It really is scary to think about how much debt America has accumulated. We are used to talking about millions and billions, but when it goes into trillions it starts to become difficult to fully comprehend how much money we are talking about. Regardless of the sums of money being spoken about it does reinforce the need for businesses to diligently manage their income and expenditure. There is a very serious need for individuals and business to manage budgets effectively. Having a budget will help to steer and navigate your business through good and bad times.

Managing on a budget

It is not uncommon for small and medium sized businesses to manage on a small or limited budget. Hence there is an ongoing need to ensure that income and expenditure is able to balance throughout the financial year. There is no getting away from linking the success of a business with its ability to manage the financial side effectively. It is absolutely crucial to work through what comes into the business and what is going out. Given that business may fluctuate throughout the year. As such it is important to work out what the average income and expenditure is over a quarterly period this will enable any peaks and troughs to be taken into account.

Catering for on costs

It is tempting to think that all the money that the business makes can be spent as the owner pleases. However items like tax and national insurance should always be accounted for. Allowing for tax and national insurance will help to work out the income that can be drawn from the business. Knowing your real income will ultimately help to work out household income.

Priority and non-priority

If you feel that your business is struggling it might be worthwhile sub-dividing your budget into priority and non-priority areas. Items that are essential for the running of the business such as leases, business rates, utility bills, key suppliers and tax should always take priority when drawing up budgets. Essentially these are all the items that will allow your business to continue trading. It is important that you do not fall behind with these payments. Non-priority items such as credit cards or professional subscriptions can be placed lower down on the list.

The way forward

It is not too distant a memory that the last time America “sneezed” the United Kingdom caught a very serious cold from which it is still attempting to recover. On this occasion it is unclear what will happen or how badly affected the United Kingdom will be, if at all. Nevertheless, it is worthwhile taking the time to ensure that your business is in good financial health just in case Britain is adversely affected once again. In reality your business can only benefit from any work that is done to improve its financial running........let us hope that the UK has learnt its lesson and does not become infected again.

As from the 1st July 2011 the UK introduced a reform to its current Anti-Bribery Act. Naturally with any new legislation there is a need to ensure that your business is able to comply with new regulations. A grace period of two months has been afforded to businesses to ensure that they do not fall foul of the law. The Act is extensive and includes employees, business partnerships and suppliers to the business. Hence business owners will need to be vigilant in all areas of their business as they could unwittingly become involved in corruption through business associations.

The Serious Fraud Office & Ministry of Justice

On the 30th March both departments produced guidance to enable businesses to comply with the new Act. It seems as though the drive to reduce corruption and bribery in business will be on the agenda for some time. Consequently time should be taken to become familiar with the guidance and to implement any suggestions and ideas which it offers. It is possible that any business that falls short of the law will be hit with substantial fines or find themselves in court.

Who will be affected?

Essentially any company that does business in the UK will be affected. That is UK businesses that do business outside of the UK or globally, or overseas companies that do business within the UK. The long and the short of it is that there will be no escaping or side stepping of the law. The common perception is that enforcing good practice will help to enhance the UK’s image as a fair and safe place to conduct business. Who knows? This may even help smaller businesses by levelling the playing field.

What is in the Act?

The Act will bring into force new generic offences such as:-

• The giving and receiving of bribes
• Bribing a foreign public official
• Failure to prevent bribery or corruption by representatives

Business will need to be able to demonstrate that they have taken adequate steps and have suitable procedures in place to curtail bribery.

What Holden Associates recommend?

• Having an easy to understand and implement anti-corruption policy.
• Engaging an independent person to vet or implement your anti-corruption policy.
• Encourage the reporting of misconduct or irregular approaches from other businesses.
• Be aware of who you are doing business with and by conducting checks on employees that may be at risk.
• Implement staff training to ensure dissemination of the anti-corruption culture to all staff

How can Holden Associates support you?   

The need for businesses to implement anti-corruption procedures has become of the utmost importance. Ignorance will not be considered as an adequate defence should the worst come to the worst. We can help by providing :-

• · Advice and support
• Help to create suitable polices.
• Help to create adequate internal control systems.

The cost of litigation and loss of reputation is something no business can afford.

The recent attempt to hack into the International Monetary Fund computer systems has highlighted the need for all businesses to be proactive about protecting their data. On one hand the use of information technology has brought great benefits to small and medium sized businesses. On the other hand it has created a new serious and silent threat which needs to be treated as a seriously high risk factor. Virtual theft is now as serious the loss of goods or products.

Data is one of the most valuable assets that any business has. First and foremost data forms a central component within many businesses. Data can be transformed and used for multiple uses such as marketing, business forecasting and business analysis. Ultimately, data can transform a business and be turned into a healthy profit. It is no longer as simple as one competitor ‘stealing’ the odd customer here and there. Loss of data could lead to serious consequences both strategically and financially for the business.

Mobile Phones

Mobile phones are increasingly an essential part of everyday life. They are often used as a multipurpose tool to organise work, send and respond to emails and to manage increasing amounts of information. It is truly astonishing to think about the vast amount of personal information which is contained in a mobile phone. That is personal information about the individual, their friends and work related information. Whilst the inclusion of Bluetooth on many mobile phones may be useful to facilitate wireless connection to a variety of devices it also makes the phone susceptible to being “hacked”. As such any information that is contained in the phone can be exploited via external sources.

Failure to treat data as being valuable

Often the electronic records on a database are more valuable than the computer itself. Frequently the computer can be replaced, whereas data loss or corruption can be irreplaceable. Surely the thought of having to tell all your customers that you have lost all their personal or business information cannot be a pleasant one. Equally, facing the thought of customers potentially suing you because they felt you were negligent with their data is not the best outcome. The loss of classified information could ultimately mean the loss of business and reputation. As such businesses will need to consider investing in a means of protecting their data.

What needs to be done?

• Backup early and frequently
• Secure wireless transmissions using encryption
• Password protect individual documents
• Use file sharing security to set access for those who can or cannot access files
• Ensure that anyone who has your data such as your accountant uses secure measures to secure your information

There is no excuse not to maintain strong computer security whilst managing your business. Data protection and electronic security is an essential component for peace of mind. Help and advice should be sort from your business advisor if in doubt about what needs to be done.

What have you previously done with a SCAM Email, if like me it has simply been a case of 'hit delete' and forget it.

Now however Action Fraud has launched an initiative to collect and collate scam emails so that the problem can be better addressed.

There is more information on their website here.

You are urged to forward scam emails to email@actionfraud.org.uk (but do not reply to the scam email).

Action Fraud will not reply to you - but they will use the data.

Do not forward to Action Fraud your bank details, passwords or pin numbers.  They don't want them and you should not reveal them to anybody.

Help Action Fraud put a stop this.

I have from November 2010 become a Mentor with the Institute of Enterprise and Entrepreneurs, how is this relevant to the smaller business owner or entrepreneur?
Read on …

The IOEE is the first learning Institute dedicated to recognising the profession of enterprise and entrepreneurship, both in the UK and internationally. IOEE will give full member status to those people who have demonstrated they possess the skills and knowledge required to start and successfully run their own enterprise.

A full member may have built their own big business with hundreds of employees or be self- employed working from home. As long as the individual member has gained the enterprise skills and know – how and have applied these, in practice, to develop their enterprise then they will be recognised as a Member of the Institute (MIOEE), have access to the full range of membership benefits and are able to shape the future of their Institute.

The IOEE is powered by SFEDI, the UK expert and accreditation body which has for fifteen years  researched and identified best practice in enterprise skills and support.  All SFEDI’s work is guided by the SFEDI Advisory Board which comprises all the major UK wide small business membership and business support organisations plus key entrepreneurs.

The founder members, all small business owners themselves, and the initial group of Fellows of the Institute have worked with SFEDI over many years, are credible and respected by the enterprise community.

The IOEE is a not-for-profit organisation to be developed by enterprise owner members for enterprise owner members. It is a unique learning Institute for the purpose of enabling personal and enterprise development.  It is supported by many large small business membership and business support organisations in the UK. It is totally independent of government.

Today our blog became 3. Yes that's right, we have now been blogging for 3 years, in those 3 years we have hopefully informed and guided many clients and non clients alike.

The blog has matured in this time, it started off as a more factual blog with our first posting being entitled ‘tax watch’, more recently we have moved towards a more informative approach.

What else have we be doing for many years that most other accountants are only just starting to catch up with?

In March 2005 we also started to offer WinWeb Cloud Accounting software to all our clients for £FREE. WinWeb has also matured in the years, now with Version 6 it is more powerful than ever, go take a look for yourself, and remember, become a client of Holden Associates and get it £FREE.

For our £FREE copy of the UK Governments 20 October 2010 Spending Review click here.

From time to time there are products that you come across that really do offer some benefit to smaller business, Serif PagePlus is one such reasonably priced product. Here is our review for you:

Serif PagePlus X5 is an amazingly functional piece of software. There is no need to be an IT expert in order to use this software. It has a vast range of user friendly tools that are easy to use and understand. It has a good range of features ranging from cards, business logos, compliment slips, CVs and web publishing templates. If you are an exceedingly busy user that does not have the time to learn how to us the programme in depth then the ‘Use a Design Template’ feature is ideal as a great starter tool. This tool will take you through the step by step fundamentals of the document that you would like to produce. The design template feature is easy to follow even for people that have IT phobia. A pleasing sample document can be produced in a very short period of time.

An additional benefit is that these designs are even easier to adapt to a personal preference once you get to grips with it. It is definitely worth the investing time in learning to use this piece of software properly. Essentially the more time you spend becoming familiar with the tools and how they can be combined the better the result will be. The only restriction may be imagination or creativity.

The programme is a one stop shop that is capable of producing and enhancing business related documents. Combing text, graphics and charts has never been easier. There is no end to how documents can be combined. One of the many benefits of Serif PagePlus X5 is the wealth of different downloads that are available to the user. The downloads are all free hence they give the user more value for money than first meets the eye. With all the templates available, and from the new template store there are now additional templates available, there is no doubt that even the harder to please customers will be able to find something that they like.

Tutorials are available for users that are keen to improve their skill level or wants to learn how to complete a particular task, The tutorials are easy to understand and follow. Each tutorial is easily printable to create a handy reference file.

Overall Serif PagePlus X5 is a good investment for the small or medium sized business user that does not want to spend a fortune on hiring a graphic designer to produce business related documents. The look of documents is professional and pleasing to the eye. Take Serif PagePlus X5, good quality paper and a decent printer and the results will definitely be professional and impressive.

PagePlus X5 is a powerful desktop publisher to help business professionals easily create high quality marketing materials, compelling advertising, stationery and other printed documents, plus eye-catching e-brochures. For more information, visit www.serif.com/pageplus

According to Experian there has been an explosion in one-or-two-man/woman companies in the last five years. In 2005 this type of company numbered 140,000, now this number stands at over 400,000.

Experian says these types of companies have proved robust during the recession, suffering the lowest insolvency rate and the second healthiest financial score.

It’s not really a surprise these type of companies have faired well, unlike their competitors with staff, premises and overheads to feed this type of business can up and down scale their business almost at will, making them far better placed to ride out the recession and credit crunch.

It is fair to say this one-or-two-man/woman company is nothing new, but the shear number of them is, and Tim Latham has a very valid view on why we are now seeing so many of these businesses, it is something he calls the enforced entrepreneur, or to copy his phase ‘Essentialpreneur’.

These are those who through redundancy and possible age have had no choice but to set up on their own and go it alone. Now this is nothing new, in November 2007 I reported that Yellow pages reported six out of every ten new businesses are set up by people aged over 50, they called them ‘Silver Startups’.

This is good news though, with age come wisdom, well at least some wisdom, but imagine what could be achieved is we harnessed the wisdom of age and the eagerness of youth, maybe we will see some more very successful businesses who can draw on complimentary skill sets?

What ever the future it would appear the employment map in the UK has and is changing forever, rather than being employed being the norm are we seeing a distinct shift with many older people opting for the own business through necessity and are the younger generations realising that there is no such thing as a ‘safe job’ and the prospect of 9-5 employment filling them with dread, horror and boredom, what ever your motivator there are endless opportunities for the smaller business, its just a case of reaching out and grabbing them with both hands and then working for all you’re worth to make it work, what ever path you choose good luck.

It is possible that some people may have to work for longer than they can imagine. The simple reason being that they do not have a pension or a means of supporting themselves once they retire. As such, what should be a pleasant journey into old age, may in fact be one that is fraught with financial difficulty.

The recent economic downturn may have led to pension contributions being put on a back burner. Needing to work for a few years longer than you had originally anticipated will be a strong likelihood if you do not have sufficient capital to support yourself once you have retired. Needless to say it is important to have a pension provision, as it is also likely that you will be living longer.

Lessons in saving for retirement pitfalls.

• Lesson one in saving for retirement: Saving for retirement: this is probably the most important lesson - it is never too early to begin contributing to a personal pension the earlier that you begin making contributions, the more your money will have in the long-run. There are quite a few people who think that it is reasonable to start pension plans later, although they may be financially able to do so, it is not a truly efficient way of managing money. Pensions have compound interest and any interest that is added to a fund can itself earn interest, so the earlier contributions are started, the greater will be the compound interest, plus the contributions will not be so high because the person will be able to spread out their payments over a longer period of time.
• Lesson two in saving for retirement: The highest priority should be given to pension contributions and other forms of retirement investment. Whenever you are constructing a financial budget, retirement must be factored into your outgoings to the same extent as other expenses such as mortgages and utility bills - a pension is a necessity not a luxury. It is easy to overlook retirement as a day-to-day expense, especially when it appears to be so far away in the distance. Failure to factor retirement into the everyday cost of living will cost dearly in the long run.
• Lesson three in saving for retirement: considering the alternative options to retirement. Life can be unpredictable, and sometimes it does not travel along a straight line. If financial constraints have prevented you from saving for your retirement, then there are other options that can be considered. Such as taking a late retirement - continuing to make pension contributions is a sure way of improving your situation. Another alternative is to downsizing your property if you have one. 
• Lesson four in saving for retirement: start working with your accountant and independent financial adviser to find a pension plan that is suitable for your circumstances and financial means. Your accountant will be able to help you work out the tax relief you will be entitled to thereby giving you a true cost of contributing towards a pension.