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Constable’s Curtain Services

Contact: Curtainman
Address: 1st Floor, Station House, Tarring Road, Worthing, West Sussex, BN11 4SR
T: 01903 505080
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Constables Curtain Services are specialist Curtain & Soft Furnishing makers. Specialising (but not exclusively) in working for the trade. Trevor the proprietor…

Listed in: Interior Design & Refurbishments

New Client Referrals

Those of you that know me and work with me know I value good marketing as a key part of running any business. You can be the best at what you do, be able to save clients millions of pounds or have invented the greatest thing since the bread slicing machine, but if you do not tell people about it how can you ever expect to grow a business from it?

It’s interesting what constitutes ‘marketing’ these days and as the years go by I understand how broad and deep it is as a concept. Underpinning any outbound marketing activity however, must be the delivery of a quality service/product. Just being good at what you do, keeping your promises, providing value for money and looking after your clients is probably the most fundamental part of any marketing.

Yes, there is a bit of chicken and egg about this – you of course need to win clients before they can enjoy the quality of your service – but good customer service and product quality should be your biggest priority from client one. Why? Well there is the old adage that it is far easier (and cheaper) to keep a client than have to go and find another but each client is also a marketing opportunity as a referrer. If they are impressed by their experience with you, they might recommend you or introduce you to a friend or colleague.

Whilst I happily invest in my own marketing and enjoy a steady stream of new business from it, I am very proud to say that referrals remain my single biggest source of new clients. One day in October heralded three referrals, two from existing clients and one from my former childminders’ daughter. Given that my children are now all grown up this latter referral really introduced a sense of pride and confirmation for me that having a good reputation in business is worth its weight in gold and can remain in people’s mind for some time.

The added benefit of good customer service for me is the fact I enjoy what I do and feel fulfilled by doing a good job, so it’s not hard work in my eyes. But even still, the secondary endorsement that a referral provides is incredibly satisfying. I take the fact that my clients pay my bills each month as the main source of client satisfaction but when those busy business owners take time out of their day to recommend me, that’s special.

So, fostering referrals ticks a number of boxes – marketing, customer service and reassurance that you are doing the right thing!

The Business Lifecycle - What stage is your business at?

The Business Lifecycle – What stage is your business at?

Exactly as for us human beings, there is a business lifecycle. If you think about the range of businesses you know, you will probably be able to identify a handful by each stage – new born (start up), adolescent/teens, young adults, mature grown-ups and then those that have seemingly been around forever – the elders.

Sadly, as in life, there will be those that never reach full maturity, those that go too soon and those that seem to reach early maturity and then plateau. Whilst a business does not physically age its thinking can become slower or dare I say, set in its ways. Businesses can and regularly do suffer from a midlife crisis, or even experience illness, something that stops the business functioning at full potential.

For those of you with children or those can still remember how it felt growing up, you will appreciate that at each stage of the cycle you think and act very differently and businesses are no different. Working with a range of business, I have become used to seeing the traits at each stage of life:

New Born/Start-up – It’s all new and exciting, you’re learning all day everyday. You’ve got so much to do but you’re not always quite sure what to do first. These businesses need help, support and nurturing but may not be able to ask for it or know where it is best directed.

Adolescence/Teens – You’re educated, you have grown up and you’ve overcome the statistics that dog many start-ups – you have a spring in your step, you’re confident. But with this comes opinions and the risk of complacency – you know it all! You can make some bad decisions in these years or you can find a strong role model/mentor to help guide you.

Young adults – You’ve been learning for years and finally it all makes sense. You can now put that knowledge to good use and whilst you have been growing until now, this is where the real growth takes place. You now understand what works and what doesn’t and you probably have the experience of failure or getting things wrong, which is hugely valuable and means you have lost the teenage swagger, ensuring your decision making becomes more balanced. You know when and where to ask for support, and do!

Maturity – The established business. The product, the brand, the service, the people have all become defined. You’ve finally grown into the body and mind you have had for many years. The years seem to follow a natural pattern. You’re continuing to grow but the growth comes from strategic planning and is tangible. You will have a good support network built around you – mentors, outsourced support, partners, friends and challengers.

The Elders – You’ve made it. You’re wise enough to know you are not bullet proof and cannot simply sit back and expect it to happen, but you know how to use the levers and buttons that make it happen and know what to do and when. You accept that your clients, your staff and your partners will come and go but a strong core have been around for a very long time.

Knowing what stage of the cycle your business is at will help you get into the correct mindset for the challenges that you will face and also help you to prepare for what will come next. Remember though, like people, no two businesses are identical and so you need to understand your business fully and take guidance from others rather than seek to mimic what you perceive to be success.

Why I extol mentoring for anyone running a business

I’ve recently had a revelation and I’m keen to share this with as many people as will listen! I’ve discovered the benefits of mentoring…


As a small business owner, you suddenly have to become adept at everything a business requires, in order for it to run smoothly; planning, finance, networking, website development, IT, human resources… when all you may have wanted to do was bake some pies too sell!


It can be such a lonely existence at times and it really makes a difference if you have someone you can go to with challenges, ideas, concerns, suggestions, frustrations – even rants!


I found my mentor within one of my business networks – in the bookkeeping circle. I felt I needed someone with more experience than I have and someone who knows and understands the business I’m in. And my mentor ticks all those boxes.


Having agreed the mentoring relationship, within just one week of our first phone call, I had everything set up as suggested, and in this short space of time, I went from ‘panic and give up’ to simply getting things done.


I found myself under pressure to outsource some of the day to day office management work so that I could continue to deliver to clients – but it was no one’s pressure but my own!


Having grown 10% in last 12 months, it was important to me that I continue to deliver the quality of work that Nicki Paddy and Co is known for delivering. And in order to do this, I had to admit that someone else might be able to look after the day to day running of the office!


Since I’ve been working with my mentor, business has grown approx. 20% - and my 2017 year-end looks as though growth will have been more than double that this year. Of course, erring on the side of caution, as most good bookkeepers should… extreme growth can cause concern but it depends on what kind of growth, what structure the business is operating in and within which sector.


For Nicki Paddy and Co, this has been a really interesting time and I’m not only streamlining the way I work personally, but also streamlining how I work with clients, which I hope makes it more efficient and effective for them, as it is doing for us.


So, my mentor provides me with focus, guidance, objectivity and acts as my ‘critical friend’. I know that if he is critical of something we’re doing, it is because he has the best interests of Nicki Paddy and Co at heart.


The amazing thing I’ve found is that often I have the answers already. I just need the clarity of thought as to which is the right one. And this is what my mentor gives me.


If you reach the decision to outsource your bookkeeping, give us a call.

One size fits all – or does it?

To many, bookkeeping is just a process which is applied to all businesses and to some extent, they are right. But what makes each set of books intriguing and engaging to us bookkeepers and accountants, is a combination of the demands of the sector a business operates within, combined with the nuances which make each individual business unique…

Different sectors require different approaches to bookkeeping – and attitude of bookkeeper! There are different demands on cashflow – and indeed, cash flows differently, too. Some of the distinctly different sectors that come to mind are:


Construction is a well-known, text book example for trainee bookkeepers. This sector is governed by the CIS – Construction Industry Scheme which sees contractors deduct money from a subcontractor's payments and pass it directly to HM Revenue and Customs (HMRC). The deductions count as advance payments towards the subcontractor's tax and National Insurance. A very efficient system but, if you’re new to the sector, the mismatch between payment you receive and the payment you expect can be a shock!


If you make products, you may have a seasonal trend that affects your cashflow, so you need to make sure it doesn’t lead to a ‘feast or famine’ situation. So, if you’re in the chocolate industry, for instance, make sure you produce more than just Advent calendars!

Additionally, you need to proactively manage the purchase of any components, equipment and machinery. Although this likely signals an exciting in your business, these investments demand up-front expenditure, likely to be well before you see the return in revenue once the products are on sale.


Likewise, stock and inventory management can be a challenge regardless of industry. Whether you manufacture or trade in tea, shoes or greetings cards, you’re likely to experience upfront costs for stock which you need to store before you can enjoy the revenue. So again, cashflow needs to be managed carefully.

Heritage craft businesses

Being in bookkeeping, on one hand, I’m glad to say that ‘creativity’ is not something I get involved in! But on the other hand, I truly admire creative people and those who work with their hands.  But one thing I have noticed is that creative people are usually supreme at designing and making things, but their ability to manage paperwork can be limited! So, if you're one of these types of people, I do recommend that you keep everything & throw away nothing!


Consultants are an interesting group of people. Everything is usually very much in order and everything has its place. They know what they need and what they need to achieve it. This means that they recognise quickly when they need an external perspective or a certain task or role is not within their skillset – and they get outside help. So, for Nicki Paddy & Co, our remit with consultants and consultancy businesses is usually crystal clear!

So, you see? One size doesn’t really fit all. But luckily here at Nicki Paddy & Co, we’ve worked in and with so many different types of organization, that we can adapt to whatever it is you need – and if you are unsure, we can provide you with some guidance.

Self Assessment Tax Returns – 5 Minutes a month makes all the difference – I promise!

Phew! Self Assessment deadlines are over for another year...  

Well done for getting yours in on time! But could it have been smoother? Here are some simple ideas to prepare for your tax return - next year!

The following five points will help you keep on top of the process throughout the year and avoid a last minute dash.

1. Note Down 5 Figures Every Month

Each month write down the following figures:

  • Salary – Gross, tax, bonuses, commission, NI, sickness if employed, if self-employed make a note of your sales and expenses in the month and place them in a file.
  • Dividends – Money received from shares held
  • Tax credits/benefits – Paid directly to you
  • Expenses – Those paid by you in cash or card and update mileage details/costs claimed, print out the electronic copies of receipts from your email while they are still fresh.
  • Additional income – Rents, lump sums, other income, cash receipts

2. Photocopy Useful Documents

Take copies of Payslips, dividend vouchers and letters from HMRC and pop them in a folder with my name on it!

3. April Bank Statement

To avoid having to request paper statements, sit down in April and print/download your statements from 5th April the previous year for 12 months. You will need statements for your own personal account and any joint accounts where you are named.

4. Create a Share Calendar

If you hold shares, make a note of the company name, number of shares held and the value per share at the end of each month.

5. Investment List

Create a list of all the investments or assets you have including ISAs, property, shares etc. Make a note of what you paid for them originally and the cost of any enhancements you’ve made. This is quite a useful exercise, so you can remember exactly what you have! That way you will also have the information to hand when you need it.

Some of these are one-off actions and some occur every month, but if you carry them out at the time, it is far easier for you, will only take around 5 minutes of your time and will avoid the very real risk of submitting a late return by leaving it until the last minute.

Let me know if you need any help!

Global Bookkeeping Week

Following the success of last year’s first-ever Global Bookkeeping Week, The Institute of Certified Bookkeepers is once again hosting a worldwide celebration of the bookkeeping profession. Between Monday 12th and Friday 16th September, tens of thousands of bookkeepers will be taking part in the week.

The week focuses on education, community, networking, Q&As on Twitter, prize draws and much more! The aim of the week is to promote the importance of bookkeepers to small businesses and ensure members continue to keep abreast of best practice from leading industry experts.

This year I will be attending the hugely popular ICB Global Bookkeepers Coffee Meet-up, which takes place on Wednesday 14th September. The Meet-Up is the perfect opportunity to learn and network over a cup of coffee, whilst submitting a selfie of “raising a cup” to bookkeepers worldwide. Last year a frenzy broke out with around 100,000 bookkeepers from around the world sending in their photos, so I’ll be sending one in !

Please join me and raise a cup of coffee to us bookkeepers and send in that selfie.

It’s a hugely significant date in the calendar and I’m excited to meet new and familiar faces from around the world.

For further information on the event, please click here.

So, we did it…gulp – what next?

Back in June I wrote about the looming referendum vote and what I could see were the ups and downs of staying and going. Now the decision has been made, like me, you have probably been inundated with invitations to briefings from various self-appointed commentators on where this leaves us and the potential impacts of what we now refer to as ‘Brexit’.

What seems clear to me, having sat through several presentations and read numerous newsletters, opinion articles and eshots, is that nobody really has the first clue as to how this is going to play out. The political void we were left with after 23rd June proves that very few people were even ready for a vote to leave; I am aware that a number of major investment houses and financial advisory businesses had not even prepared a ‘we’ve left’ position and were somewhat caught on the hop as a result.

Talking to clients and contacts at meetings and networking events, it is still a hot topic for business as we all know that uncertainty is rarely a good thing in economic terms. But given that we don’t really know any more than we did on the 24th June, how do we, as businesses, prepare?

My personal view is - apologies for the sporting analogy here, but with the Olympics currently in progress - the next two years look like they are going to be more akin to the 400m hurdles than the high jump… We will go through a series of stutters rather than endure a single point of impact. 

Things seem to have, for now at least, settled down and little ever happens politically whilst school is out; so for many of my clients it feels like business as usual. When the Autumn comes (that assumes we had a Summer!) I can foresee and would actively recommend a degree of preparation be undertaken by businesses big and small, so they are as robust as they can be to face whatever may, or may not, transpire.

Here are some key tips – financial of course – you may like to consider:

Cash – remains king and always will. Keep an eye on your cash position and regularly revisit cash-flow forecasts

Debtors – Keep them in check. Whilst the direct impacts of currency and uncertainty may or may not hit you, remember they may also affect those you trade with

Assess risk – Before you go into any new deals/contracts carry out some additional due diligence on your client to assess their exposure to international markets and don’t be afraid to ask for some early upfront payment or tighter terms

Move money around – with the realistic possibility of negative interest rates and a weakened GBP rate, it may make sense to put reserves out to pasture for 6-12 months to try and get some return, or repatriate overseas profits now, as they will be worth more

Focus on reporting – Gut feel is great but nothing beats hard reports with year-on-year comparisons, trend reporting and the good old P&L. Spotting a positive or negative trend early allows you to act and either nip it in the bud or enable you to exploit an upturn

Search for opportunities – many will see opportunity where others see increased risk and they are right. Market fluctuations, impacts on your competition may open the door for your business so stay alert to new ideas and opportunities. The resultant trade negotiations may open up new markets for you.

Remember that nothing with VAT will change until new legislation is passed, which will probably wait until after everything is finalised – so all returns and reporting still need to be submitted including the EU returns of Intrastat and EU Sales lists and Reverse Charge Lists.

Fifth birthday celebration

As of this summer I’m delighted to announce that Nicki Paddy & Co celebrated its fifth birthday and I took a little time to reflect on the achievements and challenges we’ve faced along the way.

Starting out in business as we came out of one of the greatest recessions in decades was certainly not easy and carried with it a variety of distinct challenges. But I wouldn’t change it for anything. In fact, I would recommend it!

Starting the business during an economic downturn presented with it a unique set of challenges that altered my objectives and shifted my operational requirements. I had to be customer-centric from the start and – operate leanly as an organisation from the word go, ensuring I always at least met clients’ expectations. It’s this level of focus which I believe has been the cornerstone of Nicki Paddy & Co’s success and now, here I am celebrating our five-year anniversary – it would appear I’ve done something right!

It’s always incredibly rewarding, and a positive indicator to realise that clients who started out with us still continue to use our services today. I would like to thank all of you for your support.

That’s not to say that it’s been ‘plain sailing’ through these five years. There have been plenty of challenges along the way. But interestingly, it’s in facing these challenges that you learn the most about yourself and your business. Importantly, it’s been an enjoyable journey and I look forward to many more years ahead. Next stop – our ten-year birthday! See you there.

Dividends…how will the changes impact you?

Individuals and businesses who pay small salaries followed by much larger dividend payments should now be aware of the changes which took effect from 6th April this year.

The taxation on dividends, as announced in the Summer Budget 2015, means that the previous 10% tax credit on dividends has been abolished and replaced with a £5,000 tax free dividend allowance. However, any dividend extracted that exceeds £5,000 will be subject to tax depending on your tax rate – 0% if still within your tax free allowance, 7.5% for basic rate, 32.5% for higher rate and 38.1% for additional rate payers. Those with any dividend received by pensions or ISAs should not be affected.

How will the changes impact me?

Essentially, when this is put into practice it will mean that basic rate taxpayers receiving dividends in excess of £5,000 will inevitably be paying more tax. This is because previously they will not be paying any tax on dividends, whereas with the new tax system they will effectively be paying tax on any dividend extracted that exceeds £5,000.

Those individuals who are basic rate payers and who previously received dividends in excess of £5,001 and with a fantastic bookkeeper (no plug there!) should have declared their available dividends prior to 6 April in order to manage them effectively.

If you are concerned about how the new taxation to dividends is affecting you so far, do get in touch I’d be delighted to have a chat:

Chasing the penny – why different systems add up VAT differently…

For businesses providing goods or services to people, one of the most important tasks is the calculation of VAT values. This allows you to put a fitting pricing strategy into action or to reclaim the accurate amount of VAT.  A business may choose to use software which provides one of two calculating systems to add up their VAT on an invoice.

The software which uses ‘System 1’ adds 0.2% (for VAT) of the original value to each component. The new component values are then totalled to produce the Total Value.

Initial Value VAT New Value
  £1 20p £1.20
  £3 60p £3.60
  £2 40p £2.40
Total £7.20

Alternative software will use ‘System 2’ to work out the Total Value of all the components and will then add on 0.2% for VAT.

Initial Value VAT New Value
Total  £6  £1.20 £7.20

If you were only dealing with whole values, whether the software used System 1 or 2 to calculate VAT wouldn’t make a huge difference. However, this is rarely the case and when even just pennies are involved, a business can easily run into complications, causing your accounts to look out of sorts. When software calculates the 0.2% VAT value for decimal points, there will be occasions when the amount needs to be rounded up or down. This can alter the Total Value depending on the methods of the software.

Additionally, if your business sent an invoice to another and both employed software which used different systems to calculate the Total Value, there would be a strong possibility that two invoices would be produced with conflicting Total Values. This can result in unallocated cash and an obvious administrative mess!

For bigger businesses which trade in volume markets, the difference can be more substantial and extremely problematic. In the retail market especially, there are countless ‘0.99p’ deals and we have seen multiple cases where the system of VAT calculation used by a company’s software has led to a difference in Total Value by vast amounts.

Keeping accurate financial records is not just a legal requirement but it also gives you a useful indicator of your business operations and performance. This can consequently affect your Annual Accounts, Tax Returns and Credit Control.  Understanding VAT calculating software and the systems they use can make a massive difference to your business and accounts.

For advice regarding VAT calculation or if you face concerns in your business due to VAT miscalculations, email us via or call 01243 92989

Stick to what you’re good at!

It’s rare to see a business owner without a fantastic skill set; be it a creative eye, a knack for numbers or the ability to talk pretty much anyone into doing anything. Yet, (no matter how much we try and convince ourselves!) we can’t be good at everything.

Keeping accurate financial records is a legal obligation for any business and it is therefore vital that, even if accounting isn’t your calling in life, you don’t just bury your head in the sand. Keeping healthy accounting records can provide invaluable information about your business performance, financial position and provide a marker on how close you are to achieving your goals.  Any business should therefore value the importance of taking good care of their accounts and their records.

I know a wood sculptor who, although the most amazing craftsman, simply has no idea about paperwork. He needed help and came to us for advice. Sifting through the vast array of documents he had collected over the years, we created an effective organisation system that made tasks such as VAT calculations and credit control an easier and more accurate process. He could also compare previously estimated business performance against up-to-date actual facts and figures.

In cases like this, professional accounting advice and services can make the difference between seeing your business blossom into its full potential or falling into accounting chaos. Whether or not you have a keen eye for figures shouldn’t determine the success of your business. Whilst you focus on your strengths, we focus on ours.

Bringing a qualified bookkeeper on board offers an external perspective on your accounting decisions and can ease the mêlée of annual accounts, tax returns and credit control. We can adapt our services to best suit you, whether you need one off advice or retained support, on an hourly or fixed rate, via your preferred method of communication.

If your skills lay elsewhere and numbers just aren’t your thing, email us at or call 01243 92989 for more information about the services we offer.

Different sectors require different approaches

There is no ‘one size fits all’ answer when responding to the needs of business accounts in different sectors. All businesses often face unique and highly-demanding accounting challenges which are specific to their area of the market. Understanding factors such as cash flow and credit control are essential when identifying what makes a business tick and, subsequently, which services or products would be most valuable.

Cash Flow

In some areas of the market, seasonal restrictions dictate an ‘a-typical’ pattern of cash flow. It is normal that agricultural businesses face large costs from January to September, for example, as they plant, grow and harvest their crops. When these crops are later sold, the result is a flash-flood of revenue, followed by a calmer period when the fields lie fallow.

You may see a similar pattern of cash flow in a business which imports a large amount of stock, paid for upfront, from China and which doesn’t arrive in the UK for a long time. Documenting this ‘ebb and flow’ nature of cash flow can be complicated, with regard to both everyday bookkeeping and when drafting your annual accounts. Seeking professional advice can therefore be crucial in steering your business onto a course of smooth sailing through the next accounting year.


Maintaining credit control is a key component in the underpinning of positive cash flow. This task can be more or less demanding depending on the nature of your business. In larger industries that work with lots of clients, there may be a mountain of smaller invoices.  Recording and chasing all of these can turn into a tedious and time-consuming job, compared to a business that has fewer invoices of higher value.

Credit control isn’t an easy skill to master, especially if you find yourself in these situations. Not only does your bookkeeping have to be kept in order and up to date, but you may find it difficult to ‘demand’ the money that is owed to you. Here at Nicki Paddy & Co, we can locate your outstanding invoices and take charge of your outstanding credit, giving you less to worry about!

For more information or for help regarding the specific issues your business faces email us at or call 01243 92989

Why your PAYE changes throughout the year

One of the reasons many small businesses set up a PAYE scheme is to have better control over their outgoings each month. They know their staff will be paid and they know what’s going out of the bank account.

One of the questions I often get asked by my clients is: with so much certainty in the system and monthly salaries not changing, why does the monthly payroll amount change throughout the year?

If the amount that the payroll changes each month is relatively small, to within a pound or two, it is because the tax tables HMRC uses to calculate income tax don’t use odd pennies. So monthly deductions do vary slightly.

It is not unusual for employees to have incorrect tax codes.  In particular, they may not have notified the tax office of changes in their circumstances that would affect their tax position, such as changing jobs and / or losing the benefit of a company car, or they may have started investing in a pension.

Needless to say, the overall salary amount people get paid over the year evens out, but this is why you need to approve your payroll amounts each month and why they may be slightly different.

If you think your PAYE code might be incorrect or you’d like it checked, let us know, as it is much easier to rectify mistakes before the tax year ends.

Helping to reduce the hanging overheads

I am often asked for help with reducing overheads in order to brighten monthly forecasts but in truth, there is no definitive solution. Whilst you can take steps to reduce some of your overhead spend, the nature of running a business means there is only so far you can go! Here are a few key pointers that I would recommend considering:

Tip 1:
Go paperless
Breaking away from the tradition of filing cabinets and mounting paperwork may cause a ruckus in the office but will benefit your business in the long term (and can help save the planet too!). Try backing up all your documents onto a cloud or online filing system. That way, you can reduce the amount of paper which will in turn reduce costs on toner, ink, paper and electricity. You could then sell the filing cabinets for extra cash – win-win!

Tip 2:
Hire the RIGHT people
Productivity is key to your business, so hiring the right people is so important. When making crucial hiring decisions, ensure that the candidate is willing to help maximise revenue and is keen to aid towards the growth of the business. Before any of this, I would suggest considering whether employing an additional member of staff is actually necessary or whether you can keep it internal by training existing staff in new areas. It’s something to consider…

Tip 3:
Find the perfect office
Take a look around your office…do you really need all of that space? How high is your ‘desk-to-person’ ratio? As workforces ebb and flow over time, internal office reviews rarely take place. Consider where your office is; remember that central city complexes will often carry a higher price tag – plus cost for parking in some. Think about whether you actually need an office space; could you move to a serviced office, or take advantage of utilising meeting spaces ad hoc?

Tip 4:
Review your utilities spend
Utility bills are an unavoidable cost to your business but are a key area to review. When contracts are being renewed, ensure that you are getting the best deal by shopping around and using price comparison sites. Is the electrical equipment turned off when the office is empty? It might even be worth investing in an energy efficient heating system. Take the time to consider how you can cut down your utilities bills by accounting for each item.

Reviewing your overheads should be a regular, ongoing occurrence. Whilst we tread carefully when considering costs within our businesses, we rarely reflect this caution within our accounts at home. Cost cutting exercises aren’t just for your professional capacity, the same review should be carried out at home, too, to ensure maximum value at minimum cost.

It’s important to note, however, that these cost-cutting tips will not drastically rejig your monthly forecasting chart. Be sensible in what you think you can actually achieve, by stepping realistically and carefully.

For a point in the right direction I would be happy to have a chat.

Break even point - where’s yours?

I am often asked what my key priorities are when running a business and for me, its knowing my break even point ranks alongside cost prices, current stock holdings and most importantly, the bank balance!

Why is it important?

It is important to know what your break even point is for planning purposes as it will allow you to make decisions regarding additional costs, new staff or sales. For instance, if you know your break-even point, you can calculate the volume of sales needed in the top of the funnel to ensure that you turn a profit. You can then extrapolate this and carry out a ‘what if’ analysis e.g. what does it look like if I add another £20k salary into the business, what increase in sales do I need?

Is it the same every month?

No, the break-even point is not necessarily the same every month and this will depend largely on the line of work you are in. Most service businesses will have a relatively static underlying cost base but a manufacturing or distribution business will fluctuate based on demand, seasonality and purchasing costs.

Some businesses that have a more variable monthly break even point will take an annual view, once they are comfortable with what an ‘average’ year looks like.

How does it change?

The break even point is made up of a series of fixed and variable costs associated with running the business. Some aspects will be linked to each other with an increase in one resulting having a knock on effect to associated costs but others will be fixed and will allow for a degree of pressure before they need to change. A good example of this is the effect of increased staff levels.

Adding a new member of the team may mean additional IT costs, extra salary payments and may even increase the cost of utilities (although marginally). Assuming that you have space, the cost of rent does not change for the addition of another head. In this instance the proportional cost per head actually drops for rent. It is only when you run out of space that you need to consider increased establishment costs – but then the process simply starts again and you can plan for further expansion.

What do you do with the information?

I have seen some businesses use their break even point to determine pricing structure. They know that after X point in the month (in some instances they even know this down to the date) everything after that is profit and therefore will not negotiate on anything up to that point, but once break-even is achieved/passed, they relax their pricing strategy. In one instance I have witnessed ‘accelerators’ whereby for each % past break-even, the pricing strategy relaxes further still. When the calendar clicks over, the handcuffs are reapplied and the price charged for the service is set back in stone. It might sound rather iterative but it worked for them and led to a stronger, more focused sales team.

So knowing your break even point can make a massive difference to how you plan and how you sell. But aside from all that, it proves that you know how you company ticks and what it needs just to open the door each day. It certainly keeps you focused. To find out how to determine your break even point get in touch – I would be happy to help.

10 steps I go through when recruiting and training

In response to growth in size of many ICB practices, I’ve put together ten top tips on taking on new staff and training them up…

1.  I believe firmly that all bookkeeping offered by the practice should be carried out by members of a professional institute operating under a Practice Licence, with PI insurance and professional bookkeeping qualifications.

2.  I insist that anyone I take on to train from scratch is already an ICB Student Member.  That way they have already paid student membership and have shown some commitment to the role.

3.  Before we begin their training programme, I put in place contracts with clauses to ensure they do not poach my clients once I have trained them. I am open and up front with them about this when discussing the job with them.

4.  As my staff are either in other full time work with this as an additional skill, or are new to bookkeeping, we agree hours of work to suit both parties and they start on a very part time basis initially and then build up hours as their skills progress.

5.  I believe in training my staff with a mixture of on-the-job training and private study time.  The on-the-job training involves me showing and taking time to explain to them what I want them to do.  The study time involves the trainee using textbooks, CDs, the internet, etc. or, if available locally, college time. The investment of my time often involves some out of the box thinking when things have not gone in. If something has not been understood fully, it is not the trainee’s fault, more that the trainer needs to find other ways to explain until it becomes clear. I use this philosophy not only for staff but also for clients.

6.  Training your staff is rewarding. As a bookkeeper I like things done precisely and to certain standards. If I take on staff with little experience of bookkeeping then I can mould and train them to work to my exacting standards.

7.  As you work with your trainees and introduce them to new skills, which in itself is rewarding, you also benefit from the knowledge that you have some kind of certainty as to the standard of work they are producing. Whilst you need to invest your time up front with them, the future benefits of this are enormous.

8.  Nurture your trainees!  That way they will always ask whenever they come across things they are not certain of, meaning that there will be less time lost for the bookkeeping practice correcting errors.  Also, if you teach them how to correct their own errors, the work arrives back to you in a better state and again saves you time normally spent reviewing their work before passing it on to the client.

9.  Always see your time spent training as an investment for both employer and employee. Whilst it may take the trainee slightly longer than you to complete the work, it does free you up to get on with more of the advanced level work, safe in the knowledge that your trainee is completing the work to your standards.

10.  Pass the benefit on to your client - we charge less for the trainee to complete the work, meaning that the client saves some money on their fees and the bookkeeping business generates money whilst the trainee is working on the client’s books.

I hope that you have found these ten top tips on training new staff useful. If you wish to discuss any of the points further, I would be delighted to have a chat here.

Trading with online marketplaces

With the rapid decline of the high street and the ascendance of online sales, more and more businesses are using internet channels as a prime source of revenue.

As well as your own website, the option to sell on third party online marketplace platforms such as eBay, Amazon, and Etsy etc. can be a major draw. For a % of each sale, these online goliaths introduce you to a market you would struggle to find without massive investment in marketing. However, fore giving you access to their customer base, their marketing machine, their payment solutions and everything else you get to boot, they do expect you to trade on their terms.

From an accounting perspective you need to be aware of how to treat this though.

Let’s use Amazon as an example.
If you sell something on Amazon for £100.00 including VAT, Amazon will pay you (say) £80.00. The missing £20.00 is made up of an 18% service charge and a £2.00 credit card processing charge. You receive the net figure of £80.00 payment into your bank (normally fortnightly). However, the sale in terms of your accounting is not just £80.00. You still have to account for the full £100.00 and the VAT within that.

The charges from Amazon need to be shown in your cost of sales but this cannot be achieved via the sales ledger. Therefore you cannot raise a £100.00 invoice with a minus figure of £20.00 to get to your £80.00 net value.

Instead you will need to raise a sales invoice for £100.00 including VAT to the end user (with shipping address) and a separate 2 line purchase invoice to Amazon, as a supplier, for the credit card charge and the service charge. 2 lines as these will invariably be accounted for separately. You will need to receive £100.00 into your bank account for the sale and make a payment of £20.00 to Amazon for the charges – making your bank receipt a net £80.00

Dependent on the terms of your relationship with Amazon, Amazon may actually be your customer, not the ultimate end user. In this case, and subject to your accounting system, you may be able to ‘contra’ the revenue and the cost i.e. using one to pay off the other, but for most small companies this type of corporate level trade with Amazon is rare.

So whilst Amazon and other major online channels may appear to offer a road to riches, it is worth making sure that you know exactly how they will trade with you and the impact on you from an accounting and cost of goods sold perspective.

You will also need to bear in mind their returns policies – the customer is right.  If an item is bought through one of these sites and returned to you in no matter what state (even if the customer has damaged it – the customer will get their refund one way or another – either from you or via a charge back from the site.  It can be time consuming trying to dispute this with these giants.

If you’re unsure about how this might impact your cashflow, the world of online marketplace and business, we’d be happy to chat it through with you.

How can a bookkeeper help grow your business?

How can a bookkeeper help you grow your business?

‘Doing the books’ is often viewed as a necessary evil in small, growing or start-up businesses. Our experience also suggests that the role of accountant or Financial Director is one of the last functions created in a business; unless a shareholder or director has experience in this field and has capacity to cover dual roles.

On the whole the financial roles are not seen as income generating, therefore if a business can cut costs in this area, it usually does and the finance function is typically the first area of a business to feel the pinch.

The result is, the job of doing the books is under-resourced or simply passed to someone with sufficient ability to meet the minimum demands of invoicing and cash control; with the external accountants picking up all other aspects of the accounting.

Whilst this method gets you by, it can be costly and is only achieving a minimum standard. Also it can have an effect whether the work is done on a regular on-going basis, or as a one -off hit after the year-end to meet the legal reporting requirements. It adds nothing to your strategy or planning.

Using a bookkeeper regularly overcomes this hurdle. Working on a lower hourly rate than an accountant, a book keeper helps you to keep on top of the finances but also gives you access to someone with significant accounting experience. Many bookkeepers have some form of formal bookkeeping/accounting qualifications and can therefore act as a sounding board and strategic advisor, as well as managing the day to day function.

With up to date legislative experience and often performing the role for several businesses simultaneously, bookkeepers can process the daily accounting faster than someone in an untrained admin role and can manage extended functions such as VAT, Payroll and reporting. A good bookkeeper will get to know and understand your business, and therefore is well placed to act as that vital sounding board when looking to make decisions.

As a supplier to your business, a bookkeeper is a scalable resource and can be flexible to meet the needs of your business. You also don’t have the additional head count.

Here at Nicki Paddy & Co, we take the role of bookkeeping for our clients very seriously and for a number of our clients we provide a wider function covering various activities up to Financial Director level. If all you currently need is someone to handle the ins and outs and keep a watching eye, then of course we can help, but if you want someone on your side who can grow with the business and provide a wide range of advice, support and assistance, don’t hesitate in contacting us today! We’d be pleased to help!

A Bookkeeper’s Life: HR, recruitment, law…. and the odd bit of accounts!...

Having spent my career in finance based roles, the move to start my own business and provide bookkeeping services seemed like a straight forward one that would call upon my core skills.

Rightly or wrongly I perceived bookkeeping as very much being about managing accounts and finance on behalf of my clients. But nothing could have prepared me for the reality of working so closely with owner managers and what they expected me to know! It is not unheard of for me to face questions or be expected to understand law, HR, recruitment, legislation, tax, export and import rules, pensions, Insurance and a myriad of other topics.

Obviously many of these areas are extremely complex and require highly specialised professional advice and so whilst I very much enjoy being treated as an intrinsic part of my client’s business, I know my limits and that means knowing where I can and cannot advise. As an accounting specialist that has spent many years training and having to undergo CPD (continual professional development) I know I would be extremely annoyed if I found an HR specialist was advising my clients on their accounting for instance; and so I keep this in the forefront of my mind when I am asked different things by my clients.

Having realised that these were not one off queries and that the role of the bookkeeper often extends to be a linchpin within the business, I knew that I needed to surround myself with experienced and knowledgeable people that I could call on and introduce to my clients. I also wanted to be sure that the people I introduced would provide good advice and would be a valuable contact as poor advice could harm my reputation or relationship with the client.

So by working with Nicky Paddy and Co you will have access to a network of advisors, solicitors, consultants and business specialists that I have taken time to get to know and who add depth and value to what I enjoy doing….the accounts.

Reputation Counts in Bookkeeping - Yours and Mine

As a business, I market myself as a Chichester bookkeeper. I am treasurer of Chichester Chamber of Commerce and I primarily network and work in the Chichester area. Living in the city too, it means most of my working time is spent a stone’s throw from home which makes me more efficient and reduces the cost of doing business. However, maintaining such a close professional circle also comes with its issues.

I recently spoke to another local business that benefits from using a bookkeeper, but insists on using an ‘out-of-towner’ for the sole reason of confidentiality. Like me, the MD of that business lives, works, socialises and networks in Chichester and therefore his concern was rooted in having someone within his immediate professional circle who knew:

1. How his business was really doing (rather than the typical response every business owner offers to the question “How’s business?”, being: “it’s great, really strong month/quarter….)

2. How much he was earning

This threw up some interesting questions for me: How many clients feel like this? Is it such a big issue that it potentially overshadows buying competence and quality – the two key traits of my business that I promote?

As a highly qualified and accredited bookkeeper I have always assumed that people know they are buying my absolute confidentiality when they contract me in to their business. Discretion and confidentiality have always been the cornerstones of Nicki Paddy & Co.  My Terms of Engagement tell clients what they can expect of our service but, obviously, we need to have had the discussion about working together first, before people get to see those. If prospects have concerns in this regard the likelihood is that even those initial discussions do not happen.

But is it wider than that? Maybe the issue is not about implicit trust. Maybe the issue is more about walking into a room; seeking business opportunities and having at least one other person in that arena knowing the ins and outs of your business.

I certainly do not disregard his concerns as I am always interested in peoples’ reasoning and buying decisions; but it has made me think that if I want to remain efficient and keep costs low by working in and around Chichester, I may need to be a little more upfront in addressing the confidentiality issue head on…

So, with your fears about confidentiality and discretion allayed, if you feel we can help you manage your finances better, give us a call.