In a blog at the start of the year, we wrote about the various options to defer Tax owed from last year. If you did decide to defer your VAT payments, due between 20 March 2020 and 30 June 2020 and still have payments to make, you now have three options. You can:

• pay the deferred VAT in full, on or before 31 March 2021
• join the VAT deferral new payment scheme – the online service is open and has been extended to 21 June 2021
• contact HMRC on Telephone: 0800 024 1222 by 30 June 2021 if you need extra help to pay

Over half a million businesses are thought to have deferred VAT payments last year, mainly due to the Covid Pandemic, but these businesses can now join the online VAT deferral payment scheme which has opened last month.

Under the VAT Payment Deferral Scheme, businesses have the option to pay their deferred VAT in equal, consecutive monthly instalments from March 2021 April, May or June 2021 without incurring interest. 

Payment Instalment options available

The date you join the scheme will determine the maximum number of payment instalments that are available to you.

The following table sets out the monthly joining deadlines (to allow for Direct Debit processing) and the corresponding number of maximum instalments (including the first payment):

Businesses need to opt-in to the VAT Deferral New Payment Scheme themselves; their agents can’t do it for them, while it is open between 23rd February 2021 and 21st June 2021. For those that opt-in to the VAT Deferral New Payment Scheme, this means that your VAT liabilities due between 20 March and 30 June 2020, will now need to be paid by 31 March 2022.

If you don’t pay your VAT, don’t opt in to the new scheme and don’t contact HMRC to discuss your situation, you may be charged interest or a penalty on the outstanding funds.

If you are still concerned about not being able to pay HMRC, speak to your accountant or ring this number and speak to the HMRC Coronavirus Helpline: 0800 024 1222 before 30 June 2021.

As the UK begins its journey on the roadmap the Prime Minister has set to come out of lockdown, it’s important that as a business- and a sector- we learn our lessons from 2020 and adapt accordingly. For the last 12 months we have tried to ensure that business owners know their options, understand the support that is on offer and that we are available for them.

The news and timing of joining 90 other local organisations in support of the club is slightly bitter sweet as during week two of the new sponsorship, the league that the Hoops play in; the Vanarama National League South was cancelled with immediate effect.

Clubs in the league had been asked to vote on their preferred outcome of the campaign after a £10m government grant expired last month. And 24 of the 43 sides in both the National Leagues North and South opted for the season to be declared null and void.

We know this is a massive blow for City, who were fourth in the table, unbeaten since December and wanted to play on.

But we remain optimistic. In the past 12 months, in particular, we have spent a lot of our time working with clients and business that have had to pause, close and then reopen after a period of furlough or due to lockdown. And that, along with the other 90 commercial partners I am sure, is what we intend to do for Oxford City.

The Business Club we are members of as part of our new deal gives business owners the perfect platform to share ideas and network with local organisations associated with the football club. Ultimately, being involved in the Business Club helps us help the club make a real difference to the local community.

We were buoyed by these words from Mick Livesey, Commercial Director, Oxford City FC.

“I am delighted to welcome Cypher as one of our latest commercial partners. I am so proud that our commercial partners are the best in the business, they have our back, and they support us. Alongside them, Oxford City is ready and willing to carry on being a vehicle for positivity in the community and a beacon of positivity for everyone in Oxfordshire. Anything in the future is possible.”

Our first episode was titled, Getting Started; obviously it was our first crack at a podcast, but getting started also reflected our thoughts that for entrepreneurs and new business owners 2021 is the year to get started!

At Cypher we see lots of people who have perhaps become disgruntled with their lot, sick of working for ‘the man’ and have decided to try it for themselves. We have also seen, throughout our towns, that traditional big high-street chains are struggling, so maybe, this year we will see a new generation of independent shops, cafes, and businesses reclaim our high streets.

Talking to Alan, he feels that there could be a great reset coming; a clearing of the way for new, independent businesses that bring high levels of service and diversity to their towns and cities. Entrepreneurship brings something different to the market; it’s inspiring.

Welcome to 2021, welcome to the New Entrepren-year!

But getting started is hard. We speak to a number of start-ups and typically, as employees who have worked in a business maybe in a key role, outside of their function the accounting, the marketing, the recruitment- in fact all of the back office functions have been done for them. Now as an entrepreneur, one of the hardest things to adjust to is that they are now responsible for everything. Usually this includes things they have never encountered before, for example, dealing with accountants, dealing with suppliers, dealing with marketing or keeping their business Facebook or personal LinkedIn profile up to date.

It can be great fun dealing with some of the more creative aspects of setting up a new business, choosing fonts for letterheads or getting your logo right and building a website for example, but there is also a lot fear for the future when we get started. It means we can terrify ourselves from day one.

One of Alan’s top tips for business owners to help them overcome this initial surge of terror is to really connect with the change they want to bring to the world; connect with their purpose. It allows them to put their time and energy into that rather than worrying whether anyone will like a LinkedIn update! Get real clarity on the product and service you offer and why you are doing it – the scary future is largely made up anyway!

Our second tip is to not be afraid to ask what you think is a beginner’s question. Everyone that has started a business has, at one time or another, been where you are. Everyone has to speak to an accountant for the first time. Everyone thinks they are asking silly question like should I be a sole trader or limited company, when should I register for VAT, how should I pay my Corporation Tax. Well two things to note here. One, no, they aren’t silly questions and two, everyone asks them!

Another, helpful context, at any stage in your business cycle, is to think more about the experience you create. Reconnect with the big, game changing idea you had in the first place and create the best service and experience for your clients. Don’t worry about the competition. It will help bring your anxiety levels down and it can be extremely liberating too.

This idea of creating a great experience doesn’t have to just apply to customers either, it can be a way you deal with suppliers, your network and as you grow the people that work with you in your business. You can create a wonderful end to end experience for your team and you can do this right at the start. Too many people focus on the customer journey but if the staff hate working with you, it will fall over pretty quickly.

It is also much better to build the systems for the business you want in 12 months from the start, while you are nimble. Otherwise, you will get really successful and have to change all of your systems and processes when you are really busy, which is painful. Or, another way to look at it is if you think small, you will stay small. If you don’t have the ambition to get to the next level your business will always just be a job for you. When you are looking for promotion, you dress for the job you want, so implement the systems you want for a bigger business.

There is a trap for every business owner is that they don’t create a business for themselves, they create a Job. Once the product or service is out there, then the next step is to take someone on. It isn’t a business until it is earning money when you’re not there. It is the big hurdle for many small business owners.

Alan calls this intent. If you start with the intention that you will implement the systems and structure, the culture and the service levels that helps you run a business and delight clients, you won’t have to worry that they will be able to evolve as you grow. You have all heard the adage ‘reach for the stars, you might hit the moon’, well this way of thinking allows a business owner to access a mind-set that stretches you, it makes you better and as you get better, more people talk about you and you do go to new levels without limiting yourself.

As a business owner, being the best version of yourself you can be, will get you to the stars, or at least the moon.

Another metaphor I have heard was likening a successful business to the Chard in London. It is a skyscraper visible from all over the capital. Look at it now and it looks very impressive. But when we see only the finished structure we forgets the fact – like a successful business – that it took 10 years to build and in that time there were mistakes and hardships and struggles. Another similarity is that it was built amongst other skyscrapers that already dominated the skyline. They were there to be seen, like other businesses already in your marketplace.

The start of this blog focused on a throwback to when high streets were dominated by small, independent, diverse businesses. Well in another trip down memory lane, we think the famous Lord Kitchener World War 2 image is apt. Right now your business community needs you! We know it can be tough to get started but the business landscape is ready for diversity.

In summary, to avoid the fear of failure, before you even start, get real clarity in your purpose, be absolutely clear on the offer you are bringing to the world and then get better at it. Get a mentor, get a coach, buy books, read and learn, because a fundamental truth is that the better your product and service the more people will buy it. Then build the systems and infrastructure for the business you want, not the one you have on day 1. Be agile, your business plan will change, it will evolve and that is good.

Ultimately remember that version 1 is better than version none!

Despite this, we have a lot of conversations with business owners who want absolute certainty about an idea or a proposal before they can progress it. Often when building a financial forecast, they are projecting a financial future for themselves, their families and want us to tell them that 100% what we project will happen. They want absolute certainty that if they take on three more hires, or open another office or venue that their business will make another £500,000. Sadly no-one can guarantee that level of certainty and so we encourage clients to focus on clarity.

Clarity is something we can control. We can be very clear on the product or service we’re going to deliver, we can get very clear on when we are going to do this and we can clear on why we are doing it, our purpose. With this clarity, we can maximize the possibility of a set of results. It’s still not a certainty but we are maybe moving into the realms of probability.

Craving clarity not, certainty was a wonderful topic to discuss with Alan Clark on the Mind your Business Podcast. Typically this conversation comes up a lot when we are business planning with clients. In every forecast, there is an element of the known and an element of the unknown. For the majority of businesses the large area of uncertainty is around sales. To counter this, we have precedents that help us predict what will happen; we look at past performance, we look at industry benchmarks for a particular product, we make sure that we have absolute clarity on costs such as overheads and wages and we know what a business owner wants to take out of the business. If we are clear on all of this then use probability and a bit of common sense and try to set realistic goals.

Global pandemics aside, if your sales haven’t fallen off a cliff in the last 12 months, then the likelihood is they won’t this year.

Clarity starts when you write down your plans. This scares a lot of business owners because as soon as you write down that you want to be a half-a -million-pound business or you want to take out a £30,000 dividend, you feel you have to achieve it and if you don’t then you will have failed. But if you don’t write it down you’ve never failed that’s just the human psyche at work.

In his coaching business, Alan has frameworks that he uses to describe this level of clarity for clients. One of his particular favourites is called V.U.C.A. V.U.C.A was originally coined by the American military to allow them to view the world in a certain way. It stands for Volatile, Uncertain, Complex and Ambiguous.

In the UK over the last 12 months against a backdrop of Brexit or the Covid pandemic, your markets might be volatile, uncertain, complex and ambiguous, but there is an antidote to this called V.U.C.A Prime. V.U.C.A Prime stands for Vision, Understanding, Clarity and Agility. We talked a lot about Getting Started on the Podcast and in a previous blog. We discussed how business owners could shoot for the stars to get to the Moon, but to get there they needed to be agile, flexible and allow a business to evolve over time.

Clarity brings control. Before any performance comes action. Clarity defines that action it allows you to act in a focused way. You’ve done your thinking, you know what you’re doing, why you’re doing it, how to make the product or service better, how to astonish customers, how to act, how to work with your team. All of this comes from clarity and that 100% has an impact on your performance.

During the pandemic, we have seen business owners that had clarity and who created action, while others were crippled by inaction. They were swamped with information, burdened by negativity, they didn’t know which way to turn and so we spent a lot of time trying to provide that clarity, looking forward to how businesses could get itself back out there, open up again and be a strong as possible.

Many of those that acted brought subtle changes to their business. They pivoted. They looked at their business and understood its purpose and what their customers wanted and needed from them. Some, for example decided that they didn’t need bricks-and-mortar but could still deliver their purpose. They retained the clarity on what they were trying to achieve. These businesses might find they will need to pivot a number of times over the next 4 or 5 years but that is ok.

As well as useful frameworks, Alan likes a quote too. He cites Werner Erhard, an American author and lecturer who says ‘what is undistinguished runs you’. It means that without clarity you are run by emotion. Emotion makes you unclear, runs you ragged and prevents you from creating your optimal levels of service for your customers.

If you are reading this and are unsure where to start, there are two elements that it is essential you have clarity on. The first is your financials; your costs, your margins, your overheads, your conversion rate. The second is your purpose. Take a piece of paper and write down all the ways that you can delight your clients, your customers and your team. Obviously, there is a lot more to running a business but even this small activity frees you to undertake an action and ultimately delight your customers, which ultimately has to be very positive for your business.

In summary, seek clarity not certainty. V.U.C.A is a lens through which you can interpret the world. It comes in two forms; volatility uncertainty complexity and ambiguous which is a way to describe the world or the business environment you find yourself in. The Antidote is V.U.C.A Prime, which stands for Vision, Understanding, Clarity and Agility. It’s about understanding what you want to bring to the world, the industry you are in, what your clients are looking for, the change that the world is craving and then adding clarity about what you are going to do about it.

Businesses can choose which payroll system to use and it will help record employees’ details, work out employees’ pay and deductions, report payroll information to HMRC and calculate statutory pay, for example, maternity or sick pay.

Payroll is a complex, time-consuming part of your business and payroll errors, such as late or incorrect pay slips, are a sensitive topic that can cause a lot of tension between employees and their employer. It’s a service that Cypher offers clients and Clare Haynes, who heads up our Payroll Team has noticed, more and more, that one element of the payroll requirement is managed less well.

When we manage the Payroll for a member of staff who is leaving the business, often, when we come to calculate their annual leave allowance, we find it isn’t managed well or accurate.

Often, in a small business, with a limited HR function, this information will be kept on a spreadsheet as a manual process, which leads to inaccuracies. This means that when we are processing a leaver for example, it is difficult to identify what leave they have accrued, what they have taken and what they are owed.

To avoid this, with our clients, we use a piece of software called BrightHR. It is smart software that can help manage this potential minefield.

All employees and workers can have time off with pay, but the amount varies between full and part-time staff. Workers are entitled to a minimum of 5.6 weeks is 5 x 5.6 = 28 days. The 28 days includes the UK’s eight bank holidays.

For part-time staff, holidays should be calculated pro-rata and be representative of their typical working week, so if they work three days a week the calculation is 3 x 5.6 = 16.8 days of annual leave.

And it affects agency workers individuals with irregular hours, or those on zero-hour contracts. Plus your employment contracts might include additional terms covering annual leave, such as:

• Additional days off for all staff
• Additional days off linked to the individual employee’s role or length of service
• Payment in lieu for annual leave not taken
• Rules for taking and accruing contractual annual leave while off sick or on maternity leave. (Remember, employees always accrue statutory annual leave in these circumstances).

We think it is good business practice to work out as soon as possible what an employee is entitled to, so your workers know what they have available to them when they start their role.

Right now, holiday entitlement may seem a trivial concern, but by law you must get it right. BrightHR automatically calculates employee holiday entitlement, even the awkward calculations like when a new member of staff joins during the holiday year. All staff entitlements auto-refresh when your new holiday year begins and it handles booking mandatory leave easily. Your employees can request a holiday and you can sign it off in seconds—even if you are all working remotely.

With so many work patterns affected by the COVID pandemic, another useful tool from BrightHR, we find is the shift scheduling software which is great for shift and rota planning. It avoids piles of paper rotas littering the office, which are pretty useless if colleagues aren’t even in the building. Everything you need is in one place in the people management hub.

Finally, for clients with multiple locations BrightHR also has a function that helps to easily track your employees’ work hours and locations. We know that whether your team is working from home or they’re back in the office, it’s difficult to stay on top of all of their hours. To make it easier, the software can create a clever ‘geofence’, which is a sort of virtual boundary around your chosen workplace. Then, when your employees enter or leave the ‘geofence’, it picks up their location and asks them to clock in or out—helping you to see exactly when your staff have worked and how long for. It means that employees clock in properly and keep track of their hours, so you pay for their allocated time and they get credit for the hours worked, wherever and whenever that is.

January is a very busy month for accountants, but it could get busier in the next few weeks. As the deadline looms for self-assessment tax returns at the end of January, HMRC reported earlier this month that nearly half of those due to file a return hadn’t done so.

As of January 4^th, HMRC had received 6.6m of the total 12.1m expected self-assessment tax returns due to be filed before the January 31^st deadline.

Due to the various lockdowns we have experienced since March, many people are still struggling to gather the data that they need – often from third parties to file these returns. However, as things presently stand, if you are not able to finalise your tax returns by the end of this month, you would be subject to automatic late filing penalties – even if there is no tax due.

VAT

In addition to the self-assessment payments, Government figures suggest that some £30bn of VAT payments were also deferred this year.

Up to half a million businesses are thought to have taken advantage of the COVID-19 VAT payment deferral scheme, which allowed them to defer VAT payments falling due between 20 March 2020 and 30 June 2020 until 31 March 2021. HMRC has recently issued guidance on the process of extending the deferral by a year to the end of March 2022.

Businesses choosing this route will need to opt-in to the scheme, and for those who do, this means that your VAT liabilities due between 20 March and 30 June 2020 can be split into smaller, interest free payments over the course of 11 months until March 31st 2022. Of course, those that can pay their deferred VAT can still do so by 31 March 2021.

The scheme will allow organisations to pay their deferred VAT in instalments without incurring interest charges and select the number of instalments from 2 to 11 equal monthly payments. To use it organisations must still have deferred VAT to pay, be up to date with VAT return declarations and be able to pay the deferred VAT by Direct Debit.

Time to Pay Arrangements

As well as deferring VAT payments, HMRC has allowed business owners to defer their Corporation Tax bills. For many, largely due to COVID, this was a chunk of money they don’t have. Paying out a large sum, in one go, could jeopardise cash flow so many have sought to put this off. If you are still unable to pay the VAT or Corporation Tax due and need more time, you can apply to HMRC for a Time to Pay Arrangement.

HMRC Time to Pay Arrangements (TTP) are structured payment plans for debt repayment over an agreed time period. Be aware that HMRC does not give these out lightly, but equally they do recognise that in certain circumstances businesses need help. In light of the impact that the Coronavirus (COVID-19) pandemic has had on so many businesses, across all industries, they may well be more permissive than ever as the Government recognises that it must does everything it can to help businesses through these challenging times.

HMRC has even set up a helpline for business owners, ready to offer advice and support. Usually, these TTP agreements come with a 3.5% penalty charge but, according to Chancellor Rishi Sunak’s autumn budget statement, this will be waived for the duration of the virus.

If you concerned about not being able to pay HMRC, speak to your accountant or make this number a first port of call.

HMRC Coronavirus Helpline: 0800 015 9559, Monday to Friday, 8am to 8pm, Saturday, 8am to 4pm

As the UK experiences another nationwide lockdown, it’s important that as a business- and a sector- we learn our lessons from 2020 and adapt accordingly. Since March we have tried to ensure that business owners know their options, understand the support that is on offer and that we are available for them. The whole point of offering a ‘you can get hold of us anytime service’ is that clients can actually get hold of us.

And one topic that’s constantly on entrepreneurs’ minds is funding. It is something we are asked about a lot.

Developing a great business takes commitment, diligence, patience and in most cases, a good deal of money. Navigating the tricky waters of patenting your IP, and establishing your market can be expensive and finding and securing the financial resources that will allow you to focus on business growth is critical.

That is why we are delighted to work with Quick Start Consulting. We met as part of the Kickstarter programme and were referred to Hannah and her team.

Along with the other 84,757, Quick Start (QS) Consulting was also founded at the start of 2020 and is on a mission to help start-ups and early-growth stage businesses raise capital without having to give up their equity, or move too quickly for VC or Angel investment. They have significant experience of navigating the grant funding ecosystem and can effectively fill the skills gap so often found in start-ups of how to find and convert equity-free fundraising to accelerate early-stage R&D.

They specialise in helping SME businesses in the innovation, technology, sustainability, health and engineering sectors grow. They are good too, with a recent 96% success rate in Q4 of 2020. Their average grant funds come in at around £300,000 for a 12 month funding period. So whether it is a funding stream, a consortium of backers or growth partners your business needs, they can deliver a solution.

With more than 250 grants available, which change almost every week, ranging from £100,000 to £2.5m part of what QS offers is a level of upfront labour-intensive wrap around support upfront to get your project funded. They specialise in open brief funds which are for any innovation in any sector and give tailored advice on closed-brief, industry-specific grants, meaning they target their approach to find the funds designed specifically for your industry. They can spot the low hanging fruit and this level of due diligence means they can advise business owners accurately of their suitability for grants.

They work with clients across the UK, Europe and the US, matching clients with government funding, trusts and foundations, European funding, NIHR, accelerators and ITTs. If you have a new App, a design for new type of electric vehicle or medical device, then Quick Start Consulting are particularly interested in technology that disrupts industry, creates a new paradigm for thinking, prioritises sustainability or accelerates environmental innovation.

Does this sound like your business idea for 2021?

Of course, having a letter of intent from a retailer or manufacturer to validate your business idea is a wonderful position to be in. At Cypher, we work with a number of innovative businesses in the Oxfordshire area, but if you have a patent or an innovation that is protectable, or a product that is technically disruptive or unique, or you have great experience within the sector you are trying to penetrate, then Quick Start Consulting could be a great introduction for you.

A viable Covid vaccine has been developed and is available this month and this news alone will give people hope and confidence to return to whatever their new version of normal is. Personally, and professionally people will be ready to bounce back and we want to offer them a platform to accelerate this process.

At Cypher, we are delighted to announce the launch of the new OX100 Business Accelerator Programme.

One thing this year has surely shown us is that it’s almost impossible for business owners to create monumental success by themselves. Too often we make the mistake of thinking we can do everything on our own, without consulting those who have maybe been there, done that, got the t-shirt. It can truly be a recipe for disaster.

Still, many business owners believe that they can’t afford to invest in coaching, mentorship or sound financial advice. That it would be a waste of time or that no one is going to understand their vision as well as they do. But surely, the success of any empire is contingent upon the willingness to learn from the mistakes and achievements of those that went before. It’s simply a fact that if you want to build your own castle, first you see how others have made theirs stand the test of time.

Starting in January 2021, for £100 a month, the new OX100 Accelerator Programme will offer 100 local businesses just this kind of support. With regular business coaching, financial advice, and access to sales, marketing and legal experts, supported by quarterly masterclasses in key business growth areas it is designed help local business owners implement the right tools, techniques and mindset to drive high revenue growth through their existing business.

The programme lasts for 12 months meaning business owners can really focus on getting results using a set of highly effective tools to identify gaps in their business, evaluate risks and create a business model that stands-up to the scrutiny of potential investors, partners and customers.

Working directly with high-growth potential businesses and helping them to thrive will in turn support the local region to thrive as it drives new business, creates new jobs and in turn provides a real boost to the local economy.

At this stage, we have to be clear that while no financial investment will be offered to any businesses taking part in this programme, this, we hope is far outweighed by the measureable, tangible benefits of being part of a business acceleration programme that is designed to help business owners grow their business and in turn grow their wealth.

The Programme – in a nutshell

The curated curriculum guides business owners through some of the key elements of a business growth strategy, helping them develop sustainable practices, robust plans while also helping them to navigate through common challenges to avoid pitfalls. The programme consists of a number of interdependent elements, pieced together to accelerate business growth and development and includes:

• Interactive virtual sessions on topics essential for business improvements and growth lead by industry experts
• A structured environment and curriculum designed to help a business owner keep focus and grow in the right direction.
• Intensive masterclasses with subject matter and industry experts
• Collaborative and supportive community of like-minded business owners
• Access to coaching, financial expertise and peer to peer networking that can help accelerate your business
• inspiring talks, targeted training and workshops to ultimately help you evolve, change and grow

Who’s it for

This programme is designed to help business owners in any sector with a proven sales record, who want to expand beyond their current revenue streams. The OX100 programme is a largely ‘virtual’ business accelerator, which, other than for tailored, quarterly masterclasses does not require a physical space. Instead we will focuses solely on providing services, such as coaching, financial advice and access to sales, marketing and legal expertise remotely.

We are creating the type of community that most business owners crave. It can be a lonely endeavour to build and grow a business, so we hope that the ability to connect with others who are in the same place and learn from experts will not only improve emotional and business health but can build a collective strength that increases the chances of regional success.

As anyone who has started a company can attest, your cash position can be extremely tight as a start-up. Whether you have significant financial backing, are crowd-funding or using a redundancy package, you must make sure that your understanding of the company’s finances is second to none. If you don’t have a keen eye on expenditure and credit control and haven’t accounted for unexpected costs, you can surely expect your company to run out of money very fast.

Here are top five tips to ensuring your business maintains a healthy cash position:

1. Bill on time- every time: This sounds so simple, but can catch so many new business owners out. If, after completing an agreed service or piece of work, you don’t send your invoice for a few weeks and then your client delays payment by a few days, the compound delay can be very damaging to your cash flow position, especially if you have fixed costs, and fixed payment dates of your own to hit. This lackadaisical approach to manual billing can also make keeping track of what is due in and going out harder.
2. Automate your invoice system: Digital Accounting Software like Xero allows you to automate your invoice system. By using the Go Cardless plug in, your clients can sign up to a Direct Debit, which guarantees that they will pay on the same day each month. For transparency, at Cypher, we operate a monthly retainer model; all of our clients pay us a flat monthly fee and this gives them full access to the team, whenever they want. If you use Xero and connect your system up to Stripe, for example, then you can take payments from a card, via your phone instantly. This is something that a lot of our trade clients have found invaluable.
3. Agree suitable payment terms: Agreeing enforcing your payment terms, in line with your other business costs will ensure you receive prompt payment and can cover your regular outgoings. Late payers can cause a great deal of distress to businesses of all sizes, but it is SMEs that can be hardest hit. Late payment adds a layer of uncertainty and can cause the kind of cash flow crisis that we could all do without. The first step is to determine the level of risk on payments you can take as a business. If the answer is ‘none at all’ then payment in advance is the solution. This can restrict your market somewhat, especially in the B2B world where companies often expect to pay on account, but many service-based businesses do bill for time ‘bought’ in advance.
   For some, billing in stages works best. But if you adopt this approach, i.e. 25% deposit or 50% in advance and 50% in completion, then you should ensure that your initial payments covers the costs of any outlay on materials or the cost of actually producing the project. Also, try not to leave too high an amount due for payment at the end of a job, it can be tricky to collect, possibly because clients see that as your profit element and were more blasé about paying. Try instead to recoup as much or your own expenditure as possible, in advance as this will improve your cash collection and cash flow immensely.
4. Chase Bills before the payment date: If you don’t have a regular direct debit system in place and have agreed a suitable payment term, let’s say 30 days, then sending a client a reminder after say 25 days, suggesting payment is due the following week, while simultaneously thanking them for the work is a great way to ensure they pay on time.
5. Use a cash flow forecast to plan effectively: A cash flow forecast is critical to give you the visibility of what’s coming so that you can plan. We always offer clients a detailed cash flow forecast and maintain it throughout the year. In general, it is really important to get someone who understands figures to keep an eye on cash and profit But if you are fundamentally scared of your bookkeeping practices then you should seriously consider outsourcing it immediately and let someone take care of it for you.

In a crisis, cash is king! Remember, no matter what your turnover is, if your cash flow is negative, then your business doesn’t stand a chance.

It was a virtual event and I enjoyed a ‘fireside chat’ with a representative of Fathom, who provide our state-of-the-art business performance and planning software. Out topic was called ‘Advisory Rebooted’ and was designed for us to discuss, moving forward, the way accountants should package and offer this value-add service to their clients.

There are many advisory services; including cash flow forecasting, revenue projections for future planning, and budgets vs. actual reviews. These services are usually bundled up and sold as an additional service, typically on a quarterly basis. But rather than get into specific details of what is or isn’t offered in this service, instead we discussed a new approach to how these services are offered and how clients can benefit from this change of focus.

For transparency, at Cypher, we operate a monthly retainer model; all of our clients pay us a flat monthly fee and this gives them full access to the team, whenever they want. Some months clients will speak to us a lot – and get a lot for their money- but some months they are happy and just check in for ten minutes at a time and the investment from our side evens out. We have shifted our focus away from ensuring someone had done an hour of billable time and that have made money from it, because, trust me, that’s not what our clients want.

In general, we have seen a shift away from the need for a big advisory product. Now our quarterly client meetings aren’t driven by the quarterly reporting pack, but rather our advisory services are built in, throughout the quarter and clients are drip fed their information in a timely manner. It still acts as a driver for other services; let’s say, for example, that a client is about to buy another restaurant or take the lease on another office space, this still requires a cash flow forecast and a business plan and some KPIs, so we focus on building that pack and then delivering it.

The value for our clients is that they can speak to us for 30 minutes a day, every day, in the weeks leading up to the purchase, which makes them feel comfortable. And this isn’t about the nuts and bolts of the purchase, this is for things like ‘have you got the till set up?’, ‘how are you recruiting?’, ‘will you take out a loan from the brewery, or a corporate finance company or are there better products on the market?’

It’s a softer form of advisory, but it suits us and our clients because we wrap it up in one fee. If we were charging for it by the hour, then it would be much less attractive and much harder to sell. You don’t want to ambush your client with a different bill every month for the ad-hoc 45 minutes here and there.

As we all know, potentially the UK is on the brink of another nationwide lockdown or firebreak. It’s important that as a business- and a sector- we learn our lessons from lockdown part 1 and adapt accordingly. As a team we decided that when we came out of the first lockdown if we had the same level of clients, paying us the same level of monthly fees, with no-one dropping out, that would be a considerable win. So we made sure that during those initial weeks we gave all of our clients what we called ‘Lifeboat calls’ and just made sure that each business owner knew their options, understood the support that was on offer and that we were available for them.

In fact, we experienced a 60% growth in client business and took on more business in that time than we had during the previous half of the year. The reason cited by almost every new business was the same; we were visible and were there for our clients, whereas their current accountants were not. They just didn’t get any contact from them at a time when perhaps they needed it most.

After that initial period we realised that we were getting quite a lot of emails requesting a ten minute call with member of the team. So as a result of these early efforts, now two hours a day is blocked out in our diaries. If a client calls in the morning, we know can fit them in by the afternoon of the next day. The whole point of offering a ‘you can get hold of us anytime service’ is that clients can actually get hold of us. It falls down if we don’t have any time to actually get back to them.   Business owners, if they have a problem with something, are used to calling someone and getting it resolved very quickly, accountancy needs to be like that.

To facilitate this instant feedback, we have also changed some of our channels of communication. We have a number of clients on our Slack system and many choose to WhatsApp us on a regular basis – even with gifs. We created the WhatsApp group initially so that during early lockdown, when so much new and complex information was being circulated, we could create videos that acted like a daily briefing and explained the impact for small businesses. We wanted to get ourselves out there, get in front of as many businesses as we could and offer up to date, accurate advice. WhatsApp seemed the most suitable way of doing this.

Typically, the WhatsApp chat it is more informal; it is for one line questions that require a single word or one-line answer, it’s not for a big tax advisory report. The feedback we get from clients is that if your clients can’t get hold of you then they will go elsewhere. A lot of bad will has been generated in lockdown when business owners couldn’t get hold of their accountants or support services when they needed them most. You have to be able to put your arm around your clients, or someone else will.

There are certain clients of course, that still take a scheduled, quarterly meeting with us, but there needs to be an absolute reason to use this model. If the calls are about something small that we can advise on immediately then we wouldn’t look to schedule further meetings unnecessarily. For clients that are growing or pivoting into something else, then the quarterly meeting is still core to their support, but every client gets a base line level of advisory service that they can understand and that they can buy into.

Digital Accounting Software like Xero allows for real time feedback and assessment on a business’s figures, performance and cash flow. We are simply changing our business model to offer an advisory service and level of human interaction to match. Now we are where our clients are, whether this is on Slack, WhatsApp or Facebook Messenger. The chat is less formal and it allows for an instant response, even if we can’t solve the problem there and then. Rather than set up an email and start to type a ‘Dear client’ note, it moves quickly and questions can be answered quicker, which reflects the relationship we have with clients. We see ourselves as more a friend in the phonebook than a big expensive corporate accountant.