Friday 18 May 2018

Guest post: 3 reasons accountants should be talking to their clients about business finance


 
Accountants provide valuable support to small businesses who rely on external expertise to keep their finances in shape. With only 26% of all SMEs having a qualified person in charge of finances the need for outside advise from a financial expert is clear.
Business finance
At any one time a third of SMEs utilise external finance for the running of their business, from working capital facilities through to term loans, and so business finance is naturally a hot topic for business owners.
In fact in 2018, 4 in 10 SMEs are planning a significant activity, including 19% looking to take on more staff, 17% planning to invest in new plant and machinery and 16% planning to develop a new product or service, according to the SME Finance Monitor report. How these activities are funded is a key question for business owners.
Advice from accountants
Of the areas of advice given by accountants, the importance of business finance advice is often under-estimated. Many businesses are first time borrowers and therefore lack experience at knowing what type of finance they require and what options are available. No longer is it the case that businesses are able to seek advice from their bank manager, and finance brokers are often criticised for giving biased advice. Therefore the role of the accountant and book-keeper in providing business finance advice is extremely important.
Value-adding conversations
So at your next client review why not try asking some more probing questions around their finance needs. Here are 3 suggestions to help get the conversation going:
1.     Improve cash flow
Symptom: low cash balances on bank statements; outstanding debtors; late payments.
Ask: is cashflow a problem? Is it causing stress/limiting growth? What steps have you taken to improve cashflow?
Potential suggestions: renegotiate trade terms; outsource credit control to the book-keeper; purchase assets using finance rather than using up cash; arrange working capital finance.
2.     Save on your finance costs
Symptom: large interest costs, large short-term creditors.
Ask: what finance do you use? Did you compare rates? Have you considered extending the term to reduce repayments?
Potential suggestions: ask a competing lender to give you a finance quote; compare multiple lender offers at www.bizl.co; ask the current lender about refinancing over a longer period to preserve cash.
3.     Invest in growth
Ask: what are your growth plans in the next 12 months? How will you fund this? If you could obtain enough funding, would that enable you to grow?
Potential suggestions: explore your finance options early so you know what is available; consider invoice finance to enable you to take on bigger contracts; consider the Government’s Enterprise Finance Guarantee scheme to access finance to grow within the UK.
Click here for more tips on how to find the right business finance.
Guest author: Josh Greenway is the Founder and CEO of www.bizl.co, an online business finance comparison platform that enables small businesses to compare finance options fast, free and easily.

Thursday 10 May 2018

2018/19 Payroll Software Winners & Losers


by Chris Deeson 

The beginning of May is the first opportunity that many will get to have a look at the payroll software industry and gain a view of the winners and losers.

The new tax year heralds the main season for people switching payroll software because payrollers can start with a clean slate with HMRC.

This year looks to have been unprecedented in the number of accountants and bureaus in particular that have changed their payroll. There are a few reasons for that:

• undoubtedly, smaller practices are moving to the cloud for payroll;

• automatic enrolment Staging Dates have finished, and bureaus now know the full extent of administering client payrolls through manual CSV processes,

• consolidation in the accountancy market (as practices are bought out they are migrated onto a common payroll software), and

• a number of nimble new cloud entrants to the payroll software market.

The big loser would appear to be Sage who saw their share price drop on the back of underwhelming sales in the first quarter (see “Sage on course for biggest fall in 25 years“ Financial Times 13 April 2018) and anecdotally we are certainly aware of a number of practices and bureaus that have moved away from various Sage products, including some very large practices.

IRIS’ Earnie has also had a bit of a rough time – partly because of practice consolidation and partly because of less efficient Automatic Enrolment processes. 

However, overall IRIS appears to have ended up as a huge winner with the announcement at the beginning of May that they had bought Star Payroll Professional.

Star were definitely the major winner in the large bureau software category this year and appear to have won business from all of their competitors. No doubt there are multiple reasons for their success, among them:

• a product that can handle the wide-ranging scenarios that large bureaus face;

• the fact that It handles AE really efficiently (helped by its great links with pensionsync),

• it is used by a number of the main consolidating accountants, and

• its charismatic business development managers.

The other stand out winner (but at the other end of the practice-size spectrum) is definitely Xero. Lots of accountants and bureaus that I have met at various events have told me that Xero Payroll has improved significantly over the past couple of years.

Xero is reaping the benefits of a an improved product and a large cloud accounting base and is winning clients from all of their main competitors.

Outside of Star and Xero, the other success stories have been the relative newcomers such as paycircle and PrimoPayroll who have both seen significant SME and bureau/accountant wins this year. Their starting position going into 2018 was lower and therefore their percentage growth is obviously higher. 

But I think their growth is interesting, because it demonstrates the desire for software products that make payroll quicker and simpler. The fact that they are more intuitive means that the traditional inertia around payroll moves is largely overcome as no longer are the new training requirements so stringent.

And there are yet more payroll softwares entering the market this year such as Keypay, and PeopleSolutionsCo.

2018 so far seems to be the first real sign that the payroll software market is becoming more fluid and that automation and the ease of processing are becoming critical factors.

It is not all about the cloud – especially at the larger end of the market – but solutions where everything is in the cloud are definitely winning the day and are fitting in with the increasing flexibility about when and how we work.

And yet - even with this increased fluidity - somehow or other HMRC’s Basic PAYE Tool (BPT) does not appear to have been a big loser. 

How is it that a bad piece of technology that cannot even do AE calculations - let alone send the data anywhere - continue not to leak users?

It’s not as if there aren’t a plethora of free or very cheap payroll softwares out there that are simple to use and with far greater functionality.

The HMRC really must name a date for pulling the plug on BPT.

[Interested in finding out more about these payroll softwares and comparing them for your situation? See more at Pensions.Market]

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