about protection of your and your staff’s livelihoods as well as client confidence and data security. Finally, a note on personal data disposal. It is not enough to throw away hard copies, or delete files containing personal data. Rubbish bins can and are ransacked for personal data information, and deleted file information is still held within the computer memory. All files to be disposed of, whether hard copies or computer files, should therefore be shredded. External security Often a visit to a client or attendance at an AAT conference or event is necessary. To run a busy practice the laptop may be packed along with the toothbrush and toiletries. Now that we are post implementation of the DPA 2018 all personal data held on the laptop or within software that has automatic access to cloud, is at risk. Again, pseudonymisation of data would be a solution to minimising risk, so a quick check now of what information is held on the laptop would be prudent. It may come as a surprise to see what little nuggets of personal data have been saved to the laptop over the years. Take the time to review and shred the data. Peace of mind is worth the effort. Finally, using a client’s wi-fi may be commonplace. But before logging on, do ask about anti-virus and malware protection. Just to be sure. Show total commitment to minimising a breach Some of the above may seem a bit like ‘Big Brother’ is watching, but remember, you have to show total commitment to minimising the likelihood of a breach. Anything less could lead to an Information Commissioner’s Office investigation, and, in some ways even worse, client and reputation loss.