3 top tips to get paid faster by your customers

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One of the biggest problems for small businesses is getting paid on time by their customers. Since Covid, this problem only seems to be getting worse as companies are less willing to part with their cash.

Here are our 3 top tips to get paid faster:

1. Send out invoices as quickly as possible:

Once work has been completed for a customer, make sure the invoice is sent out as quickly as possible. This may seem like an obvious point but we’ve seen it lots of time before, work has been completed but not yet invoiced for. Almost always, the reason is that the correct systems are not in place to prioritise the invoice being sent out.

By invoicing for your work as soon as it is completed then you are increasing your chances of being paid on time. Using Xero means you can even send out invoices from your mobile rather than having to wait until you’re back in the office. Win!

2. Use payment providers so customers can pay straight from the invoice:

When sending an invoice from Xero, payment providers, such as iwocapay, Paypal and Stripe can be added to an invoice template so a customer can make payment directly from the invoice. Making it as easy as possible for a customer to pay will speed up the process of them paying. We all like things to be easy!

iwocapay have gone one step further, giving your customers the option to pay now or pay over 3 instalments. Increased payment flexibility means more chance of getting paid and the best bit is, whichever option your customers pick, you get paid up front!

3. Chase your unpaid invoices:

Have a system in place to chase unpaid invoices. In Xero, automated reminders and chase emails can be set up to help do this automatically.

Sometimes a more personal approach can help speed up payment, so don’t be afraid to give your customers a call to check that they have received the invoice and ask when it will be paid. Sometimes business owners find this daunting or just don’t have the time to do this. If this is the case, then your accountant should offer this as a service, it will be called Credit control or something similar, so ask them to assist! If they don’t, we do, so get in touch today and start getting paid quicker.

Trivial employee benefits - a tax free gift.

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Our recent blog talked about P11d’s and reporting for benefits provided to employees by their employer.

Here we discuss Trivial benefits, which are outside the scope of the P11D and can be provided to employees tax free (yes, tax free!).

To be a trivial benefit, the gift must satisfy four key conditions:

  • it cost you £50 or less to provide

  • it isn’t cash or a voucher redeemable for cash

  • it isn’t a reward for their work or performance

  • it isn’t in the terms of their contract

There is no limit on the number of trivial benefits that can be provided to employees each year, as long as each gift satisfies the above conditions and isn’t a larger gift split into multiple payments.

For directors of close companies, there is an annual cap of £300 on the aggregate value of trivial benefits provided to each director in a tax year.

So go on, treat your team…. just make sure the treat meets these conditions!

P11D's: What are they and do I need one?

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Company cars, private medical, overdrawn directors loan account…..

If any of these sound familiar and are things provided to your employees, or provided to you by your employer, then you should be preparing a P11D.

P11D’s are an annual form that is submitted to HMRC by 6th July for any employee receiving company benefits.

The form works out the value of the benefit being supplied to the employee and calculates the Class 1A National insurance that the company must pay to HMRC for providing the employee with those benefits. This must be paid by the 22nd July.

The employee will pay income tax on the value of the benefit, either as part of their self assessment tax return, if they prepare one, or by HMRC adjusting their tax code.

HMRC Online Services - do you have a Government Gateway account?

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What is a Government Gateway account?

As a business owner it is important to have visibility over your taxes, whether that is Corporation tax, PAYE or VAT. HMRC Online Services provide this overview using a Government Gateway account. We would recommend that all business owners set up an account., especially since HMRC is working to become one of the most digitally advanced tax administrations in the world.

How do I set up an account?

Firstly, you will need to set up a Government Gateway ID and password. To do this, navigate to the GOV.UK website, click ‘Create sign in details’ and follow the set up process.

Once the Government Gateway ID account has been set up, you will need to add all the relevant taxes for your business including:

  • Corporation tax - all Limited companies should add this tax to their account

  • PAYE - all employers should add this tax to their account

  • VAT - all VAT registered businesses should add this tax to their account

To add taxes to your account, login to your Government Gateway account and click ‘get online access to a tax, duty or scheme’, then follow the steps.

My account is set up and I’ve added the relevant taxes, what now?

Now that you’ve got the account set up, you can use it for so many things, including:

  • Checking payment dates for taxes

  • Checking references for tax payments

  • Making tax payments

  • Setting up a VAT direct debit

  • Viewing the VAT certificate

  • Updating the business address with HMRC

Don’t delay, set one up today!

Bookkeeping vs Accounting

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Bookkeeping and accounting, they’re the same thing right?

Wrong.

They’re linked yes, but they are two different and equally important parts of managing finances.

In our opinion, the two can be defined as follows:

Bookkeeping

The processing and organisation of financial transactions and information.

In it’s most basic form, this includes invoicing, recording receipts and bills and reconciling bank transactions. However, bookkeeping can incorporate other tasks like payroll, credit control and supplier payments.

Accounting

Analysing the data and processing reports using the information collated during the bookkeeping process.

This covers the statutory reporting like annual accounts, VAT returns and Corporation tax, but also incorporates advisory reporting like management accounts, KPI analysis and cashflow forecasting.

Put bluntly, if the bookkeeping is rubbish, or not kept on top of, then the accounting is going to be more difficult, take longer and not produce timely reporting.

With this in mind we promote and carry out real time bookkeeping using cloud software and automation to make the process as slick and smooth as possible.

This makes the statutory processes much more straight forward and the advisory reporting possible.

If you’re not getting this service from your accountant/bookkeeper then you should be!

Time to pay the deferred VAT payment...

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Cast your mind back to this time last year, the start of lock down, and you may recall Rishi Sunak announcing that VAT payments due between 20th March 2020 and 30th June 2020 could be deferred.

Well the time has come to think about paying those back.

Since the country is still in turmoil. businesses have two options to clear their VAT debt:

Option 1:

  • pay the deferred VAT in full, on or before 31st March 2021

Option 2:

  • join the VAT deferral scheme before 21st June 2021 to spread your bill over a number of monthly payments (between 2 & 11 depending on when you opt in)

Don’t bury your head in the sand, make sure you decide which option you’ll be going for and act on it.

5 tips to build a more sustainable business

/ Lodestar Accounting Limited/

Sustainability and climate change are hot topics at the moment (excuse the pun). In our personal lives we are being pushed to think about ways we can reduce our impact on the environment. But why should this be restricted to personal lives only?


Here are our top 5 tips on how businesses can reduce their impact on the environment and increase their sustainability. These ideas are all things we've implemented at Lodestar Accounting to make sure our planet is looked after for the next generation 🌍

1. Switch loo roll

We recently switched to eco loo roll Bumboo which is made from bamboo. 🎍

The toilet roll is super soft and comes in extra long rolls. With plastic free and 100% recyclable and compostable packaging, it's a win win. They also plant a tree for every box purchased! 🌱

If you don't want to commit to a box of 48 rolls you can order a free trial box and just pay for delivery. Go on, give it a go, what have you got to lose!

2. Use technology for web meetings to cut down on travel emissions 🚗


We are Google lovers and use the whole of GSuite, so naturally our go to web meeting tool is Google Meet but there are loads of amazing apps out there that do a similar job.


Being a remote practice, we use Meet for internal meetings all the time but we also use it to keep in touch with our clients who are based all over the world. 🌍

It seems likely that quite a few more business will be using apps like this over the coming weeks to reduce the spread of coronaviris 😷

3. Change from single use plastic cleaning products 🧹



With spring cleaning well underway (and coronavirus 🤒) lots of people will be stocking up on cleaning spray and wipes.


Why not take this opportunity to switch to a greener cleaning product? ♻️ Ours was sourced by Omniwise and we've not looked back!

This cleaning product is packaged in dissolvable capsules which you pop in the reusable bottle with some water and hey presto, you have an all purpose cleaning spray!

4. Be paperless (well almost....) 📝



When Lodestar began, we made a conscious decision to be a 'paperless' firm. We quickly realised that no business can be 100% paperless but we'd say we're a good 95%.

All businesses receive post and have certain documents that must be printed so it's very difficult to be 100% paperless (especially when you're dealing with HMRC!) but we always choose to remove paper where possible. 🖥

The photo beneath is only our second ream of paper in 3 1/2 years so I'd say we're doing pretty well 😊

5. Use your local milkman 🐄


This is a win win as you're not only reducing your single use plastic but also supporting your local dairy farmers.

There is a small price increase involved in making the switch but it is far outweighed by the great feeling you get by helping the environment and local businesses 🥳🥳 Switch today!

Here’s a bonus tip! Switch from plastic bottles of hand wash to paper wrapped soap.

There are so many businesses offering beautifully hand-crafted soaps with eco packaging that it’s hard to pick, so why not be adventurous and try a few different ones?

So there are our top tips for creating a more sustainable business. There is so much going through our brains as small business owners, decisions to make and hat’s to wear, however, we urge you to consider the environment when making choices. Making any of these changes will have a positive impact on the environment, so pick one and start the ball rolling on your eco journey.

“You are never too small to make a difference”
— Greta Thunberg