Month: February 2019

You are not a bank

1 Accounts – You are not a bank

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You Are Not A Bank

As a small business, credit control can be a nightmare. Paul will tell you that when he first started running his traditional accountancy practice (Paul Donno & Co) he was pulling his hair out when he would do work, invoice the client and then not get paid. Unlike buying a product, paying for a service seems to have less urgency when it comes to paying. It used to take Paul on average just over 90 days for collection on 10 day accounts.

There is a group we belong to called the 2020 Group. One of the founders, a guy called Gordon Gilcrest spent some time with Paul to help his overcome this problem, he sat him down and said to him:

“Paul, you are not a bank. If people want a loan, they can go to the bank and they can pay interest on it. You are not a bank; you have credit terms, stick to the credit terms. If you give 14 days’ credit that gives them the right to pay within 14 days, not over days and pay you 50-60 days later”

This advice has stuck with Paul, and he re-evaluated his approach as a result. He spoke to the clients who were taking a long time to pay and advised them that they needed to change their ways. He also parted ways with a couple of companies.

When starting 1 Accounts Paul did not want these problems again. We set up Go cardless and have automatic direct debits taken every month. The direct debit is automatically set up when the proposal is signed. This saves time, money and chasing.

Here is our advice to you if you are struggling with credit control:

  • Look at your trading terms and ask yourself why you are offering credit, and if you do offer credit, want are your terms? Work out on average how quickly your customers are paying.
  • If you are lending money long term, that is for banks to do and not you!
  • Look at all types of money collection and do not put barriers in the way. Take credit cards, offer direct debit, provide alternative funding to customers
  • Remember ‘Turnover for vanity, profit for sanity but cash is reality’
  • It is no good tying up your money in stock that takes ages to turn over, measure stock turnover and don’t lock up your cash.
  • Don’t give extended credit, and if you do chase it hard, you have already paid for the goods sold or staff to provide services.
  • Without cash, you cannot make rational business decisions to move forwards.
1 Accounts helping the environment

Green is the new black – why go paperless?

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GREEN IS THE NEW BLACK

Trees. Water. Carbon emissions. Time. Money. The environmental impact of paper production in the financial industry is significant and yet completely avoidable. In an age where nearly everything is digital and in the cloud, we needen’t use so much paper. Using an online calculater we have esstimated that as firm we save the following per year:

  • 450kgs of Wood
  • 10,900 Litres of Water
  • £146.80K
  • 7000 hours

The Facts 

Worldwide the use of paper has risen by 400% in the last 40 years. The paper industry is the fifth largest consumer of energy in the world. Going paperless can help:

  • Save trees – Trees provide habitats for animals, covert CO2 to oxygen and help clean our water.
  • Save water – To make 1 A4 peice of paper it take 10 liters of water. Being paperless can help conserve our worlds water sources.
  • Reduce polution – Making one tonne of paper emits more than 1.5 tonnes of CO2 equivalent. Using elss will help reduce the number of pollutants in our atmosphere.
  • Fuel – Documents need to get from A to B. The transportation of documents burns fuel and releases greenhouse gases. Eliminating paper documents will reduce the  amount of fuel used.
  • Save time – Printing, stuffing, posting, waiting & chasing all takes time. By going online you can get your time back.
  • Save money – Paper, envelopes, ink and postage all costs money.Imagain being able to eliminate this cost.

How We Work 

Emails not letters 

In todays era most companies are using email, however some still use ‘snail mail’ to send important documents. We however send all our emails via Microsoft outlook. If any include secure information we will send via Karbon. Emails not only save lots of paper they also save the time and money it would take to post each client queries. The only letters we send are to HMRC and to send goodies to our clients.

Digitally Sign Documents 

All our Accounts, Tax Returns and engagment letters have to be signed by clients. We do this digitally. For our engagment letters we use Practice Ignition and for accounts, tax returns and any other documents we use Docusign. These products have made our life so much easier, no more posting to clients and then waiting for them to sign and send it back to us.

Online Software 

All our clients use online accounting software, so not only are we paperless, we are helping our clients become paperless to. Gone are the days of manual books, paper records and bags full of receipts. With the online software we suggest to clients that they digitally send their invoices and request their suppliers to send their invoices directly to their Xero or receipt bank. This avoids the need for paper. We also use Xero and digitally send our invoices each month.

We love that being more efficent and saving money goes hand in hand with helping the envirnment and we love helping our cleints become paperless to!