Category: Business

Protecting your business.

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Planning & Budgeting

A well-run business will have controls and procedures in place to monitor the business as well as providing means of gathering relevant information in order to monitor the business on its way to achieving its goals and objectives. Controls also provide an early warning that something maybe wrong.

Most people would associate such procedures and controls with very large organisations, however, planning, budgeting and forecasting are vital tools for SMEs as well.

Strategic Plans & Business Plans

Every business should have a strategic business plan which is vital to developing a long-term view of where business is going and how it plans to get there. When a business is considering raising finance, the plan for finance providers needs to include a significant amount additional information in order to provide new parties with a better understanding of the business. It usually contains information about the history of the business, the owners/managers and key personal, range of products and services as well as financial information (historical and projected).The purpose of the plan is to enable the business to sell itself to potential investors and finance providers.

Budgeting

Now, more than ever it is vital that all businesses prepare an annual budget to decide a plan for the business in the following years. It is important that the budget is reviewed on a regular basis in order to measure progress and monitor as to whether the business is achieving its targets and if not, then why not.

 

If an SME does not have the resources in-house to prepare the information, accountants can help to devise a simplified system of planning, budgeting and forecasting which summarises key performance indicators and provides a feedback mechanism. After all, it is of no benefit to have set targets and budgets if they are not being reviewed regularly and actions agreed where significant variances arise.
Contact CACM Accountants for further information.

How to turn your financial goals into reality!

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Register To Attend This Free Seminar Here

Date: Tuesday 29th May 2012

Venue: Imperial Hotel

Time: 6pm to 8pm

An evening seminar held in the Imperial Hotel Cork, on Tuesday 29 May will address many key issues relating to your personal and professional financial security whilst providing advice on good planning and how to make the most of your financial advisor.

•Do you clearly understand your personal and professional financial goals?
•Is your Financial Adviser or Accountant aware of these goals?
•Do you know what questions to ask when enquiring about financial options?
•Are you protecting your business interests?
•Do you want peace of mind knowing your loved ones are taken care of financially?
•Do you have a Pension?
•Are you saving for retirement?
•Have you recently carried out a Financial Health Check?

These questions and many more will be addressed on Tuesday, 29 May by guest speakers, Ms Carla Manning, Owner, CACM Accountants and  Sandra Maher, Managing Director, Inspire Financial.

Financial reviews are becoming more and more important in the current climate. It is advisable to put good plans in place which in the long-run will save money and ensure tax efficiency. Anyone interested in learning more about protecting their future financial well-being and gaining peace of mind should come along to this event on the 29 May. Light refreshments will be served at registration.

About The Speakers

About Carla Manning:

Carla Manning ADCA, CPA is the owner of CACM Accountants and Registered Auditors, a proactive and innovative accountancy practice based in Cork. As well as providing general accontancy services such as accounts preparation, audit and taxation services, we provide a full service for new business start ups. Carla has continually seen the areas where small and medium sized businesses struggle to develop and grow their business while also trying to maintain proper books and records and assess the financial affairs of their business. We pride ourselves in working closely with our client’s through the year so as to ensure that our client’s have the necessary support and advice needed in these clallenging times.

About Sandra Maher:

As Managing Director of Inspire Financial Options Sandra Maher has a proven history of giving Financial Advice in a wide range of personal and business situations. Having worked in Permanent TSB for twenty five years, Sandra has forged strong relationships within the industry. In her role as Senior Assistant Manager at permanent tsb she gained extensive expertise in risk assessment, lending, debt analysis, budgeting and customer relationship management. Sandra left the bank in 2006, setting up her own business as an independent financial adviser in Cork City.

Get more information

Register Here Now!

 

Expences – Getting it right.

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In light of the taxation issues, the most prevalent method in respect of payment of employee expenses is by the re-imbursement of vouched expenses i.e. repayment to the employee of expences actually incurred for which they have appropriate receipts for. When such payments are made to the employee and the payment is no more than reimbursement of a receipted expense, it is not treated as pay for tax purposes.
Other methods of dealing with employee expenses include:-

Flat rate employment expenses.

A standard flat rate expenses deduction is set for various classes of employee’s. The amount of the deduction is agreed between Revenue and representatives of groups or classes of employees in advance (usually the employees are represented by trade union officials). Such groups of employees that are entitled to this flat rate expense include nurses, teachers, firemen, journalists, certain professions/trades employed by the civil service and local authorities, shop assistants to name a few. A detailed list is available on the revenue website.
Round Sum expenses.

This is where the employer agrees to pay an employee an agreed amount each pay period in addition to normal salary to cover expenses. The expense amount agreed is treated as “Pay” and is taxable in the same way as if it were part of the normal salary payment.
Meal allowances: In the same way as agreed flat rate expenses, where employers pay a sum towards the costs of employee’s meals, it is treated as taxable pay.

Meal Vouchers.

Where an employer provides luncheon or meal vouchers to employees, the value of the voucher (excluding the first 19 c per voucher) must be treated as pay and appropriate PAYE/PRSI deducted in the normal manner.

Canteen Meals.

Where an employer provides free or subsidised meals in a staff canteen for staff generally, the value of the meals provided to employees are not treated as pay for tax purposes. However, the facility must be available to all employees in the company. If the facility is only available for certain employees, then the exemption will not apply and tax will need to be deducted on the value of the meals to the employees entitled to the facility.

Consumer Sentiment improved again in February 08/03/2011

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The overall KBC Ireland/ESRI Consumer Sentiment Index rose in February to 50.3. This compares to a figure of 48.7 in January, and a value of 59.4 in February 2010. The February reading remains above the all time low of 39.6 in July 2008 but it is still considerably lower than the all time high of 130.9 in January 2000.

Commenting on the results David Duffy, ESRI, said

  • “Consumer sentiment improved in February, due to an improvement in the forward looking expectations index which rose to 37.8 in February, from 31.5 in January. In contrast, the index of current economic conditions weakened to 68.9 in February from 74.2 in January.”
  • “Although sentiment has improved, the underlying figures suggest that any recovery in confidence remains tentative. Part of the improvement in sentiment is due to a move from a negative to a neutral outlook by respondents, suggesting a cautious outlook by consumers. The underlying message from the analysis is that consumers remain cautious in the present circumstances.”

In addition, Austin Hughes, KBC Ireland, noted:

  • “The slight rise in consumer sentiment in February is surprising in the light of a lot of bad news during the survey period. The run-up to the election focussed heavily on Ireland ’s economic problems and we also saw downward revisions to growth forecasts as well as further increases in energy and food prices. In these circumstances, the marginal increase in sentiment hints that Irish consumers have prepared themselves for a lot of bad news. They may also have responded to evidence of stronger global growth as well as tentative signs of improvement in a variety of domestic economic indicators.“
  • “It should be emphasised that even after the slight improvement seen in February, current sentiment readings are far below the long term norm. So, it is clear that Irish consumers are fairly gloomy at present and, of course, they face further problems. In particular, looming ECB interest rate increases could take a further toll on confidence in the months ahead. That said, February survey results hint at some resilience in sentiment which might suggest spending may not be quite as weak as feared.“

Note:- Since May 2008 the KBC Ireland/ESRI Irish consumer sentiment survey was prepared using a slightly different methodology.   While this may have a minor impact on the precise numerical estimates of various survey components, it should not have any significant effect on the broad trend reported.

Published with the permission of David Duffy of the ESRI

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Getting paid on time.

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All businesses are competing with suppliers for their customer’s money. The business with the best credit control system will get paid first. The groundwork for getting paid on time starts with the beginning of a new customer/client relationship. Every business needs to have a system in place for accessing a potential customer’s credit worthiness, whether it is a policy of requesting credit references, bank references or using publicly available information or credit bureaus.Once you are satisfied with the credit references, the next step is to ensure that there are written terms of business, which should include payment terms, provided to the customer. Do be aware though that for a contract to be legally enforceable it must contain certain elements and it is always wise to seek professional legal advice on this.

We all know that there are different categories of customers when it comes to collecting payment. In these difficult times, we all try our best to be reasonable and fair, particularly where in the past the customer has always been a good payer. The main thing is to ensure that as a business, you limit your potential exposure. The most difficult categories for all business to deal with are firstly, those that can pay some debts, but can’t pay it all and secondly, those that won’t don’t and never pay.

A good cash collection system should be flexible, reliable, secure, adaptable and economical. Most importantly, the system needs to be operated in a firm, but intentional manner. If a customer gives you a date for when payment will be made, if not received, a telephone call should be placed immediately. Information about the customer’s accounts department including their payment processing system should also be obtained as this can avoid delays in the issuing of payments.

When preparing to make a cash collection telephone call, it is important to make sure that you have all relevant information and be prepared with possible responses to the standard excuses such as “the cheques in the post”. You must remain firm and ensure that you finish the call with a definite answer.

Reducing cash collection time can also be helped with the use of electronic invoicing over traditional paper invoices. It can save time (not to mention costs) on the delivery of invoices and statements. Encourage electronic payments, standing orders and direct debits where appropriate. Accepting card payments and discounts for early payment can also encourage early payment.

Unfortunately, where telephone calls and reminders don’t work, things need to be ramped up a bit. Clear concise cash collection letters may ensure that the correct person is aware of the outstanding debt and result in settlement. Applying late interest payments may also speed up the collection. However, you need to decide the time that will be spent on something like this if you are aware that the inevitable result will be legal action.

  • Immediate steps that you can now take to improve cash collection include.
  • A review of your current terms of business/contracts.
  • Ensure that payment terms are clearly stated.  
  • If a written contract, make sure that there is an agreed reference to what interest will be payable on late payments 
  • Ensure system in place for monitoring agreed payment terms and unpaid debts
  • Enforce the credit control procedures firmly, but vigorously.

Remember, good communication and negotiation skills are absolutely necessary when collecting debts. Keep making the calls, square off any excuses and always make sure that you end each call with a firm commitment and follow up if required. A company needs to make sure that they are always “first in line” to ensure that what cash a customer has comes your way.

Protecting your business

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Business owners, more than ever, need to have a proactive approach in managing their business. We need to be able to detect and identify warning signs of potential problems and know what steps to take as soon as problems become apparent. Problems rarely arise suddenly. It is more usually a gradual process, as a result of a variety of circumstances either external or internal. External causes cannot always be predicted with accuracy in advance. Internal factors however, may, in many cases be capable of being foreseen.
Businesses will usually have expert skills and experience in the area of activity the business operates.

No matter how good a product or service is, skills and experience in areas such as business planning, financial reporting, marketing, customer relations and financial management cannot be taken for granted.  Running a successful business requires not only good creative and operational skills but good business skills too. If these skills are not available in-house, then the business will need to source these skills from specialist advisors.
 
Advice from professionally qualified financial accountants should be sought regularly, at all the stages of business life. Some of the many benefits of this include being able to take advantage of any opportunities of growth and to anticipate any threats to the survival of the business and reacting to them promptly. The key areas that a professionally qualified accountant usually provide expert advice is in regards to accounting, financial planning and credit management. Advice in areas such as bookkeeping and financial reporting practices and sound business practice should also be utilised in order to produce high quality financial information, which sets the ground for the efficient and effective growth and the survival of the business.

The CACM Accountants Blog begins…

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Since the whole world is blogging, we thought we should too. We will be using this facility to open discussions about what we do, how we can help you, and general information about our industry. We want to stimulate discussion, so please interact with this blog and keep an eye on us by subscribing to our rss feed.

We are also very active on Twitter on our CACM page, we are on Linkedin, and Facebook.