'New school' accountants have replaced 'old school' bank managers for small businesses - blog

Have ‘New school’ accountants replaced ‘old school’ bank managers?

We have an increasingly complex financial ecosystem, yet UK businesses feel that they have no one to turn to.  It’s not surprising, since we’ve seen a reduction in bank branches and bank managers over the past 20 years, but what business owners don’t know is that they do have someone. To help SMEs in a way that banks never could, accountants are stepping up to fill this gap. They are bringing back the relationship-driven, trusted advisor role to the businesses who miss it.

Here is how accountants are taking the place of old school bank managers.

The bank manager is dead…

Around 20-30 years ago, life seemed a lot simpler. If you were in business and you wanted a loan or to open an account, you would just head to a high street bank (most likely the same one where you had your personal account, mortgage, savings accounts and even investments). Your efforts usually resulted in an overdraft and the add-on of a relationship manager.

This was a win-win relationship. Business owners had a bank manager who they could come to about anything from finances to providing a better relationship, to their service and growing their business. In return, bank managers had clients who didn’t just come to them for a one-off shop (e.g. a loan). They were loyal customers and did their full weekly shop with them every week (e.g. accounts, mortgage etc).

Fast-forward to today and there has been a massive reduction in bank branches (almost 3,000 branches across the UK closed between 2015-2018 alone). And for the banks that are still operating, they have moved up the ‘food chain.’ Not all banks, but the majority have digitised and have reserved their face-to-face services for the bigger businesses who are bringing in more money.

The result of this is that thousands of SMEs have been left without a trusted advisor. They have been left to make crucial financial decisions based on limited or poor information, and don’t know where to turn. In essence, to smaller business owners, the bank manager is dead.

Long live the accountant!

According to a survey by Capitalise, 98% of business owners said that they had no idea who their bank manager was and that, at best, they have a call centre. This shows that banks are falling short of providing a long-term solution to replace the role traditionally filled by the Bank/Relationship Manager.

Business owners may have lost this relationship element from their banking service, but what many don’t know, is that their accountants can offer this and more. SMEs need guidance across the entire financial landscape, including personal decisions as well as business, and this is where accountants thrive.

Accountants are uniquely positioned to be the new gatekeeper for smaller business owners. They know their small business clients best so can easily step into this role of ‘Trusted Financial Advisor.’ A seemingly ‘old school’ and obvious solution, we know, but accountants have evolved over the years while the banks seemed to have devolved.

Where do business owners go for help?

Long story short, if you are one of the many business owners who miss a relationship-driven service rather than a transactional one…if you need a professional advisor who you can talk to openly and honestly about anything…if you want guidance to come up with the best financial solutions to satisfy your specific business needs…you can turn to your accountant.

They should be your first port of call for any question or query that you have. Do you need a personal mortgage renewal? Call your accountant and they will manage this for you and make the best introduction.

Your accountant can help you with everything that an old-school bank manager would, and more:

  • Very first point of contact as your trusted advisor and someone you can call or sit with.
  • Funding solutions – debt, loans and data-driven finance applications.
  • Cash flow management – accounts, reviews, and forecasting.
  • Business advisory discussions.
  • Quality referrals – accountants connect with people daily and grow their network/client base.
  • Business introductions – insurance, pension advisors, bank accounts, business succession/exit.
  • Personal wealth and finance introductions – mortgages/investments/pension.
  • Business growth – implementing and training for cloud accounting programmes that increase efficiency and facilitate growth.

Next time you need business or personal advice, talk to your accountant first. They can give you invaluable support in the 4 key areas of business (people, sales, service, and risk). Plus, unlike the old-school bank managers, they still put the relationship first. This means that they are in a position to give you the best guidance and support as they know you, your business, and your needs as well as their own.

Laptop with flowers

12 ways to increase profit margins (and thrive in business)

Your profit margin is how much money you actually get to walk away with after a transaction is complete (revenue – costs = profit). It makes sense then, that businesses who want to grow, focus on increasing this margin. The bigger the margin you have, the more you will thrive and be able to power through challenges like the economic climate that we find ourselves in today.

So how do you do it? How do you increase your profit and master your margins?

  1. Identify what is not working – before you can fix something, you need to know what’s broken. Take an objective look at your business and your processes and identify the gaps.
  2. Streamline your processes – the faster you can provide a service, the faster you can generate revenue and increase your profit margin. Where can you speed up your processes to trim costs without impacting quality? I.e using cloud accounting software.
  3. Discover any areas where there is waste – where does your business spend money? Are you losing money through inefficiency or waste? Can you reduce your expenses?
  4. Market those higher-end services – what services sell best and deliver the highest profit? Prioritise these in your marketing and focus your efforts on pushing these more.
  5. Aim for incremental growth – try not to get ahead of yourself. Set yourself small goals and you’ll find that you’ll make consistent, and more importantly, sustainable progress.
  6. Focus on building your team a happy, motivated, and productive team, one that supports your growth goals, can make a world of difference to your profit margin.
  7. Be innovative in your strategy – if the pandemic has taught us anything, it’s how to strategically innovate our service. What are you not offering your target audience that they really need? What can you replace in the service that you’re offering now?
  8. Cross-promote to increase your credibility – if you get a good response from running webinars or writing content, think about ways you can cross-promote with someone influential in certain topics. Not only does this increase your credibility, but it capitalises on the other person’s time, money, and resources too.
  9. Identify other pillars for revenue – is there a service that brings in the majority of your revenue? If there is, try to see what other areas you can focus on to build another revenue-generating pillar. You don’t want your strategy to be dependent on a single pillar (what if that pillar fell down?). Your aim should be to strengthen another area or two and this will increase your margin too.
  10. Create a loyalty programme with your clients – your clients know, like, and trust you, and they are your best advocates. They are your free sales team, so help them spend more with you and tell others about your services. How can you create a loyalty programme to reward them?
  11. Raise your fees – if you haven’t had a rate increase recently, you have an easy way of increasing your profit! Just make sure to approach this right, conveying your increase in value rather than your profit margin.
  12. Outsource certain tasks – a great way of increasing your profit margin is to outsource some lower-value tasks to freelancers or contracted workers. You can use them only when demand is high or part-time.
Alarm clock

How to be productive when you feel restless or run down

The changes and stresses caused by the pandemic are taking their toll on all of us. It’s been almost a year now of being stuck indoors, working from home, juggling priorities, and potentially having to home school the children at the same time. I don’t know about you, but is it any wonder that we feel tired and run down?

This ‘new normal’ has a lot of us feeling run down, but at the same time, restless. It’s a horrible combination and it’s affecting our productivity. To help you get back some control and normalcy in your life, here is a quick guide.

Identify if your body needs a reset

Yes, sometimes, we can all procrastinate; we can all feel a bit fed up and tired every now and then. This is normal. What isn’t normal, is if you’re feeling this way every day. If you’re feeling any or all of the following as soon as you wake up and throughout the day, every day of the week, these are signs that your body is run down and in need of a reset:

  • Your energy is low
  • You’re not eating very well or healthily
  • You’re having digestion issues
  • You’ve got cravings (typically for high-sugar snacks)
  • You’re moody, anxious or irritable (more than normal for you)
  • You’re not happy with your weight
  • You feel like you need to make a change

How to reset your body so that you can be productive again

Make time for self-care – this should be your absolute priority when you feel run down, exhausted or restless. It may be really difficult to prioritise yourself when you feel so overwhelmed, but be tough with yourself and do it anyway. Without properly managing your physical and mental health, you simply can’t perform at your best. Get more sleep, exercise more, eat healthier, and dedicate some time to activities that ground you (e.g. meditation, journaling, meal planning etc).

Shift your mindset – productivity should be any ‘task’ that requires your time, energy, and attention. This includes any ‘chores’ that need to be done in the house and even exercise. Schedule these into your day and you’ll find that you’ll feel much better and more accomplished when you come to the end of them.

Prioritise and time-manage – first, start a time diary to figure out where your time is actually being spent. Do this for a week and it will help you be more mindful about how you spend your time. Once you have done this, you can establish an ideal schedule for yourself. Maybe you work best early in the morning, so start early and finish early. Once you have a schedule, prioritise your tasks. What are the tasks that are urgent AND important? What tasks will give you the most bang for your buck? Do these first.

Focus and take regular breaks – sitting down and focusing for long periods of time are not good for us. After all, our concentration is limited! To stay productive, try to use focus periods. Try the Pomodoro Technique where you work for 25-minute blocks followed by a 5-minute break. This will help you maximise your focus time and will force you to take repeated breaks. This technique is a good one for when you feel run down or tired as 20-25 minute blocks are easier to tackle than thinking you have the whole day to get through!

Avoid distractions and things that deplete your energy – distractions kill our productivity. It’s true – every distraction (no matter how small), causes us to spend the next 20 minutes trying to get back into the task we were doing in the first place. Turn off your phone notifications while you work and create an office space at home that is away from family members so that you can focus. It’s also a good idea to identify what drains your energy. Maybe it’s scrolling on social media or listening to friends rant about their situation or all the negativity that’s on the news. Whatever it is, avoid it so that you can use what little energy you do have on what matters.

Engage with people and get help if you need it – even if your team is working virtually right now, engage with them. Tell them that you’re struggling and converse with them. Conversations can boost mood and productivity so try to socialise even if you don’t feel like it. Sometimes, just sharing your worries or hearing that others feel the same is enough for you to feel better, but if it’s not, consider seeking further help. Whether it’s a business coach or a therapist, they can help you develop a plan and take back control again.

Dont be too hard on yourself

We have all gone through or are going through this, as we speak. It’s a difficult time and a truly unique time, so don’t be too hard on yourself. If you’re feeling restless and run down and worried about work and your productivity, the first thing you need to do is take care of yourself and talk to someone. This is the most important thing to do. The rest comes later. Only when you feel better can you start to work better, so prioritise you.


The road out of lockdown

Yesterday the English government formally announced it’s 4 steps out of lockdown and all social distancing restrictions. The welsh and scottish governments will follow a largely similar timescale.

The good news is that there is FINALLY an end in sight to the restrictions on trade and movement. However, COVID-19 is now with us permanently, and the government is preparing its long-term plans for ongoing treatment – just like it does for flu each year. The government has already announced a revaccination programme to run in autumn or winter 2021.

This email goes through the key lifting of restrictions. However economic support for businesses adversely affected by restrictions on trade will not be announced until the budget on 3rd March.

The 4 tests

Before lifting any restrictions, the government will apply 4 tests:

  1. The vaccine deployment programme continues successfully.
  2. Evidence shows vaccines are sufficiently effective in reducing hospitalisations and deaths in those vaccinated.
  3. Infection rates do not risk a surge in hospitalisations which would put unsustainable pressure on the NHS.
  4. Our assessment of the risks is not fundamentally changed by new Variants of Concern.

The stages out of lockdown

8th March: Step 1A

On the 8th March, schools and colleges will reopen. Up to 30 people will be allowed to attend a funeral and up to 6 for a wedding or a wake. People are allowed to leave their homes for recreation as well as exercise outdoors. But otherwise, the same restrictions are in place to what we have now. Schools are allowed after school sporting activity.

29th March: Step 1B

At the earliest, on the 29th March, 2 households or up to 6 people will be allowed to mix outdoors. Parent and child groups, with up to 15 parents, will also be allowed to meet outside. No household mixing indoors will be allowed. But outdoor sport and leisure facilities will be allowed to open, which also means organised outdoor sport for children and adults will be allowed. At this stage the government is still advising to minimise travel and there is still a ban in place on holidays.

12th April: Step 2

No earlier than the 12th April, we will be allowed to stay overnight outside our own home. But more importantly, non-essential retail, hairdressers/salons/close contact services, outdoor hospitality, plus self-contained holiday accommodation and outdoor attractions will be able to open. At this point, weddings, wakes and receptions can increase to 15 people. Event pilots will begin. There is still a ban on international travel for holidays. Whilst pubs and restaurants will be able to open for outdoor service (no curfew or requirement for a substantial meal to be served with alcohol), patrons will still be expected to order, eat and drink whilst seated.

17th May: Step 3

No earlier than the 17th May, all accommodation can open and international travel is planned to reopen. People can stay away overnight and there is a 30 person limit outdoors, with a rule of 6 or two households indoors. Organised indoor adult sport and indoor entertainment and attractions restart. 30 people can now attend weddings, wakes and funerals. Outdoor large events, with severely limited capacity can now restart.

21st June: Step 4

No earlier than 21st June, the government is hoping to remove all legal restrictions on social contact. So nightclubs can reopen, large events and gatherings can take place.

Economic support available to businesses

At the moment details are at best ‘hazy’. And the government has promised full details of the support available in the budget on 3rd March. However click here to see what we know so far.

A sign in the clouds

Lockdown 3.0 – A covid business update

Lockdown 3.0 has felt like an eternity. However, there is a light at the end of the tunnel with the vaccinations being rolled out. Hopefully everyone will have some more clarity when the Prime Minister announces his road map to normality on Monday the 22nd of Feb.

Many businesses have taken on the Government support schemes throughout the pandemic and some of these are scheduled to end soon. However, there is support to help your business get back to normal and avoid getting into debt.

Did you defer your VAT between 20th March and 30th June 2020? 

If you deferred your VAT payment for any returns between the 20th of March 2020 to 30th of June 2020 the payment deadline is the 31st of March 2021.This additional outgoing can be scary for businesses. However, HMRC will allow you to pay it back interest free over 12 months. To do this you MUST:

  • Register with HMRC between the 23rd of Feb and 21st of June 2021
  • Have access to your own Government gateway.

Unfortunately this is not something we can do for our client, however we can certainly help anyone through the process.

For more information please follow this link – https://www.gov.uk/guidance/deferral-of-vat-payments-due-to-coronavirus-covid-19

Bounce Back Loans (BBL) 

If your business needs cash, and you haven’t yet taken a bounce back loan, this is is your opportunity. The government guarantees 100% of the loan and there won’t be any fees or interest to pay for the first 12 months. After 12 months the interest rate will be 2.5% a year. This scheme is open until the 31st of March.

If you have already taken a bounce back loan the government is now offering a new ‘pay as you grow’ scheme. They are offering flexible terms for up to 10 years to help you repay the bounce back loan.

Take a look at the details by following this link – https://www.gov.uk/government/news/chancellor-eases-burden-on-more-than-a-million-businesses-through-pay-as-you-grow-flexible-repayment-options

There is also an option to pay back your bounce back loan by taking on a Coronavirus Business Interruption loan. This would then give you another 12 months before having to make a payment. However this should only be an option if your business can afford it!

Job Retention Scheme (JRS) 

The job retention scheme is scheduled to cease in April. Have you considered the effect this might have on your business?

Many businesses have been using the furlough scheme to stabilise their businesses, however with it coming to an end, some big decisions might need to be made.

A cash flow forecast will help your business gain clarity to see where you are at and where you are going.


VAT reverse charge

What is the VAT reverse charge?

From the 1st March, the VAT reverse charge scheme now applies to construction. If you work in the construction industry and are VAT registered, this applies to you, your suppliers and your customers.

If you are not VAT registered or do not work in the construction sector you can ignore this blog but feel free to share with someone that you know who is. 

This new scheme has been brought in to reduce VAT fraud in the construction sector. For businesses which fall under this scheme, it will mean significant changes for how you charge and recover VAT.

Click here for the published guidance that has been released by HMRC so far.  

Build UK have also prepared a guide which includes a checklist to assist with the changes. Click here to view the checklist. 

It is also useful to look at and understand the published guidance on the CIS scheme itself which can be found at www.gov.uk/government/publications/construction-industry-scheme-cis-340

But let’s start with WHO this scheme DOESN’T apply to: 

  • When you are not VAT registered as a business
  • You are not in the construction industry
  • If you are VAT registered and supplying:
  1. A non-VAT registered customer
  2. The ‘end users’, i.e. a VAT registered customer who is not intending to make further on-going supplies of construction
  3. Intermediary suppliers who are connected, e.g. a landlord and his tenant or 2 companies in the same group.

Now let’s look at WHO this scheme DOES apply to – and ALL the conditions need to be met: 

  • Where the customer and supplier are both registered for CIS
  • The customer and supplier are not connected
  • The customer is intending to make an ongoing supply of construction services to another party
  • Standard or reduced rate VAT applies to the services or product being supplied
  • The supplier AND customer are both VAT registered.

It’s probably easier to consider different scenarios and what would happen under both the old and new schemes:

Scenario 1:  

Simon the plumber, who is VAT registered, supplies the materials and labour to plumb a new house for Mr Developer (also VAT registered). Mr Developer (also VAT registered) then sells the house to Mrs End User.

Under the old scheme:

Simon would have invoiced Mr Developer £10,000 + VAT, i.e. £12,000

Simon would have accounted for the £2000 of VAT he owes HMRC on his system

Mr Developer would have paid Simon £12,000.

Mr Developer would have accounted for the £2000 of VAT he can possibly reclaim against VAT he owes HMRC.

Under the new scheme:

Simon invoices Mr Contractor £10,000, and marks his invoice as “the CIS reverse charge applies and the applicable rate is 20%”.

Mr Contractor now pays Simon £10,000. But then accounts for £2000 of VAT (i.e. the VAT on Simon’s invoice) that he owes HMRC on his accounting system.

Scenario 2: 

Simon the plumber, who is VAT registered, supplies the materials and labour to plumb a bathroom for Mrs End User.

As Mrs End User is the End User, and a customer who is not VAT registered, Simon under both the new and old scheme, invoices her for £10,000 + VAT, i.e. £12,000.

Simon accounts for the £2000 of VAT he now owes HMRC.

Scenario 3: 

Simon the plumber, who is VAT registered, supplies the materials and labour to plumb a house for Mr Builder. Mr Builder is NOT VAT registered.

As Mr Builder, is a customer who is not VAT registered, Simon under both the new and old scheme, invoices him for £10,000 + VAT, i.e. £12,000.

Simon accounts for the £2000 of VAT he now owes HMRC.

What you need to do now: 

If you are VAT registered, inform all your VAT registered subcontractors that from 1st March 2021:

  • you will no longer accept invoices with VAT paid on it
  • Their invoices which contain products or services which VAT needs to be paid on are clearly marked as ‘the CIS reverse charge applies’ and the VAT rate which needs to be applied to the items.

If you are regularly buying materials which have VAT added, you may like to consider moving to do a monthly VAT return. This will allow you to quickly reclaim any VAT which is owed to you. With the introduction of the reverse charge scheme in construction, most VAT registered construction businesses who do a large proportion of their work as a contractor rather than direct to the end user, would be better off by doing a monthly VAT return


The guys and girls at Xero have been working hard to deal with this for you and here is a link to how to set up VAT Reverse charge on your Xero software

Click here for instructions on how to set up your Xero 

See video below for more instructions on how to set up your Xero

Alarm clock and eye mask

How to combat Zoom Fatigue!

Out of all the ‘new things’ that the Coronavirus pandemic has brought about (social distancing, lockdowns, and global remote working to name but a few), Zoom Fatigue has to be among one of the most frustrating effects. If you’re finding video calls exhausting and you’re barely managing to finish your day, you may be experiencing Zoom Fatigue. Here is what it is and how to overcome it.

What is Zoom Fatigue?

In short: ‘exhaustion caused by constant video calls.’ Although it’s not really an official diagnosis, psychologists have said that Zoom Fatigue is a real condition and that it is becoming increasingly prevalent in the era of remote working.

Why does it happen?

So what is it about video calls (whether on Zoom, Google or Skype etc) that makes us so tired?

Like most conditions, it comes down to a combination of factors:

  • Video calls require more mental processing than face-to-face interactions.
  • They force us to focus more intently on conversations in order to absorb information.
  • Our brains have to work harder to process many of the non-verbal cues that we rely on in-person (body language, tone etc).
  • Millisecond delays in audio can negatively affect our interpersonal perceptions.
  • Staring at a screen and trying to hold direct eye-contact for minutes at a time without any visual or mental break is tiring.
  • Seeing our own reflection makes us hyper-aware of our appearance and body language.
  • Many people use this time to multitask or they get distracted by other tabs on their screen.
  • Many of us are under additional stresses due to the pandemic (e.g. financial, health and/or family pressures) so we are already operating on our energy reserves.

How can I overcome it?

While you may be working from home and are having to participate in a lot of video calls (and there’s no avoiding this), there are a few things that you can do so that they aren’t as taxing. Here are a few things that you can try:

  1. Stop multitasking – trying to do something else at the same time as a video call (like checking your email) will only increase your fatigue, so avoid multitasking!
  2. Take breaks – you need screen-free time during the day so make sure to take breaks between meetings. If you can get outside, even better.
  3. Reduce on-screen stimuli – hide ‘self-view’ so that you’re not distracted by yourself on camera. Also close all other tabs, social media sites and your inbox.
  4. Make meetings shorter – if you really have to have a meeting, it doesn’t always have to be a long one. Try scheduling shorter time slots and make 30 minutes the default.
  5. Switch to phone calls or email – be honest with the person and say that you need a break from video calls, so would they mind a phone call instead. You might find they need the break too.
  6. Make virtual social events opt-in – while you may be organising virtual social events to bring your virtual team closer, always make them opt-in so that people who want to join can, but they are not obligated to.
  7. Set your own boundaries – start saying no to video calls that aren’t valuable. If someone wants a video call with you, give them other options to choose from.
  8. Schedule in ‘no meeting’ time blocks – your calendar can easily become overwhelmed with video calls, so block out some screen-free time to prevent this.
  9. Use technology to your advantage – we have so many ways to communicate, can you use What’s App or Loom to send a recorded/audio message instead of having a meeting?
  10. Practice mindfulness – breathing exercises, yoga or meditation can help you re-energise a little. Take a break throughout the day to find what works for you.

Don’t overexert yourself

Video calls can be really draining so don’t let them take over your day. Start by setting your own boundaries, prioritising yourself and how you wish to communicate, and schedule in screen-free time to recharge.

Everyone is trying to work at their best from home during such a difficult time, so if this means postponing a few video calls for your health, then do it!