The Finance News from NEWHSL

Introduction
Hello and welcome to our November issue, we hope you enjoyed our last issue after a long break. We also trust you did find our newly undated website very informative and helpful. Thank you for your comments; it is we hope the newsletter will continue to be a relevant resource to you and your organisation / company.

General News

The Collation's cuts... 
Well, 20th October has been a defining moment for everybody in England, whether old or young, rich or poor, employed or unemployed. Every “soul” is set to be affected by the raft of public sector cuts in living memory, in peace time Britain.
Many will lose their jobs, homes, businesses, possessions and their sense of belonging. The knock-on effect is bound to be felt across in every fabric of our society.
The key words, to hang on to, in time like this, are: change and adaptation. We will certainly need to change our pattern of living and adapt to the forthcoming bombshell of cuts that are about to be unleashed on us.

How to manage in a recession
Recession management is no longer an issue governments only across the globe, but now a matter of key concern for organisations, companies, families and individuals alike.

To successfully manage and survive a in a recession, our team of consultants have carefully put together the following key approaches, which when warily adopted will make a difference in how your very scarce resources are applied. Please note the lists below are by no means exhaustive.

1. Resource Efficiency – this will involve trying some of the points listed below:

a) Request for early payments from your customers and funders

b) Request for extended payment periods from your suppliers

c) Streamline your budget on consumables, and only buy when its needed

d) Adopt zero-based approach to all new budget rounds and projects

e) Review all external consultancy commitments

f) Consider asking staff, where possible, for flexible and reduced hours of work

2. Good Supplier & Banker Relations – this will help improve your cash flow position which can become crucial in survival environments. This is certainly one of the times that you need to be in the good books of your bankers as you need them either for an overdraft facility or flexible low interest rate loans

3. Review of Existing Commitments – you want to revisit all existing commitments like contracts, leases, not with the view of breaking them but to explore the possibility of re-negotiation, if possible.

4. Post-pone Non- Crucial & Strategic Expenditures – training, research & development, and capital expenditures must be strategically delayed / deferred where there’s no risk / danger posed to the organisation’s continuity and performance in the short and medium term. In addition, keep the following cost items under regular review: Telecoms, Photocopiers, Stationeries and Company Cars.

5. Viament of Charity Reserves – reserves are meant for the rainy day, beginning to dip into them has always been a painful exercise for Trustees. Charities will need to turn to reserves if their funding is completely dried up. This has got to be strategically managed in order to avoid a quick and rapid depletion which could lead to closure or bankruptcy.

Added Value Tools
As part of our continued commitment to service improvement, we are introducing added value services that will bring real value to our valued clients.
Though this might mean additional costs to you, the benefits to gain are far reaching than the costs you bear. The service will include; Dividend verses Salary simulation, Tax credit analysis, and Incorporation planning.

Tax – it shouldn’t be taxing, but why...
VAT Rate Increase – the VAT rate will increase to 20% from 4th January 2011, and you need to be aware of how this rate change will affect you and your business.
Please note that whilst 1st – 3rd January 2011 are a week end and bank holiday, sales made during this period will need to be charged at the old rate – 17.5%.
Businesses and Charities who are not VAT registered will need to review their budgets to incorporate the extra 2.5% increment.

Do not leave anything to chance, as the VAT penalty regime is the latest to have been reviewed and revamped by HMRC.
On the other hand, those of you who are VAT registered will need to amend the rate change on your systems by 12:00am – 5th January 2011.

New Minimum Wage Rates – the new national minimum wage effective from 1st October 2010.There are currently three different national minimum wage rates and an apprentice rate (introduced for the first time).
The rates that apply from 1 October 2010 are as follows:

• for workers aged 21 years or more: £5.93 per hour

• for workers aged 18 to 20 inclusive: £4.92 per hour

• for workers aged under 18 (but above compulsory school age): £3.64 per hour

• for apprentices aged under 19: £2.50 per hour

• for apprentices aged 19 and over, but in the first year of their apprenticeship: £2.50 per hour

Apprentices aged 19 or over who have completed at least one year of their apprenticeship are entitled to receive the full national minimum wage rate applicable to their age.

Please visit: http://www.direct.gov.uk/en/NI1/Newsroom/DG_178175 for further details.

Trusteenet
The Charity Trustee Network has been in existence since 1998 and provides a one-stop-shop for trustees, including news, forums and events. It also includes a “trustee finder” service, where you can advertise for trustees, or offer your (trustee) services.
The Network has special forum for Chairs of charities and a listing of regional or local trustee networks and events, its activities are mainly based in England.

Our Managed Payroll Services – just got better
The introduction of SAGE PAYROLL is another demonstration of our continued commitment to offer quality services to our valued clients. This enables us to meet all your needs and at the same time fulfil HMRC requirements.
Our payroll services are prompt, accurate and reports are e-mailed followed by pre-printed pay slips.
For as little as £9.50 plus VAT, we can provide you with prompt and accurate services, to top it all; our Year End submissions are free of charge.

Please visit our website (www.newhsl.co.uk ) or call us on 07838 166 503 for a quick chat and we will send you a quote within 24 hours of your contact.

Training News
QuickBooks is one of the most user-friendly and affordable financial software available on the market, it’s very popular among smaller businesses and charities.

This is the reason why we are re-launching our support and training programme for QuickBooks at levels that fit your budget:

» Assured Support – this is a low cost plan that enables you to access support via the telephone and e-mail – e-mails are responded to within 24 hours of your enquiry – price £350.00 per annum plus VAT payable on a quarterly basis via standing order.

» Ideal Support – this, in addition to assured support, you can e-mail us your back-up (Accountant’s copy*) files where we are unable to resolve the problem on the phone or through an e-mail. The back-up file will be restored into our enterprise system, difficulties / errors / problems are resolved and file sent back to client – price £550.00 per annum plus VAT payable on a quarterly basis via standing order. * *The accountant’s copy enables our clients to continue using QuickBooks whilst we work on their files.

» Premier Support – this offers the same benefits as assured and ideal support, in addition, we will visit you on a quarterly basis (4 visits per year) to ensure your entries are made accurately, review relevant ledgers and corrective measures taken where there are discrepancies in the system. This includes help with processing your annual Budget and maintenance of your Chart of Accounts – price £1,000.00 per annum plus VAT payable on a quarterly basis via standing order.

Technical Matters
This section covers technical matters that affect our valued clients; it will be presented in series of sub-topics under the individual headings.
Please look out for the series our next issue.

Budgets – does it still work, is there an alternative
1 Forecast Monthly Sales (1 of 5)
Estimate sales forecast for each month (some months face fluctuating demand / sales). Ask how many customers you will keep and how much new business you are likely to gain in the next year. Will you lose business to your competitors?
Forecasting will be easier if you can use last year’s figures as a guide. If you are a new firm, your market research will help you to forecast sales. As each actual month of trading goes by, you will be able to make more realistic predictions.    
Getting the maths right - ensure your unit selling price, and the quantities period are correct. Use excel spreadsheets and where possible avoid using word to prepare your estimates.

Cash Flow Management Improvement – every little counts
1 Improve Your Credit Control (1 of 5)
Carry checks on all customers who ask for credit. Ask for credit references from their bank or their other suppliers. Alternatively, there are numerous credit-checking service providers. Ask your bank to see whether they provide such a type of service – Barclays Bank is one such example.
Limit the terms to all credit terms you grant and never exceed them, that could get you into trouble with your customers – leading to possible bad debts. Only give favourable terms to your most trusted and valued customers. Set an upper limit and stick to it (i.e. maximum risk you can afford). Be prepared to say no if a customer asks for more above the risk level.
Make sure all your customers understand your sales terms and conditions. If you haven’t got any, get some drawn up (we can help). Include your statutory right to charge interest on late payments.
Just be careful with charging interest on late payments as this can put of some customers and could lead to lost of future sales.