8 Great Go To Resources For Billing & Invoicing

According to the Close Brothers Business Barometer, late payments are an issue that affects 67% of small-to-medium sized businesses in Ireland, with over half of SMEs being forced to let employees goes as a direct result of late payments. Cash flow management is critical to the success of any business, but while larger corporations may be able to juggle a bit more, late payments can be absolutely crippling for smaller businesses or self-employed people. With that in mind, here are 8 great resources for managing your billing and invoicing.


1: Freshbooks

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With over 5 million users worldwide, Freshbooks is the biggest accounting solutions software on the market. First founded back in 2003, Freshbooks was an early entrant to the online accounting market, meaning it has been developing and perfecting its software longer than any of its competitors.

But the main reason for Freshbooks’ mass appeal is most likely due to its interface, and the ease with which it can be used. Freshbooks presents complex financial tasks in a minimalistic, step-by-step manner, so that even people with no experience in billing or invoicing can do the job.

Freshbooks accepts many forms of online payment, such as PayPal, Apple Pay, Google Checkout, Stripe, and major credit cards, consolidating them all in one place. However, there are limits to how many customers can be invoiced per month, which depends on the pricing plan you choose, so this may not be the best option for businesses with high levels of first-time customers.

2: QuickBooks

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QuickBooks was developed by the financial software firm Intuit, which has been working in this field since 1983, around the time computers really started to go mainstream. Despite the head start it had over FreshBooks, the launch of their first product did not go well, allowing Freshbooks to move in and take a larger share of the market.

Since then, QuickBooks has ironed out these issues, and now has over 2 million users, making it one of the leading solutions on the market. The most notable distinction between QuickBooks and FreshBooks is volume, with Freshbooks limiting the number of invoices that can be sent by pricing plan, while QuickBooks allows any number on any plan, despite being the cheaper option. If you deal with a small number of regular customers, FreshBooks may be the best choice, while QuickBooks is better suited to tracking a high number of accounts.

3: Xero

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While both FreshBooks and QuickBooks focus more on the most fundamental aspects of accounting, Xero is a product that aims to take people to the next level of detail. In addition to calculating, tracking, and accepting payments, Xero enables users to quickly create all sorts of financial status reports, such as debt to equity ratios, current liabilities to net worth, owner’s equity statements, and much more.

Xero has recently increased its pricing, making it one of the slightly more expensive options. It is probably not suited for very small businesses, freelancers, or self-employed people, and it will take a bit of getting used to before you can use it to its full potential, but if you are looking to get more data on your business without getting a new degree, Xero can help bridge the gap between amateur and professional accounting.

4: Zoho

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Zoho was developed specifically to meet the needs of new and growing businesses, with its main focus being on flexibility and ease of use. Even their most basic package contains some of the most important features for a fledgling business, such as custom invoices, recurring transactions, and bank reconciliation. Zoho makes it easy to track multiple projects or expenses at once, allowing you to automate certain tasks or seek approval for others. There is also a long list of plugins to help you personalise the customer experience, such as plugins to track deliveries, help you manage your email, or a chatbot to help with customer enquiries, making this a superbly affordable choice for people who are just starting out and may not have a lot of experience.

5: Wave

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Founded in 2010, Wave is a much newer entrant to the market than those we have looked at already, but that hasn’t stopped it from becoming a major player. Wave has a very simple online dashboard that essentially boils down to a few clicks and some typing, but allows you to create professional level invoices and graphs. Perhaps the biggest appeal of Wave is that it is completely free to use, with no limitations. The company makes its money by charging 1.4% + €0.25 on all European card payments, or 2.9% + €0.25 on all non-European cards. While this arrangement may not be suitable in the long run, it enables new business owners to get the support they need, without investing any resources beforehand.

6: Sage

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Dating as far back as 1981, Sage is one of the oldest accounting software firms in the world. In the nearly three-decades since, they have built one of the most flexible and secure forms of accounting software available on the market, offering all the features you would expect, from the basics such as automated invoicing and cash flow management, to the more complex issues such as tax filings or fraud. Although Sage does have various products in different price ranges, they are most popular among large corporations that deal with a high volume of customers. Unless you clearly intend to use particular features of this product, or plan to upgrade your subscription in the future as your business grows, there are not many reasons for a new business owner to use Sage rather than some of the alternatives listed, many of which offer similar features with less complexity at a lower cost.

7: Zipbooks

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Zipbooks is another relatively new entrant to the finance software scene, and like many of the newer companies, it gives customers the chance to avail of its most basic features for free. Invoicing, payments, financial status reviews, and bank reconciliations are all available for free on their starter pack, with a 2.9% fee attached to all card payments. There are not as many bells and whistles in the free starter pack as you might find in the likes of a well-established brand like Sage, nor is there the same level of third-party plugin support as there is for Zoho, but there are three tiers of paid plans, allowing you to unlock any extra features you may need as your business grows.

8: Invoicely

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Most of the options listed above focus on startups or small businesses, but soe operations are even smaller than those. These days, many people make money from a hobby, or run various small online businesses. For situations like these, software such as Invoicely can help people manage a small volume of transactions, even under multiple brands, for free. All of the more advanced features such as project management, delivery tracking, or multiple users are available through their paid subscriptions, making this an ideal choice for people who want to see if they can turn their pet project into a viable business.


As you can see, many of the features offered by these products are more or less the same, regardless of which software you choose. But with different levels of detail, support, prices, and customisation, these products are far from identical. For some businesses, features such as delivery tracking or dealing in multiple currencies are crucial, while for others they are completely redundant. To determine which software is best for you, you need to look ahead and see which direction you hope to move in. While you can always switch at any time, getting it right the first time will make it much easier for you to learn what you need, and successfully manage your business in the long run.

What Is Business Development And Why Does It Matter For Your Company?

“Business development” is one of those terms that, on the surface, is pretty self-explanatory. Clearly, it refers to helping a business grow into a viable, sustainable source of profit. But at the same time, the term is quite vague.

A lot of different factors go into helping a helping a business grow, from marketing and sales, to increasing profit margins and distribution. So what is business development exactly, and why does it matter for your company?

There is no single definition of the term “business development” that is widely used, but it could be defined as the pursuit of opportunities designed to create long-term value for a business.

In that regard, business development is not concerned with immediate “wins” such as a big sale, or a limited-time offer. Instead, the key focus of business development is to increase the value of a business in the long-run, such as by establishing a strong base of repeat customers, or improving a brand’s name-recognition and reputation.


Measuring Business Value

So when we ask why business development is important for your company, the answer may seem obvious: value is good. But there are many ways to measure value, and not all of them are worth as much as the others.

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“One of the most basic ways to measure the value of a business is to look at the profit it makes”

Terry Abbott, Shelbourne Accountants

Looking at profit alone is a simplistic overview, but many things can affect business value in the short-term, such as a big, one-off sale.

Contact Shelbourne Accountants to see how we can help in your business development strategy

This would make the profit for that particular year look bigger, but if the sale was a guaranteed one-off, then this profit does not accurately reflect the overall status of the business in general.

Measure By Intangible Assets

Another, less-common way to measure value is to look at its intangible assets.

For example, a comprehensive global supply chain is an incredibly valuable asset for a business to have, as it enables them to introduce new products to as many different markets as possible in a short period of time.

This will attract better business partners and enables them to negotiate more lucrative contracts. Alternatively, if you owned the intellectual property rights to a biodegradable form of plastic, you would not need to make any sales before the value of your business increased substantially.

The Five Stages Of Business Growth

Business development prioritises opportunities such as these, which create long-term value, but also take longer to build up. Exactly what kind of strategic opportunities a business developer will pursue depends on which of the five stages of growth the business is at.

Stage one: An Idea Is Born

The first stage is where the idea is born, which involves identifying any potential long-term opportunities, whether there is a gap in the market, and if there could be profit.

Stage Two: The Idea becomes a business

If an idea is worth following up on, the next stage is to turn it into a business. In this stage, the development opportunities include seeking funding and investment, finding the best staff, and identifying and securing customers.

Contrary to the definition of business development as seeking “long-term” opportunities, you could argue that this stage focuses on securing enough funding in the short-term to keep the business afloat.

However, this is just a means to securing the long-term goal of creating a viable and stable business.

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Stage Three: Bringing In New Customers

The third stage is quite important in terms of business development, but can often be skimmed over by entrepreneurs who get swept up their success so far.

Logically enough, most businesses in this stage want to bring in new customers, and scale the business as much as possible. But before trying to increase profits, it is best to try to increase your profit margins.

Once the business is established and has a reliable client base, you have a period of reasonable safety.

Stage Four: Increasing Business Profitability

This is the time to try and increase your productivity, lower costs, and increase your profitability.

Not only will it be easier to attract customers with a better, cheaper product or service, but any subsequent sales you do make will be more profitable for you.

Once you have made your operation as efficient and cost-effective as possible, it is time to scale the business. This involves seeking new clients, as well as new distribution channels, in order to increase your share of the market, as well as identifying any new potential revenue streams.

This could include things like a subscription-based service, the introduction of a new product to your portfolio, or the repositioning of the business in order to enter entirely new markets.


Case Study: Michelin Star

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A perfect example of a company that has done this well is Michelin. Few badges of honour in any industry command the same level of recognition and respect as the Michelin Star. And yet few people ever stop to wonder why the ultimate prize in decadence and sophistication is awarded by a company that sells tires, one of the least glamorous products available. In reality, the reason is ingenious for its simplicity, and highlights exactly what a good business developer should be doing.

In the early 20th Century, around the time cars were becoming more commonplace and less of a luxury item reserved for the rich, Michelin had a strong international distribution network. Using this network, the compiled a free guide with information to help motorists, from maps and repair instructions, to hotel and restaurant recommendations. The initial idea was to encourage people to drive more by making it as easy and appealing as possible, thereby increasing tire sales. Today, the guide is so successful in its own right that many people never even realise it is associated with a tire company.


Stage Five: Business Maturity

The final stage of business development is when the business matures, which is marked by an increased, stable market position, and a plateauing of the rate of expansion.

But even if profits are healthy and you own a huge share of the market, stagnation is never a good thing for business.

At this point, therefore, a business developer needs to decide the way forward.

This means either going back to stage four and looking for new opportunities to expand, or simply deciding that you have taken the business far enough and planning your exit, such as by selling your stake in the company or taking it public.


In some ways, business development is a relatively formulaic process. In order to be done as well as possible, the stages should be followed in sequence, which pretty much anyone can do. But ultimately, the people who will be most successful at business development are those who can think outside the box, and identify opportunities that others have missed. If you can do that, then achieving success could be as easy as simply sticking to the formula.

What Changes Will You See On Your Payroll In 2019

After nearly 60 years of helping employers calculate the correct deductions for their employees’ pay cheques, Ireland’s PAYE (Pay As You Earn) system is getting a dramatic overhaul. As of January 2019, PAYE modernisation will change how you report your payroll information to the Revenue Office, so what changes will you see on your payroll?


The biggest and most noticeable change for employers will likely be the scrapping of the P35, the annual report detailing all the information regarding employees during that previous tax year.

This will be replaced by the submission of an electronic file every pay period (be it weekly, monthly, etc). This file will contain information similar to that found in the P35, such as payments and deductions.

It is expected that this new system, called Real Time Reporting (RTR) will reduce the number of overpayments and underpayments made to the Revenue Office each year.

Thankfully, the new system has been designed to be fully integratable into existing payroll software, meaning that employers currently using payroll software should not experience any major increases to their workload.

Unfortunately for smaller businesses who may not have invested in such software, the real time element of the new system may put them under pressure to keep up every pay period.

But the P35 isn’t the only aspect of the old system that will be receiving its P45. In fact, all revenue forms, from P2 to P60, will be gone from next January.

For employers, new and outgoing employees will have their status registered through the real time system, while employees looking for statements such as a P60 will simply retrieve the information from their own online accounts page.

Finally, here are a few tips to help you ensure you are ready for the big change:

  • Ask all employees to resubmit their PPSN, and build a list of all active employees, with all leavers removed.

  • Ask all employes to register with Revenue online to ensure that the correct Revenue Payroll Notifications (RPN) are used. This will help avoid miscalculations.

  • Submissions should be made no later than the day an employee receives payment, and can be made in advance.

  • Employees with concurrent contracts or returning employees will need new employee IDs.

  • Any mistakes in the amount paid should be corrected in the following submission period. Leaving it longer to correct mistakes may lead to complications and increased scrutiny.


The changes we will see to the PAYE system are big, and may cause some confusion at first. But overall, it appears that these changes are a necessary update to a system that has been in place since 1960, and will help make the PAYE system fit-for-purpose. If you would like more information on the impending changes, make sure to read the pamphlet released by Revenue, entitled “PAYE Modernisation - Are You Ready?

How To Generate & Maintain A Positive Cashflow

Generating and maintaining a positive cash flow is essential not only in the overall success of a business, but also in its ability to function on a day-to-day basis. The cash flow of a business is usually a good indication of its overall health, so it is important that you as a business owner are reviewing it regularly. This will enable you to identify any unnecessary drains on your resources, as well as to spot any potential opportunities. For these reasons, we have compiled a comprehensive list of ways you can generate and maintain a positive cash flow.

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So, What is cash flow?

Before we discuss how to properly manage your cash flow, we need to be clear about exactly what it is. The term “cash flow” refers to all money that is moving both in and out of your business each month.

Therefore, cash flow is a broad term that encompasses all money coming into your business from the sale of products or services, as well as all money going out in the form of expenses, including everything from rent, stock purchases, wages, insurance, utility bills, and so on.

If your business is bringing in more money than it is sending out, it is said to have a “positive cash flow”. If it is losing more money than it is gaining, it has a “negative cash flow”.

It is worth noting that while cash flow refers to the balance of all incoming and outgoing cash, it is best thought of as medium to long-term trends.

For example, if you purchase an expensive new piece of equipment, you may spend more than you bring in on that day.

While this is technically a negative cash flow for that day, it is not particularly useful to view it as such, as it is a one-off investment that will hopefully increase your takings going forward.

It should also be noted that the value of the equipment you purchase may increase the net value of your business, but will not improve your cash flow, as it is a non-liquid asset i.e. one that cannot be quickly exchanged for money. 

Monitor Your Finances

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We have all heard the saying “Look after the pennies, and the pounds will look after themselves”, and there is quite a lot of truth to this.

When it comes to the business world, we are far more likely to hear people talk about the importance of the bottom line.

But don’t forget about where the term “bottom line” comes from: it is the end result of all your financial dealings, the final answer to every single sum your business has had to calculate.

Although the bottom line may be the most important number in your business, it depends entirely on everything that has come before it, so improving it is a matter of improving what comes before it. It is the pounds, and you need to remember to look after the pennies.

The Best Businesses Keep tabs on everything

As a result, the best business owner in the world will know exactly where every penny in their business is coming from, where it is going to, and why.

This of course means keeping track of absolutely all financial aspects of your business, and the most effective way to do this is in real-time.

These days, there are literally countless real-time financial tracking products and services to help businesses keep tabs on their income and expenses.

Using software to keep on top

There is a range of software available that each offer a variety of functions, such as personalised payment portals, automated invoices and reminders, wage calculators, and analytics, to name a few.

This can be extremely useful in helping you to examine your financial state in microscopic detail, but the majority of these are subscription-based products, so using them will naturally add to your monthly expenses, thereby negatively impacting your cash flow.

This may be a worthwhile investment for large, healthy, or established businesses, but for small or new businesses, it may be a luxury rather than a necessity.

Using Spreadsheets to keep on top

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While it may take more time and effort, many of the most important points of real-time financial monitoring can be achieved by using a simple spreadsheet, such as those available through Excel or Google Sheets.

This means that every single time money moves in or out of your business, it should be entered into the spreadsheet.

These spreadsheets can be used to keep track of your finances from a number of different perspectives. Before continuing, let’s just remind ourselves of some of the key words involved in spreadsheets:

  • Cell: An individual rectangle in which you can type text.

  • Spreadsheet: A collection of cells, labelled alphabetically from left to right, and numerically from top to bottom.

  • Row: A horizontal line of cells, which by default are referred to by a number.

  • Column: A vertical line of cells, which by default are referred to by a letter or combination of letters (once you exceed 26 columns, they are named in the format AA, AB, AC, etc).

Columns and rows can be renamed to help you present everything in a clear and consistent fashion. To use a simple example, your columns could be named after the months of the year, and your rows named after your clients.

So if  the cell at the intersection of Column A and Row 1, you could have “January” and “Murphy & Sons”. When they place their January order, you issue your invoice, after which you enter the amount due.

By right clicking the cells and selecting the paint can, you can colour each one: blue for unpaid, red for overdue, and green for paid. Faithfully executing such a technique enables you to glance at your spreadsheet and immediately know who owes you how much.


The FAST Approach

The best way to implement real-time financial monitoring is by using the FAST standard. The FAST standard is a set of guidelines laid out by industry experts to help people create a clear and consistent model for financial monitoring.

The latest publication from the FAST Standard Organisation describes its purpose as follows:

The Signatories to the FAST Standard believe financial models must be as simple as possible, but no simpler. Any model that is unnecessarily complicated is not good. Without simplicity supported by rigorous structure a financial model will be poorly suited to its sole purpose – supporting informed business decisions
— FAST

FAST is an acronym for Flexible, Appropriate, Structured, and Transparent, and it has been designed specifically with spreadsheets in mind. Below is an explanation of each of these four pillars.

Flexible:

The financial model and techniques used need to be adaptable, allowing you to easily input or remove information, and to examine the impact of hypothetical scenarios with ease and reasonable reliability. For example, if you were negotiating a major deal, you could easily input the value of that deal and calculate how it would affect your bottom line. Alternatively, you could remove an existing client, and examine what the potential impact of that would be on your business.

Appropriate:

In order for a model to be flexible, it needs to comprise of only the most appropriate information. If your spreadsheet is loaded with a lot of trivial information and insignificant details, you not only make it more difficult to quickly alter the information, but you also begin to drown out the most important figures.

It is also important that the information included in your model is of the same quality. This means that two pieces of information that are presented side-by-side should have roughly the same level of reliability.

For example, while it may be useful for you to estimate how much you expect a certain employee to sell in a month based on previous months, this should not be put next to something like tax rates.

The rate of tax you are expected to pay is a cold, hard fact, and is not going to suddenly change overnight without warning. Your employee, on the other hand, could quit, or underperform. By presenting projections next to facts, you give the impression that the projections are more reliable than they really are.

Structured:

Financial modelling is always an ongoing process, and there will be many times that you need to need to draw up comparisons, such as this month versus last month, or today versus this time last year, for example.

Therefore, it is extremely important for you to strictly adhere to one model. A restaurant owner who lumps all drinks products under the banner of beverages should not suddenly split this into alcoholic and non-alcoholic beverages, as they will have no historical data on this split to accurately analyse trends.

Decisions on how information is best presented need to be made at the beginning, or it will complicate things further down the line. It is also more difficult and confusing to compare different spreadsheets if each one lays out the same information in different ways.

Transparent:

Almost anyone should be able to look at your spreadsheet and understand what is going on. Information that is obscure or vague is not helpful in understanding how a business is functioning. If you simply provide the total amount earned without giving any indication of where that money came from or what brought it in, it is much more difficult to understand what is or is not working in the business.

When properly applied, real-time monitoring can be an invaluable asset to a business, allowing you to identify negative trends, such as loss-making orders or slow-moving stock. You can then make an informed decision on how to rectify the situation, such as by altering your prices, or eliminating a product or service altogether.

Payment Terms / Policy

In order to give yourself the best chances of being paid in full and on time, you need to provide your customers with clear payment terms / payment policy. This should clearly set out the date by which payment is expected to be made, as well as any incentives for early payment and disincentives for late payments.

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Offering discounts on early payments is a good way to ensure that your inward cash flow is moving as quickly as possible, although you will need to consider the financial hit you will take by offering such a deal.

Charging a late payment fee, on the other hand, can not only help prevent late payments, but also provide you with some additional income at no extra cost to you.

Keeping Clear Documentation Is A Must

Keeping clear documentation and as much of a paper trail as possible is extremely helpful in resolving any disputes that may arise. Invoices should always be issued as soon as possible after an order is placed.

Requesting that the customer confirm that they have received the invoice, and that they flag any issues immediately can help prevent disputes further down the line.

Knowing exactly who to send it to can help speed up the payment process, as can sending reminder emails a few days before payment is due, on the day itself, and, if necessary, a few days after. Employing these techniques allows you to be firm, but fair, when following up on late payments.

Your Cash Flow Calendar

Depending on your line of work, you may have a large volume of recurring orders. And no matter what your line of work is, there will always be certain expenses that need to be paid at a certain time, such a rent/mortgage, utilities, and wages.

It is worth taking some time to compare your the dates on which cash is expected to flow in with the dates it is expected to flow out, and try to arrange these in such a way as to ensure you are not hit with a giant wave of income or expenses once or twice a month.

A consistent, low-level flow of cash offers more flexibility should it be needed, and arranging these dates properly early on can avoid a situation where you are hit with an unexpected expense, but have no guarantee of cash coming in for weeks.

And of course, it is always advisable that you set aside a certain proportion of your income to build up some cash reserves, as sudden and unexpected expenses are all but guaranteed to arise at some point, and failure to prepare for perfectly predictable scenarios such as this is a recipe for disaster.

Properly Consider Your Deals & Offers

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Offering a discount on early payments can be an effective way to get the money you are owed as soon as possible.

But of course, the discount on offer needs to be smaller than the profit margin on that order, and even then you need to consider the real impact of such an offer, particularly if the order is likely to be a recurring one. Ill-conceived deals can be absolutely detrimental to a business.

McDonald’s marketing howler

Possibly the best way to underscore this point is by looking at how McDonald’s handled the 1984 Los Angeles Olympic Games.

Often referred to as the biggest disaster in the history of marketing, McDonald’s had hoped to cash-in on some of the pro-American sentiment during the games, and offered a card with an event on it with every purchase.

If the U.S. won a medal in that event, the customer would receive either a free Big Mac (Gold), fries (silver), or a drink (bronze). What McDonald’s didn’t consider was a potential boycott from the Soviet Union, who claimed their athletes would not be safe in America.

That year, the U.S. won 174 medals, 100 more than they would win in the following 1988 Summer Games.  6,600 outlets across the nation we inundated with customers looking for their reward, and quickly ran out of food.

If a company as big and powerful as McDonald’s can make such a catastrophic error, despite having access to an endless line of lawyers, marketers, and business geniuses, a small business could easily fall into a similar dilemma.

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Promotions such as the use of loyalty cards can be extremely useful in getting customers back in the door, which is an incredibly powerful thing to do as it is 15 times easier to sell to an existing customer than it is to sell to a new one.

Once again, you need to do your calculations and ensure that the item a customer gets in return for their loyalty does not wipe out the profits that came before, and furthermore, you need to ensure that your system is safe e.g. use a personalised stamp rather than a generic X, so customers cannot cheat the system.

Not only is it considerably easier to sell to an existing customer, it is also much easier to sell more to a customer once they have decided to to make a purchase at all.

Back End Products: You Might Also Like

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With this in mind, a good business owner will always look at promoting back-end products or services.

You will no doubt be familiar with this practice online, where retailers will show you items also bought by other customers, or food delivery companies offering suggesting side-dishes or drinks to go with your meal.

Providing back-end products not only means you will be selling more overall, but the products themselves can often have a much higher profit margin than the original purchase.

Someone who has just purchased an expensive pair of glasses is highly likely to consider buying a stronger case to protect them, or a cleaning/repair kit, for example.

While these items won’t bring in the bulk of your cash, they will add up over time and make a noticeable improvement to your cash flow.

Business Credit Cards, and Other lines of credit

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While it is advisable not to become overly reliant on or frivolous with credit, setting yourself up with a business credit card and using it appropriately can be very helpful both in emergencies and in the long-run.

Even if you have cash in the bank, paying your expenses with credit, and then paying that credit off early can improve your credit score by establishing a history of reliability.

You can take this a step further by ensuring that you stick to a low credit utilisation ratio, meaning you only use a fraction of what your limit actually is.

This reinforces the point that you are a responsible spender and a trustworthy customer for the bank, which will make it easier to increase your limit in the future.

Building a good credit rating

When that happens, it becomes even easier to decrease your credit utilisation ratio, and improve your credit rating even more.

Beginning this process when you don’t particularly need to makes it a lot easier to achieve a good credit rating than suddenly signing up for a card when you need it, and hitting your maximum limit the first time you use it.

And of course, all of this gives you a little more breathing room and can prevent any issues with outgoing cash, late payment fees, and fundamental overheads such as wages or utilities.

As a business owner, generating and maintaining a positive cash flow should always be at the forefront of your mind.

Achieving this requires a multifaceted approach that takes into account all aspects of your business.

No expense should ever be free from scrutiny, and you should constantly be looking for ways to decrease your costs.

Whether it is reducing your electricity bill by switching to LED bulbs, or dropping a product you love personally because it just isn’t selling fast enough, there are always ways to reduce your cash outflow.

Similarly, there will always be new opportunities for you to improve your cash inflow, be it by bringing on a new product, running a well-calculated promotion, or simply staying on top of your invoicing.


Arguably, the most important element of cash flow management is the point we discussed first: making sure it is properly monitored. Without this, money will fall through the cracks, things won’t be run as efficiently as they could be, and you will be unable to identify trends and make well-informed business decisions. Ultimately, the buck stops with you, and it is your responsibility to know exactly where those bucks are flowing.

10 Little Known Resources That'll Make You Better At Business Development

One of the oldest questions in business is “Which matters more, education or practical experience?”. In reality, a healthy mix of both will always be the preferred option, but when it comes to striking this balance, there is one major pitfall in which many people become trapped without ever realising. Namely, we tend to have the mentality that education is something you get when you are younger, before moving on to practical experience.

Today, this idea of learning everything you need to know and then heading off to work just doesn’t apply anymore. The world moves so quickly now that entrepreneurs who want to get an edge over their competition need to be constantly retraining and absorbing new information, or they risk getting left behind. But this does not mean you have to go back and get another college degree. As long as the information is reliable and well-sourced, it doesn’t matter whether it comes from Harvard or YouTube, so here are 10 resources that will make you better at business development.


Khan Academy

Of the many free online courses available today, the Khan Academy is widely regarded as one of the best. The not-for-profit organisation offers ad & subscription-free access to courses covering a broad range of business & finance-related subjects, including but not limited to maths, economics, finance, and entrepreneurial skills.

The courses offered by the Khan Academy can help you improve your business development skills directly, or can help you better understand a particular subject that may be related to your field, such as engineering, health, coding, and much more. If you’re looking to fill any gaps in your academic knowledge, this is the place to start.

To Bid or Not to Bid

Not all education revolves around learning theories, formulae, and cold, hard facts. In many cases, it is just as important to learn about business tactics and judgement, but this can be a lot harder to do.

Learning through trial and error can be a risky and expensive process, especially when it comes to things like bidding for contracts. Not only do you want to avoid investing too much time and energy into farfetched prospects, you also want to avoid winning anything you can’t deliver on, or you could find yourself at the centre of the next NCH debacle. This checklist can help you separate the realistic from the unrealistic, and decide whether or not you should place a bid.

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Hubspot Academy

Hubspot may have more name-recognition than the Khan Academy, but it is lower in the ranks for one reason: not all of its courses are free. Many are, but some require an active Hubspot subscription to sign up and complete, which could be a barrier to some.

While the Khan Academy focuses mainly on the financial side of business, Hubspot Academy focuses more on the marketing side of things, so it is not necessarily a case of choosing one over the other, but the right mix of both.

Future Risks and Opportunities

One of the most crucial skills to learn in any line of business is risk-benefit analysis, which is another example of a time when trial and error can be a costly process. It can also be quite difficult to attribute these relatively abstract concepts to a number of potential outcomes. The Future Risks and Opportunities Toolkit is a very comprehensive document will walk you through various steps and methods needed to calculate the likelihood of various options, and identify any potential problems that may arise, enabling you to make an informed decision and avoid any unnecessary risks.

Investopedia

If you regularly read up on business or finance-related topics, then you are likely already familiar with Investopedia, which maintains one of the most comprehensive financial dictionaries on the web.

What you may not realise is that Investopedia also provide detailed guides on a variety of finance-related topics.

While the range of topics Investopedia covers is not as broad as the likes of the Khan Academy, they do offer guides on more specific subject matter related to taxes, investment, financial theory, and so on, so if you’re looking for very specific information rather than a general overview, this is where you should look.

Podcasts

While the Khan Academy is a great resource for a laying a broad foundation of knowledge, and Investopedia helps you find answers to specific questions, anyone who is a true expert in their field will understand both established mainstream theory, and new or alternative views.

So while you certainly want to get most of your information from clearly reputable sources, it is also useful to hear from those who may not be as well known, but who have expertise and experience that could benefit you. Podcasts are the perfect way to do this, not only because there are so many to choose from, but also because they tend to get alternative viewpoints on the most topical issues, ensuring that you are kept in the loop with regards to the latest developments in your field.

Ted Talks

Ted Talks tend to delve into their subject matter in a single video, placing them somewhere between a free online course and a podcast.

Ted Talks tend to delve into their subject matter in a single video, placing them somewhere between a free online course and a podcast.

Ted Talks cover an extremely broad range of topics, from personal stories of social issues to easy explanations of complex scientific subjects. As there is no overarching narrative to the Ted format, it can be easy to forget what a valuable resource they are. But since they can be hosted by almost anyone, you can find a Ted Talk on almost any subject these days.

Self Coaching

One of history’s oldest and most popular ways to hone your abilities in any field is to get a mentor. But finding a good mentor who you respect and who is willing to take you under their wing is not always an easy thing to do. And although a mentor is not a necessity, you still don’t want to miss out on any possible feedback or insight.

This self-coaching document has been designed to walk you through a series of questions, depending on whether things are going well or not-so-well at work. It may not be the same as a real mentor, but it can teach you how to self-reflect and criticise constructively.

Partnership Analysis Toolkit

Who you decide to do business with can determine whether or not you are successful, so ensuring that all of your partnerships are working in your favour is a crucial step in protecting yourself from being brought down by somebody else. This Partnership Analysis Toolkit was designed for the health sector in Australia, although the material is not specific to that sector. Using this toolkit can help you determine if a partnership is a healthy one, or whether you may have conflicting interests down the line and need to part ways.

Business Development Toolkit

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There’s no point in developing the individual skills needed for business development without actually studying business development as a concept as well. This toolkit by business psychologist Alan Bradshaw walks the reader through the various stages of developing a business, covering everything from how to choose a premises, to building rapport with clients.


Business development is a broad topic filled with lots of different tactics, theories, and techniques. It is not an exact science, and not everything will apply equally across the board. The key thing to remember is that business development is a never-ending learning process. Not all of the information you learn will be useful to you right now, but by casting a wide net and learning as much as possible, you can prepare yourself for anything the business world might throw at you.

7 Tax Reliefs You Didn't Know Were Available To Contractors

One of the most difficult aspects of moving into contract work is learning how to manage your cash responsibly. Usually, contractors are paid above-average rates, due to the short-term nature of their work. It can be exciting to see how much is paid for just a few hours, or days, of work, but it is important to remember that this money needs to be budgeted and spread out, as there won’t always be work available.

Budgeting is an important part of making contract work a sustainable employment option, but it doesn’t end there. Ensuring you are paying the correct tax, and claiming all the relief available to you, is instrumental in making contract work a success. But the tax system can be confusing and hard to navigate, making it easy for people to miss out on opportunities for relief. Below, we look at some of the tax relief available to contractors that could make a big difference to your take-home pay.


Travel Expenses

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Travel is probably the most well-known allowable expense, but there are a few important things to note to avoid claiming relief where it is not allowed. Travel is an allowable expense when the journey is intended to advance the interests of the business. Travel to a client’s premises, a training course, or a business conference would all fall under this category. The cost of these trips can be reimbursed, tax-free, using either the actual cost of travel, or rates no higher than those offered to civil servants. If the trip is made using public transport, then the cost of the tickets can be reimbursed tax-free.

It should be noted that if you rent a working space, travel between home and here is not an allowable expense.

Subsistence

A freelance plumber is unlikely to spend more than a few days at the same location

A freelance plumber is unlikely to spend more than a few days at the same location

Depending on the nature of your contract work, you may or may not have what is considered a “normal place of work”. For example, a freelance web designer would likely work from home or in a shared office space, while a freelance plumber is unlikely to spend more than a few days at the same location.

If you do have a normal place of work, and need to leave that location for work-related reasons, you could be entitled to claim a subsistence allowance. Similar to allowable travel expenses, subsistence payments can be made tax-free either at cost or calculated using civil servant rates. The only requirements are that the destination is beyond a certain distance from both home and the normal place of work, and that the trip lasts a minimum length of time e.g. 100km is the minimum distance for an overnight trip.

Rent & Utilities

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“If you normally work from home, then it may come as a nice surprise to learn that you can claim tax relief on a portion of both your rent and your utility bills.”

The easiest way to claim for these expenses, which will suffice for most people, is to compare the square footage of your working space to the overall square footage of your home, and claim that proportion as a business expense. So if your office takes up 15% of your home, you can claim relief on 15% of your rent, broadband, electricity, and so on.

In some cases, the fact that you are working from home may mean you require more than just an office. A carpenter, for example, would require more space, such as a garage or workshop. In this case, you can claim relief on the rent difference between properties without such a space, and your own property, as it is clear that the difference is a result of business operations.

Wages & Fees

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As a contractor, you are highly likely to engage the services of legal and financial professionals at some point. You may also be required to bring in additional staff for some jobs, but not for others. Regardless of whether you are paying someone to handle your business affairs, or to actually provide labour/services, you can claim relief on any money you pay for people to carry out work on your behalf. This includes salaries, recruitment costs, insurance contributions, consultation fees, and in some cases, bonuses. However, you cannot claim tax relief for your own salary or for an owner’s draw.

Lease Payments

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One of the disadvantages of being a contractor is that you don’t have access to the same resources that larger businesses would. For this reason, it is quite common that a contractor may be required to lease a vehicle or piece of equipment on a short-term basis. As long as the item in question is being leased for business purposes, you can claim relief on any of the payments made for it.

Running & Repair

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For any equipment you do own, you will be pleased to learn that you can claim relief against any cost associated with keeping the equipment running and operational. It doesn’t matter if the machine needs to be filled with paper or petrol, if you need to purchase something for it to work, you can claim tax relief on those purchases.

It follows logically that any maintenance or repair costs needed to keep the equipment functional can also be deducted. If the equipment is used for both personal and business purposes, only a portion of the costs are allowed.

Small Benefits

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If you do employ other people, it is good to know about the small benefits relief. This allows you to give a one-off, non-cash gift worth up to €500, tax-free every year. The gift cannot be cash or directly exchangeable for cash, and while a gift can be up to €500 in value, only the first gift given will be exempt from tax, meaning you cannot spread this throughout the year.


There are a lot of challenges associated with contract work, with many of them being financial in nature. There will not always be a steady flow of cash or work available, so managing your cash flow is critical to your success. Fortunately, the government does offer support in a lot of different areas, so make sure you review the tax relief available to you, to ensure that you’re not paying too much and harming your chances of succeeding in the long run.

Self Employed? Here's Some Expenses You Can Claim Back

One of the most important aspects of being self employed is knowing how to correctly file your taxes. But self-assessment can also be one of the most confusing and worrying aspects of self-employment. You want to ensure that you are claiming any expenses possible, but incorrect filings can lead to big fines.

In order to legally claim something as an expense, it has to be used for business purposes. But for people who are self-employed, this line can often be blurred. Most self-employed people will use the same car and phone for personal and business purposes, for example, leading many to worry about how much to claim back.

Ensuring that you pay what you owe and claim back what you can is instrumental in helping you to succeed in self-employment, so below is a list of some key business expenses you can claim back.


Travel Expenses

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Let’s begin with one of the most common expenses: travel. Although this is often a major concern for self-employed people who use the same car for business and personal use, it will come as a relief that the rules are actually quite straightforward. You are entitled to claim a percentage of all maintenance and running costs, such as fuel, repairs, insurance, and NCT. However, you must calculate what percentage of the vehicles use is for business, and keep receipts in case you need to prove how you arrived at this figure. It should be noted that travel between home and a place of work is usually not a deductible expense.

Similarly, any travel expenses for business trips, such as train tickets, flights, or hotels, can be legitimately claimed as business expenses. Again, you should keep documentation to prove that a trip’s primary purpose was for business if need be.

Rent & Utility Bills

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If you work in some sort of shared office space, the cost of this can be claimed back as an expense. But many of the people working in self-employment do so from home, which can be confusing. The good news is that you can claim a percentage of bills such as electricity, gas, phone, and broadband.

Like motoring expenses, you need to be realistic about what proportion is used for business.

Like motoring expenses, you need to be realistic about what proportion is used for business. For example, there are 168 hours in a week, so if you work 40 hours online, you can claim back 24% of your broadband charges. Alternatively, if the space used for business is 10% of the total square footage of your home, you could claim 10% of your rent or heating as a business expense.

Marketing Costs

Marketing is critical to the success of any business, but it is particularly important for the self-employed. It should come as a relief to many then that these costs can be claimed back as expenses. Any promotional material that appears online or in print can be deducted, but please note that entertainment costs, regardless of whether they are for staff or customers, cannot.

Consultation

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If you are self-employed, you are likely to build up some consultancy fees for expert services, such as legal or financial advice. As long as the advice sought is related directly to the operation of your business, these can all be claimed as an allowable expense.

Staff Costs

Similarly, you can claim for any expenses that go towards employing other people, although you cannot claim back your own wage or any owner’s draws. But any salaries, bonuses, recruitment costs, or insurance contributions can be claimed back.

Financial Charges

They may not appear to be the biggest expense, but financial charges can add up over time, so you want to make sure you’re not missing out on any allowable expenses. Any fees, whether they are for maintenance, currency conversion, overdrafts, and so on, can be claimed back against your taxable income.

Interest on Loans

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In addition to being able to claim back fees and charges from financial institutions, you can also claim back the interest on any business loans you may have taken out. However, it is crucial to note that this only applies to the interest on the loan, and not to the repayments of the loan.

Lease Payments

Any lease payments for vehicles or machinery directly related to business operations can be claimed back. If the vehicle/machine is also also used for personal use, then only the business portion can be claimed back. There are also different limits depending on the CO2 emissions of a vehicle which will affect how much can be claimed. For more information on this, please see this document by the Revenue Commission.

 

Capital Allowance

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If you purchase a new piece of equipment for your business, such as a laptop, this is considered a business asset. This means it is not listed as an expense, as not only is the equipment intended to bring in more profit, but it can also be sold at a later date. However, as the value of the item will go down over time, you can claim back the cost of the asset as an expense.

It is important to note that you are not claiming back the depreciation, which is not an allowable deduction under Irish law. Instead, we allow the cost of assets that meet these criteria to be claimed back at a rate of 12.5% over 8 years. In simple terms, this means you can claim back 12.5% of the original cost of an asset per year, regardless of depreciation. 


Making the move from a standard 9-5 job to self-employment is a big leap. It carries with it plenty of stress and worries, and will often be an uphill struggle. That means it is all the more important to make sure you are filing your taxes correctly. It is not a simple process, but all these claims add up over time, saving you money, and making it a lot more likely that you will succeed in your endeavours.

In House Accounting Vs Outsourcing

In House Accounting Vs Outsourcing

In their earliest days, many small business owners will choose to take care of their accounts themselves. For some, this can be a helpful way to familiarise themselves with the inner workings of their business and its financial process. For many, it is simply a way to keep costs down until they find firm footing. But as the business grows, almost all will choose to hand over this task to someone else. At this point, a decision must be made as to who will be responsible for one of the most complex, but important, aspects of the business moving forward.

Assuming you are not one of the (very) few people who decide to keep taking care of the accounts, there is one main decision you need to make: whether to have someone do this work in-house, or to outsource it. Each option has its own specific advantages, and determining which is best for you will depend on your own needs and, to some extent, the resources you have available.


Weighing Up The Cost

Cost is obviously one of the biggest factors behind any business decision, but particularly one that involves a potentially major expense such as hiring a new employee. If you’re going to take on such an expense, you need to know that you are getting enough in return to justify it. For the majority of small or medium sized businesses, there simply is not the volume of work to warrant a full-time financial role.

The average bookkeeper’s salary in Ireland is around €33,000 a year, while the average accountant’s salary comes in at roughly €50,000. This is almost enough to hire 2-3 full-time employees on minimum wage. Then there are employee overhead costs, such as insurance, benefits, taxes, and space/equipment, which increase the cost of hiring an employee by about 20%.

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“Unless you have an incredibly high-volume of financial work that needs to be done on a continuous basis, bringing someone in to look after your finances is an extremely costly and inefficient way to handle this side of the business.”

Weighing up the potential Quality

As you likely already know, bookkeeping and accounting are not particularly easy tasks. They are complex processes that require various mathematical skills, an incredible eye for detail, and years of training to master.

One of the biggest advantages to building your own in-house team is that you can fill it with people who have experience in your specific field. This kind of approach results in a situation where you have a team of people who are not only good at their job, but passionate too. But unless you have the resources to assemble a full team, you probably won’t reap these rewards with just one person.

Unless you’re willing to shell out top dollar for the best in the business, hiring one person will never get you the same level of skills that you will receive from a whole team of experts. Furthermore, when there is one person who is very clearly designated as being responsible for the finances, they tend to have very little in-depth oversight, and it is very easy for mistakes to go unnoticed.

When the work is outsourced, however, you get access to a whole team of experts who not only have a great level of combined skill, but have much more oversight as well, with the end result being that the work carried out is of much higher quality.

Factoring Efficiency In To The Equation

Bringing someone in to manage your books can be appealing for many reasons, not least of which is the ability to see that they are working, and working solely for you. Many employers simply feel more comfortable with having someone on-site at all times, with a vested interest in the success of that business. But apart from the costs associated with this, and the increased risk of mistakes, the argument can easily be made that this is a counterintuitive approach.

Firstly, if the workload simply isn’t there, then outsourcing will clearly be a more efficient and cost-effective way to get the work done. But regardless of the amount of work, assigning it all to one person leaves you in a vulnerable position.

If that employee takes annual leave or sick days, somebody else will have to take on the task of handling the accounts while they are away, which is easier said than done.

If that employee takes annual leave or sick days, somebody else will have to take on the task of handling the accounts while they are away, which is easier said than done.

Should they suddenly leave the role, you will be left scrambling to find someone with the right skills to come in and familiarise themselves with your accounts as quickly as possible.

When outsourcing, you won’t have to worry about any of these issues. If one of the employees at the accounting firm is out or leaves suddenly, the work is simply handed off to the next equally qualified expert.

It is understandable why people would feel more comfortable around someone with whom they have a more personal relationship, but ultimately accounting firms need to strike the balance between quantity and quality of service, just like any other business, which means consistently providing the correct numbers on time, every time.

The Risk Of Employee Fraud

The final point is one that not usually a major consideration for most people, even though it unfortunately should be. Unfortunately, research how shown that between 22 & 28% of businesses are victims of employee fraud, with small businesses being the most likely to be affected. And the longer an employee has been with a company, the more likely they are to commit fraud, and the greater the size of the fraud will be.

The complexity of the process can make it easy for someone who knows what they’re doing to hide fraud from someone who doesn’t, which is why such fraud generally goes undetected for an average of 16 months. Such instances of fraud are far less common when the work is outsourced, not only because there is increased expert oversight, but also because their entire business would fall should they be shown to be inherently untrustworthy at executing their job.


As with most choices in business, there are pros and cons to both in-house accounting, and outsourcing. You will have to assess your own needs to decide which option is best for you, but for the majority of small-to-medium sized businesses, effectively carrying out this work in-house requires too many resources and carries too many risks, making outsourcing a far more reliable and cost-effective method for most.

What Exactly Does A Bookkeeper Do?

If you have recently established your own business, or are thinking of doing so, there are a lot of obstacles that need to be dealt with in terms of finance. Registering with the Revenue Commission & Companies Registration Office, establishing a business bank account, finding investors, and ensuring that you understand what can or cannot be done with your business’s finances.

The last thing any new entrepreneur wants is to be caught out on financial discrepancies, especially if they are truly unintentional, as these can lead to fines, settlements, the seizure of assets, liquidation, or even jail time.

As the legal system is so complex, most people will choose to avail of professional services, such as a corporate lawyer or business accountant, in order to guarantee that everything is done correctly. Once the business is up and running, most of these services are only required sporadically, but one service you might hear about more often than others is bookkeeping.

When done well, bookkeeping should be an ongoing, even daily, process. While some people may choose to do their own bookkeeping, especially in the beginning as a money saving measure, most businesses stand to benefit from the use of a dedicated bookkeeper. But what exactly does a bookkeeper do?

A bookkeeper keeps tabs on all transactions

The primary responsibility of a bookkeeper is to keep track of every single financial transaction within a business. Bookkeepers are required to compile a complete record of all money that moves through a business in a general ledger, which is ultimately the book that they are keeping. This means that they are responsible for recording all revenue taken in by the business, as well as all costs incurred by the business.

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“A good bookkeeper should be able to detail where every cent that has the business has ever had came from and went to.”

But there is more to the role of a bookkeeper than just collecting all of the data and keeping it in one place. They are also responsible for making sure that each one of these transactions is placed in the appropriate category. An amateur bookkeeper may oversimplify this, classifying transactions as either an expense or revenue. While every financial transaction will ultimately fall into one of these two categories, that is simply not detailed or organised enough for record keeping.

Alternatively, an amateur bookkeeper may misgroup certain transactions based on their own train of thought, and not in a way that best fits the realities of financial reporting. For example, a small business owner doing their own bookkeeping may want a sum total of how much they spend on insurance, and may lump car insurance in with general liability insurance and employee health insurance.

Although these are all forms of insurance, in the world of professional bookkeeping, they are completely unrelated, and would be categorised as travel, operational, and employee benefit expenses respectively. Proper categorisation is crucial in avoiding a situation where the wrong rate of tax is applied to an expense, or possible deductions are missed.

In terms of their actual workload, bookkeepers are expected to calculate total revenue by adding up all receipts and tracking accounts receivable, ensuring that any money owed to the business is received on time. At the same time, they are tasked with tracking accounts payable, ensuring that any debts a business owes are paid in a timely fashion. They may also place and pay for purchase orders, draw up and issue invoices, and monitor the hours worked by employees to handle payroll.

Understanding what it isnt

In order to fully understand what the role of a bookkeeper is, it is important to understand what it is not. Although their work may appear similar from an outsider’s perspective, bookkeepers should not be confused with accountants or auditors.

For most people, the word “auditor” has some pretty negative connotations associated with it. While many larger companies will choose to use internal auditors to improve the efficiency of their operations and minimise risks, most auditors you will encounter in business will be conducting a review on behalf of either the government or investors.

In the hierarchy of these easily-confused jobs, an auditor is essentially the top of the pyramid. The “book” stops with them, as it is their job to search for any mistakes (or misrepresentations) made by bookkeepers or accountants, identify the true financial health of a business, and sign off on it.

Bookkeepers Gather The Required Data

While many people who do their own bookkeeping will also analyse and interpret the data themselves, especially now that bookkeeping software makes it so easy, that is typically the role of an accountant. A professional bookkeeper’s job is to collect and organise all the data available, before handing it over to an accountant to interpret and translate into simple, practical terms that can be used to make business decisions.

Accountants Review Info Provided By Bookkeepers

Accountants assess the financial health of a business and convey this to the owners and management by summarising the information and drawing up financial statements. At the same time, they are tasked with reviewing the information provided to them by the bookkeeper, to ensure that all the correct procedures have been followed, and identify any mistakes. 


The role of a bookkeeper is a very important one to any business. They are the ones who collect and organise the data upon which other members of the business will base their decisions. In the same way that a laboratory receiving the wrong samples will make their findings null and void, a bookkeeper providing incorrect or incomplete information will have a trickle-up effect that could have massive ramifications and seriously hinder a business’s prospects of success. In the business world’s neverending fight for customers, bookkeepers are your boots on the ground, and their impact should not be underestimated.


How To Get The Most Value From Your Bookkeeper And Accountant

They say there are 10 types of people in the world: those who can read binary, and those who can’t. Whether you get the joke or not, the fact is that for most of us, maths is never fun or easy to understand. It is usually a difficult chore. This is a large part of the reason that so many business owners choose to outsource their bookkeeping and accounting services. Even if you are one of the more mathematically-minded people, these are thankless, complicated, and time-consuming tasks with a lot of different moving parts, so most people will be happy to hand them over to someone else.

There are a lot of advantages to having access to expert knowledge when it comes to the financial side of your business. While your first instinct may be joy that you don’t have to spend hours every week adding up your costs and expenses, a good financial professional can offer a lot more than just carrying out the menial tasks of addition and subtraction, so here are some tips in how to get the most value from your bookkeeper and accountant.

Seek an Unbiased Opinion

If you are a small to medium-sized business, you are not likely to have a dedicated bookkeeper or accountant on-site, as the volume of work simply won’t be there. You are much more likely to hire an external service, and although you might be inclined to think that being closer to the business is better, it can be a real advantage in having someone who is one step removed involved.

Having someone who is inextricably linked to the business means that they are closer to the business, and the people who work within it. It is easier for their judgement to be clouded by the passion they feel from the team on the ground, or their perceived experiences that business is getting better, it just needs more time.

They are also less likely to confront you with negative opinions or harsh realities if they have a close personal relationship with you. And if the finances are being looked after by just one of several business partners, there is always a risk that they will distort the truth, or even just be suspected of doing so.

Having someone who is no only an expert in their field, but an unbiased one when it comes to your business, eliminates these problems. They can tell you when things aren’t working or when the numbers just don’t add up, and the risk of manipulation for personal gain is greatly reduced.

Cut Costs

Many small business owners, especially those who are just starting out, see keeping their own books as a way to save money. This is a reasonable technique, especially at the beginning when the volume of transactions is low, but as the business progresses, a professional can help you cut costs in a lot of different ways. One of the main problems with running your own business is that you get used to doing what you do, and you may be unaware that there are better ways to do it.

This can apply to things like taxes, where you may not be taking advantage of all the relief or schemes available to you, as well as your employment structure, where you may be better of hiring a contractor rather than a part-time employee, for example. But then there are also the day-to-day operations to which you may have become blind.

You may be leasing a piece of equipment that isn’t giving you a return, or be devoting your time and resources equally to different sides of the business, even though one is stagnant, while the other has the potential for exponential growth. An accountant will constantly be monitoring these trends, looking for ways to save money wherever possible, so even though you’re paying them, you’ll often save more than you spend.

Get Inside Information

Another disadvantage of taking care of your own finances is that you probably haven’t seen the finances of any other business in great detail. These severely limits your experience and means that, no matter how well you may know your chosen field, you have no benchmark by which to measure the success of your business.

No accountant or bookkeeper is going to show you the behind-the-scenes of another business, but unless you are in a particularly niche sector, outsourcing these jobs means you are likely to get someone who has experience in that area.

Through their experience of crunching the numbers for different businesses in the same field, they will get an invaluable sense for what is normal, what is a red flag, and the kind of changes you can implement to have a big impact on the trajectory of your business.

If they have been doing this for years, they can also open a lot of doors in terms of accessing other reliable professionals that can help you take your business to the next level. You may be employing them to do your numbers for you, but don’t forget that they know a lot more than that.

Improve Cash Flow

Running a successful business isn’t just about bringing in more than you send out. The timing of when your money comes in or goes out also has a big impact on your ability to run your business successfully. Keeping track of when your bills, invoices, loan repayments, and payroll need to paid can be a lot to manage, and it is quite easy to forget something.

Not only are both bookkeepers and accountants less likely to overlook payments due to be received or settled, they are experts at arranging them in the best way possible. As we have noted before, cash flow is one of the main concerns for a lot of Irish SMEs, with half being forced to lay off employees as a result of late payments.

An accountant or bookkeeper can help you arrange your accounts payable and accounts receivable in such a way that you have a steady flow of cash moving in and out. This not only allows the day-to-day operations of your business to run smoother, it can also affect your reputation and credit rating, which have a material impact on your ability to do business.


There are few people in the world that see taking care of their finances as a fun or easy task, so most people are happy to hand it off to someone else at the earliest opportunity. But when hiring a professional, remember that that’s what they are: a professional. You’re not hiring them to do the same job you were, you’re hiring them to do a better one.

They have devoted their working lives to this field, and they will undoubtedly have more insight and knowledge than you. So seek their advice as much as possible, and take it on board. Never stop asking how you can improve your numbers and your business, and you will quickly find that it becomes a lot easier to do so.

The Most Common Mistakes People Make When It Comes To Bookkeeping

The Most Common Mistakes When It Comes To Bookkeeping

When starting a new business, a lot of entrepreneurs choose to do their own bookkeeping, at least in the beginning. Although this is usually done as a money saving measure, it is always a good idea to familiarise yourself with as many aspects of the business as possible. If you choose to take on a bookkeeper further down the line, you will have a much better understanding of the skillsets they should have, as well as an improved ability to spot any discrepancies or mistakes they may make.

While doing your own bookkeeping can have its advantages, it can also be a complex and time-consuming task. Unfortunately, making even a small mistake when it comes to money can have enormous logistical and legal ramifications, and can put your business at serious risk. To help avoid this, we’re going to look at some of the most common mistakes people make when it comes to bookkeeping.


Using Your Business Account For Your Personal Expenses

The cardinal sin of bookkeeping is using your business account for personal expenses. From a purely practical point of view, this just creates more work for yourself later on. Any personal expenses that are charged to your business account need to be recorded as an owner’s draw rather than an expense, or simply reimbursed to the business account. While it is not the end of the world if you accidentally use your business card rather than your personal card, it will take more time to balance your books if you do it regularly, and will skew any analytics you may perform. Furthermore, if you ever get audited, mixing your personal and business expenses is not a good look.

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Incomplete Records

From your own perspective as a business owner, the only thing worse than muddied records is no record at all. Absolutely every expense, no matter how small, should be recorded. It may seem as though including receipts for small amounts is creating more work than it is worth, but these small amounts add up over time. Omitting them will not only lead to a situation where your expenses appear lower than they truly are, which will impact your analytics and decision-making, but will also make it seem as though some of your cash has simply vanished. Once again, this could reflect badly on you in an audit, as it may appear that you or another staff member is slowly siphoning money from the business. Everything, right down to the amount of money in your petty-cash, should be recorded.

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Improper Categorisation

Bookkeeping may be a legal requirement in order for you to ensure you are paying the right amount of tax, making the appropriate deductions, and so on, but there’s no need to view bookkeeping as nothing more than a necessary evil. When done right, bookkeeping can be one of the most powerful assets in your business arsenal. A comprehensive and properly categorised ledger allows you to identify both positive and negative trends, and make well-informed decisions as to how you should handle your business moving forward. A large part of this is about ensuring that your expenses are properly categorised.

To use a simple example, classifying legal fees as wages rather than professional services will cause your wage expenses to appear artificially inflated, which upon review could make it appear as though you are overstaffed, when you are not. By clearly and properly categorising your expenses, you will paint a clearer picture of the true state of your business for yourself, and ultimately make better decisions.

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Failure to Reconcile

Let’s face it: regulations and expectations surrounding business finance are, and always will be, complicated. Even a good bookkeeper with a well-maintained ledger will occasionally make mistakes. That is why, as unappealing as it may be, it is important to reconcile your records with your bank account. Doing this regularly, such as on a monthly basis, can help you identify any inconsistencies, and address them before they repeat or become a major problem.

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Not Creating Backups

The point of bookkeeping is to keep a record of all transactions in one place, which can serve as the go-to reference point for any financial queries. But this often leads to a mentality that there is one book or file that is the be-all and end-all of your records, while the rest of the documentation is stored somewhere else, or simply discarded. The risk here is that if that book or file goes missing without a backup, it can wreak havoc on your business. In this day and age, there is no excuse for not having several backups.

There are lots of free services such as DropBox and Google Drive where business owners can safely store files for free, eliminating the risk of losing files if your computer is stolen or breaks down. You should also take the time to photograph the pages in your physical ledger, and email them to yourself, as well as printing off another hard copy and storing it off-site.

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Overlooking Deductions & Incentives

One of the biggest disadvantages of doing your own bookkeeping is that you will not be as well-informed on all the money saving possibilities as a professional bookkeeper. This inevitably leads to a situation where people are not taking advantage of all the deductions, tax credits, schemes, incentives, and reimbursements for which they are eligible. These are often more than just small savings here and there, and they certainly add up over time, which not only costs the business money, but the owner as well.

Confusing Transfers with Revenue

This mistake applies particularly to people who use bookkeeping software, as most of these products will see any cash that lands in your account as income. The software then automatically classifies these as such, and since they usually provide the user with analytics, things can get distorted quite quickly. Usually you can easily reclassify these and nip this issue in the bud, but if you’re not aware of the issue, it can cause problems further down the line.


Bookkeeping is not an easy or enjoyable process, but it is a extremely important one. All of the mistakes listed above can easily be made by intelligent, well-meaning individuals who are simply overwhelmed by all the different aspects of the tasks. Familiarising yourself with the bookkeeping process is a good idea, and can be very helpful in the early days of a new business, but once you find your footing, engaging the services of a professional bookkeeper is an investment that is definitely worth considering.

5 Unmissable Tips That Will Make A HUGE Difference For Your Bookkeeping

Bookkeeping can be a complicated process, but it is also an extremely important one. Every business in the world ultimately boils down to financial management, and whether or not you are taking in more money than you are spending. But achieving a profit is about a lot more than just selling good stock at the right margins. Your bottom line is affected by a myriad of factors, such as stock, price, overhead costs, interest on loans, wages, taxes, and much, much more. Bookkeeping is often seen as a relatively straightforward task that is simply time-consuming, but the truth is people are frequently surprised by its complexity, and the curveballs it can throw. Since it is fundamental to the success of your business, here are 5 tips that will help you improve your bookkeeping.

1: Categorise Appropriately

A good bookkeeper should record every single financial transaction within a business, regardless of their size. This means tracking all income, and all expenses, but it does not mean you should just track them together. Ideally, you should be keeping three separate books: one for revenue, one for expenses, and one for both. Recording all transactions in a purely chronological order can be a useful tool if there are any discrepancies in your numbers, but most of the time it just makes it more difficult to calculate your total revenue and expenses, and makes it more likely that you will make a mistake. Having three separate books make it easier to calculate your totals, and gives you a reference to make sure everything has been calculated correctly.

At the same time, you need to ensure that you are using the correct subcategories in your books. Wages and utilities are both forms of expenses, for example. But many businesses will find that their wage bills will fluctuate dramatically depending on the day of the week or time of year. Your utility bills, on the other hand, will remain relatively static by comparison; the lights will still be switched on whether you have one member of staff on shift, or ten. Lumping these expenses together will reduce the statistical significance of these fluctuations, and will make it harder to identify any negative trends, such as being overstaffed.

2: Reconcile Your Records

Keeping three separate books is a great way to double check that your numbers are correct when all the additions and subtractions have been taken into account. But no matter how careful or mathematically minded you may be, it is inevitable that you will make some mistakes. Your books are an extremely important resource in terms of both the law and business planning, but at the end of the day, what matters most is the money sitting in your account. Regularly reconciling your books with your bank statements is crucial to ensuring that the records you are working with reflect the reality of your financial situation. Whether you have mistakenly recorded an invoice as paid, or failed to take into account a recurring direct debit charge, there will be inconsistencies between your books and your statements. The longer you go without reconciling the two, the harder these mistakes will be to identify, so you should be doing this once a month at the very least.

3: Back Up Everything (Including Your Backups!)

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As we may have already mentioned, proper bookkeeping is essential to ensuring the success of your business. But even if you have the most beautiful, well-kept records in the world, they don’t mean a thing if you can’t find them. Misplacing a single invoice can be pretty inconvenient, as you may forget to collect money you are owed, or suddenly get hit with a forgotten bill. Losing your general ledger can be absolutely detrimental to your business, and could land you in a lot of legal trouble.

In this day and age, there is absolutely no excuse for not having these records backed up. Services like DropBox or Google Drive will allow you to store files online for free, while apps like Expensify allow you to photograph receipts and invoices so you can create digital copies of physical invoices. These can then be easily accessed in one place, and can also be inserted directly into most forms of bookkeeping software. Getting into the habit of doing this every time you send or receive a new invoice is an easy but extremely effective way to reduce the risk of mistakes.

4: Don’t Confuse Transfers, Payments, and Loans

Despite the fact that transfers, payments, and loans all amount to cash in the bank, these three things will affect your business in very different ways. Payments are the most straightforward, as this is money you are owed, have received, and can spend as you like. All you need to do is remember that it will be taxed.

The main risk with transfers is that they can lead to situations where a payment is added twice, especially if you are using bookkeeping software. If a client pays through an online service such as PayPal, you may record the invoice as paid. But when you transfer it to your account, most software will automatically classify it as income, rather than a transfer, and this needs to be changed manually. Failure to do so can create serious discrepancies in your accounts, especially if you allow the funds to build up before being transferred, or make the transfer in a different month.

The problem with loans is that they can make your financial situation appear healthier than it is at a glance. Although a loan is cash that you are free to spend however you like, it is simultaneously an expense that is growing all the time as a result of the interest attached. Failing to recognise this distinction not only misrepresents the financial health of your business, it leaves you exposed to additional expenses.

5: Seek Professional Advice

Many entrepreneurs who are just starting out in business, or are running a small operation, will choose to do their own bookkeeping in the beginning. This is usually seen as a way to cut costs while the business finds its feet, although it can also be an educational experience. When you have a reasonable grasp of bookkeeping, you can communicate more effectively with financial professionals. But the fact is that the subject matter is extremely complex, which is why people train for years to do these jobs.

Not only should you seek professional advice early on to make sure you are going in the right direction, a bookkeeper should be one of your first investments when you can afford it. Hiring a bookkeeper will save you a lot of time, and probably a good bit of money too. They will help reign in any unnecessary costs, ensure you are paying the correct tax rates on everything, steer clear of any legal issues of which you may be unaware, and reduce your risk of being hit with unexpected costs. While paying them may appear to be an expense on paper, the time, money, and uncertainty saved is well worth the investment.


Bookkeeping is far from the most enthralling aspect of running a business, but it is one of the most important. Improper bookkeeping places the viability of your business at serious risk, you should recognise that hiring a bookkeeper is hopefully inevitable, as the workload becomes too large and complex for you to handle with a reasonable amount of reliability. The fact is that bookkeeping is, and always will be, a complicated process, and if there is one area of business where you definitely want to minimise the risk of mistakes, it’s your finances.


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Managing Customer Invoicing Payment Behaviour: The good, the bad and the ugly

Effective invoicing & cash flow management is fundamental to the success of any business, and arguably the more important half of this is the money you have coming in. Without receiving the money you are due in a timely manner, it becomes impossible for you to pay your own bills, debts, and employees, and your whole operation can fall apart very quickly. Even if you manage to stay afloat by using cash reserves or loans, the impact this has on your output, interest, and credit rating can be very damaging to your business.

Having clear invoice and payment policies and implementing them consistently is crucial to ensuring you maintain as much control over your cash flow as possible. But no matter how clear and consistent you may be, you will always encounter customers who have varying degrees of respect for your policies. Below, we examine the good, the bad, and the ugly customers you are likely to encounter through your invoicing process, and advise you on how to approach each one.

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The Good

“The Good” customers are those who pay their invoices on time, early, or instantly. Needless to say, these are the most desirable customers to have. Having a reliable idea of how much money you can expect to get in and when makes it much easier to manage your cash flow and ensure that you can pay your own expenses on time. This is especially true if “The Good” is a regular customer, as opposed to one who engages you sporadically or as a once off.

Your top priority with “The Good” customers is to maintain a positive working relationship. There are many aspects to this, from the basics of being friendly and polite, to the more advanced, such as anticipating when they may be interested in a new product or service, or quickly and faithfully resolving any disputes that may arise. With customers like these, even down selling, where you suggest that a cheaper good could help them achieve the same results, can be a good idea, as it establishes a trust that could allay any fears they have about placing a much larger order in the future.

Being considered a part of “The Good” group is a result of a pattern of behaviour, where someone consistently pays on time. Of course, all businesses have their ups and downs, so if one payment is late after many months of on-time payments, it is advisable that you show them some extra leeway, and consider waiving any late fees you may normally charge.

The Bad

As you are no doubt well aware, not everyone you do business with will take it as seriously as you would like. Whether it’s because of unprofessional behaviour or a lack of attention to detail, you will always encounter people who are difficult to work with. In terms of invoicing, “The Bad” are not the worst group, but they are far from perfect, and they can make your job a lot more difficult without really trying, which is often the case.

“The Bad” are probably best described as people who have been hired to pave the road to hell: they have good intentions, but they consistently drop the ball. Usually these are people who mean to pay you, but frequently forget. They are often unresponsive to your correspondence and can be hard to get a hold of, but will ultimately cough up when asked. Still, this can be incredibly disruptive to your cash flow, as you will have a general idea of when you will be paid, but cannot rely upon it.

The best way to deal with “The Bad” customers is to be firm but fair. You want to try and maintain as positive a relationship as possible with these people, but you ideally want the inconsistency to come to an end. If the customer’s order is a recurring one, setting up a direct debit could be a simple solution. If not, you need to make the process of paying as easy for them as possible, as it will increase the likelihood that they do. This means sending out your invoices as soon as possible, providing clear payment policy at the point of purchase, and sending out email reminders. Ideally, these should be sent a few days before payment is due, on the day itself, and a few days after, and if possible, the email should include a link to an online payment portal. If these emails go unacknowledged, they should be followed by a phone call.

If you have clearly indicated in your payment policy that late payments will incur a penalty fee, don’t be afraid to use that as leverage. It is worth considering waiving the first fee, as this will leave the customer with a positive impression rather than a negative one, and gives you firmer ground to stand on if payments are late in future. You could also offer a discount for early payment, but this would need to be available to all customers, and you would need to consider the cost of doing so.

The Ugly

Lastly, we have “The Ugly” customers. These are the people who regularly pay late, are deliberately evasive when you try to get in touch with them, and frequently dispute the amount on their invoices or the quality of the good or service provided. While it is important to look at the trend of your customer’s behaviour, you can usually identify pretty early on if someone is a member of “The Ugly”.

Many of the ways to deal with these customers are the same as dealing with “The Bad” customers: issuing invoices as soon as possible, sending out reminders, and following up with a phone call. With “The Ugly” customers, it is important to be firm when charging late fees, as failure to do so will only give them less of an incentive to pay on time. And while you don’t want to get aggressive, you need to realise that if you don’t chase these people relentlessly, you may never see your money.

In addition to those techniques, you should also try to create as much of a paper trail as possible, as this will help you resolve disputes when they arise. Immediately provide them with a clear summary of their order, and ask them to alert you of any mistakes within a certain timeframe. If none of this works, you can always sell the debt to a collection agency, but only if you are prepared to lose the customer.

Not all customers are created equal, and unfortunately, the good, the bad, and the ugly are all creatures that naturally inhabit the business world, and it is inevitable that you will continue to encounter them all. Identifying who belongs to what group and learning how to deal with each one are skills you will hone throughout the entirety of your career, but the advice laid out above should help you to get off to a good start.


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Do's & Don'ts For Successful Payroll Management

Do's & Don'ts For Successful Payroll Management

Whatever your business may be, payroll is likely to be one of the biggest, if not the biggest, expense. This alone is enough to make most good business owners want to get it exactly right, but payroll management can be stressful for many other reasons as well. It can be a somewhat complicated process, which can cause employers to stress over any potential mistakes or legal issues. And of course, there is the purely human aspect of wanting to ensure that your employees get paid the money they are due. There are many reasons why payroll is important to a business, so here are some of the biggest dos and don’ts of effective payroll management.


1: Do Consider Your Timeline

One of the first things an employee wants to learn once they know how much they will be paid is how often they will be paid. Typically, there are four ways to do this. Weekly pay means an employee will be paid 52 times a year; bi-weekly means they will be paid 26 times; bi-monthly is slightly different, and will result in about 24 payments; and monthly equates to 12 payments.

Regardless of whether an employee is on a fixed wage or an hourly rate, the number of payments will not affect how much they ultimately receive. But while most employees prefer to be paid as often as possible rather than receiving larger amounts less often, this can be more expensive. The costs of printing cheques, paying direct deposit fees, and the time spent calculating how much is due to be paid all increase the more frequently you do it, so you need to consider which frequency is most efficient for your business.

2: Don’t Miscalculate

By definition, a mistake is something you don’t want to make, but while ordering the wrong amount of stock or sending out the wrong order can be inconvenient, payroll mistakes can be very serious. Miscalculating tax can have serious legal repercussions, especially if it is a recurring problem. Overpaying your employees will obviously lead to unnecessary costs and may leave you wondering why your books do not add up. Underpaying your employees on the other hand not only erodes their trust in you as an employer, but can also have major legal and financial repercussions further down the line. For example, a U.S.-based company called West Marine Products underpaid 707 of their employees by a few cents over 5 years. Despite the fact that 88% of these employees were underpaid $50 or less in this period, totalling $18,828, a class-action lawsuit resulted in a payout of $435,000.

3: Do Get Software

One of the best ways to expedite the payroll process and reduce the risk of mistakes is to invest in payroll software. This might not be necessary if you are running a small operation, but if you have more than a handful of employees, it is probably a good investment. In addition to keeping track of various employees and making more accurate calculations faster, payroll software offers a number of other benefits, such as offering an extra layer of security for sensitive personal information, as well as keeping a record of the total annual expenditure.

4: Don’t Invest in an Expensive System

That being said, there is a plethora of payroll software available on the market, and not all of them are created equal. Different products will have different pricing structures, although most will be some sort of subscription model. These prices will reflect the services offered by the software, such as the number of employees you can register, or the number of administrators permitted to access the software. Many will also offer features such as synchronising with your financial modelling software or paying in multiple currencies. There are many features available that your business simply will not require, so shop around, see what features you really need, and try don’t commit to anything longer than 6 months so you can switch or upgrade your subscription if need be.

5: Do Direct Debit

Most of these softwares will have the option of paying your employees by direct debit, which in most cases is preferable to paying by cheque. Apart from eliminating the need to print cheques, direct debit is more reliable, faster, and much more popular with employees, who will have greater control over where their money goes, and won’t have to try to rush to the bank before closing at peak times each week just so they can use the money the already have.

6: Don’t Trust the Software too Much

As helpful as payroll software can be, technology is never perfect. But while a human may notice a mistake made by themselves or someone else, a computer will simply follow its algorithms, and won’t notice if someone is receiving a large payment despite only being in work for a few hours, for example. No matter what software you invest in, its results needs to be examined by human eyes.

7: Do Make a Backup Record

It is also important not to get too complacent with the features offered by your software. They may boast about their security features and backup procedures, but it is your business at stake, and you shouldn’t put total and complete faith in another company to protect it. All it takes is one hack or bug for them to lose lots of your essential data, so be sure to backup all your files, preferably as both a hard copy and on some sort of external hard drive.

8: Don’t Pay Late

Finally, one of the most fundamental aspects of payroll management is making sure you pay people on time. Many employees simply cannot wait an extra few days or even weeks to be paid, and paying late, especially if it is a regular occurence, will erode your relationship with your staff and give you a bad reputation.

In some ways, payroll management is a lot like being a parent: people will rarely notice the long list of things you got right, and are a lot more likely to notice when you get something wrong. It may often seem like a thankless task, but it is an incredibly important one, and successful payroll management can be the thing that makes or breaks a business.

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10 Tips To Keeping A Positive Cash Flow

10 Tips To Keeping A Positive Cash Flow

The term “cash flow” refers to any money that moves in or out of a business. Maintaining a positive cash flow means keeping more money coming in than you have going out. This is essential not only for the end result of making a profit, but also for enabling your business to run on a day-to-day basis. Cash flow is essentially a barometer for the health and success of your business, so here are 10 tips to keeping a positive cash flow.


1 - Track Everything

From the very beginning, you need to get into the habit of knowing exactly where every bit of money related to your business is coming from and going to. One of the most important aspects of making a business successful, particularly a new business, is making sure that it is running efficiently, and this can only be achieved by keeping as close an eye as possible on your finances. This will help you identify your most popular and profitable products, and enable you to make well-informed business decisions based on fact.

Tracking your financial trends rigourously will help prevent negative dips

Tracking your financial trends rigourously will help prevent negative dips

2 - Identify Negative Trends

Another advantage of comprehensive financial monitoring is that it allows you to identify and address any negative trends. Without keeping track of which products or services are selling and which are not, you might get a general idea of what your customers do or do not like, but it will never paint as accurate a picture as numbers on a page. Furthermore, you may find that certain products or services are selling, but are actually running a loss when all things are taken into account, such as storage or delivery costs. Rigorous financial tracking can reveal trends that you otherwise simply would not see.

3 - Test the Bang for your Buck

With all that being said, you should also bear in mind that just because something is not running at a loss does not mean it is running as efficiently as possible. For example, LED bulbs cost about 4 times more than normal light bulbs, which puts many people off buying them. But not only do LED bulbs lower your energy bills, they also last about 15 times longer, and should pay for themselves in about 6 months. Alternatively, you likely use some sort of software in your business, whether that be for mailing, payroll, or EPoSS (electronic point of sale software). There is such a wide variety of options for all of these today that different brands offer different features according to their own pricing structure, and by shopping around, you may find one that is better suited to your needs for a similar or even lower price.

4 - Save Some for a Rainy Day

The term cash flow refers specifically to the movement of your money, but the flow of cash is not as reliable as the flow of the tide. There will be times when you do not have as much money coming in as you normally would, such as unpaid invoices, lost clients, or seasonal lulls. But while you may not always have money flowing in, you will always have money flowing out to things like wages and utility bills. Since these are necessary expenses, without which the business cannot function, you need to build up some sort of rainy day fund to fall back on, or you run the risk of being unable to bring cash in, even when the customers come back.

5 - Use Discounts and Late Fees

Anyone who issues invoices will tell you that getting them paid is a lot harder than you might expect. Even if they are issued to big corporations that can afford them, or people with whom you have a good relationship, you will inevitably find yourself chasing after them on more than one occasion. One way to curtail this is by offering discounts on early payments, and charging fees for those paid late. The ability to save some cash, or the threat of losing some unnecessarily, are surprisingly powerful incentives, and can save you a lot of time, anguish, and inconvenience.


6 - Take Deposits on Large Orders

Receiving a large order is very exciting for any business, but there is always the risk that the order will fall through. If this happens, it can be a devastating blow, which is why it is so important to ask for a deposit upfront on large orders. The obvious advantage to this is that it lessens the damage dealt to your business, but it could also mean that you are able to sell on any stock you may have invested in so far to another client at a discounted rate, or maybe even full price, which will increase your profit margins on that stock. Furthermore, customers are far less likely to drop out of a deal if they have already invested in it, as they will often prefer to get something rather than nothing in return.

Avoid the potential risk of a large order falling through by taking an up front deposit.

Avoid the potential risk of a large order falling through by taking an up front deposit.

7 - Provide Clear Payment Instructions

You should always remember that nobody cares about the money you are owed as much as you do, even if they’re the ones who owe it to you. While a good business owner will always know how much they owe and to who, the reality is that not everyone pays as close attention to this as they should. By providing clear payment instructions, you minimise the risk of people forgetting what they owe or misunderstanding when it is due. Invoices should be issued as soon as possible to allow for any disputes to be resolved early, and email reminders should be sent a few days before, on the day, and a few days after, if necessary.

8 - Reschedule Payment Dates

Whether it’s coming in or going out, cash never really stops flowing through a business. Ideally, you want that flow to be as steady and predictable as possible, and avoid situations where you are hit with a sudden wave of expenses at one part of the month, and a surge of income at another. This could lead to a scenario where you owe a lot of money, but know you won’t have any coming in for several weeks. Arranging your outgoing and incoming payments so that they are spread evenly across the calendar gives you a lot more flexibility and security, and also makes it less likely that you will spend frivolously.

9 - Use Credit Wisely

Although you always want to have some sort of rainy day fund, having a line of business credit to fall back on can be an added layer of security. But credit can be a complex thing, so you want to start thinking about it before you need it. Even if you have cash to burn, paying your expenses with credit and then paying that debt off on time helps you establish a good credit rating. When doing this, your best option is to maintain a low credit utilisation ratio, which means using only a small percentage of what you are entitled to use (ideally under 30%). This demonstrates that you are a responsible spender and reliable debtor, which will make it far easier to increase your maximum limit in the future.

10 - Consider Outsourcing

While all business owners, especially new ones, want to keep their expenses as low as possible, you need to look at this in terms of how much your time is worth. If it takes you the better part of a day to do your own payroll, you have to consider that you could be spending that time bringing more cash into the business. If the amount you could make in sales is far greater than the cost of outsourcing to a payroll company, refusing to do so is simply a short-sighted decision.


Maintaining a positive cash flow is something that will always be at the forefront of a business owner’s mind, but doing so means looking at a lot more than just the bottom line. Although profit is the ultimate goal, this can only be achieved by looking at the day-to-day decisions you make. In the end, there are countless factors that can affect your cash flow, but the topics laid out above are some of the most impactful, and remembering these will make it a lot easier for you to achieve a positive cash flow.

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5 Reasons Why Your Small Business Needs A Good Bookkeeper

Every small business should have a good bookkeeper.

If you run a small business, particularly one that is just getting started, your finances will be at the forefront of your mind. You will likely have a plan for every penny in your pocket, and will be doing everything to keep costs as low as possible. For these reasons, you may think that hiring a good bookkeeper is a luxury for further down the road, when really it could be a factor that makes or breaks your business. Below are five reasons your small business needs a bookkeeper.


Bookkeeping takes considerable time and effort

Even if you’re a mathematical whizz who got straight As in school, bookkeeping takes a huge amount of time and effort to do properly. Money is coming in and out of every direction, and it quickly becomes very easy to lose track of things. Trying to keep on top of it when there are a million other aspects of your business calling out for attention is a difficult thing to do, and then there come the moments when you realise the final tally doesn’t add up, and you have to go through everything again to find where it all went wrong. In the end, bookkeeping is a black hole that will literally devour your time and pull you away from other tasks.

Handling Payments with Consistency Is Key

When getting started out in business, it’s not unusual for there to be a little bit of disarray, and many suppliers will be somewhat forgiving of this. To a point. But if you are constantly paying late and allowing bills to stack up, people begin to lose their patience rather quickly. More importantly, if you are sending out invoices inconsistently, your incoming cash flow will be inconsistent, which means your outgoing payments will be too. If you don’t know how much money you’re going to need and have at any given point, you may suddenly find yourself unable to replace stock, because your outstanding bills are so high, even if your customers have assured you that their cheque is in the mail. All businesses ultimately boil down to finance, and this level of inconsistency and uncertainty will ultimately come back to haunt you.

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Bookkeeping helps to set targets towards running your business smoothly

If this is your first business, you will be familiar with the fear you feel when you lock the doors after an abysmal day of trading. That same mindset can put dollar signs in your eyes when you suddenly have a day that goes much better than expected, but it’s important not to lose the forest for the trees. One day of doing twice as good as expected is not enough to cancel out three days of weak sales. With proper bookkeeping, you’ll know how much you need to bring in to keep the doors open, not just in a day, week, or month, but all year round. Without a firm target in your sights, it is easy to think things are going a lot better than they are until it all comes crashing down.

A bookkeeper will provide Neutral, Expert Advice

When you hire a bookkeeper, you should remember that you are not just their employer, you are their customer. They want you to keep bringing in cash, because that means they will too. They may not feel the same love and passion for your business as you do, but that also means they won’t be as blinded by fear when things get tough, and will be able to assess the situation in a more logical manner. Furthermore, while this may be your maiden voyage, they will have navigated troubled waters before, and the benefit of that experience is invaluable when it comes to course-correction. The bottom line of your business is your bottom line, so if there is one area where you want logical, expert advice, this is it.

Complexity

The business world is not just complex because of things like calculating profit margins or estimating supply and demand. Whether they come from the Irish government, the EU, or the WTO, regulations abound, and there will be countless challenges, expenses, and blockades that you never would have considered. Similarly, there will be advantages, incentives, breaks, and aid that you may never find on your own. With so much to think of already, a firm and accurate grasp of the legal systems in which you operate is not something you will pick up overnight, but a simple, honest mistake can wreak havoc on your ability to operate. Rather than trying to figure things out as you go, hiring a bookkeeper and learning through observation will serve you best in the long run.


For many new entrepreneurs, hiring a bookkeeper may not seem like the most pressing issue. Most are fired up about their new business, and are trying to do everything they can to make it work. But doing everything you can does not mean doing everything yourself. It may appear that holding off on a bookkeeper is keeping costs down for now, but it is only when you see the cost-benefit analysis in action that you’ll realise how much bang you are truly getting for your bookkeeper.

5 Things That Contractors Starting Out Should Know About From A Financial Perspective

Some things to consider as a start up contractor from a financial perspective.

In just the past few years, the nature of work has undergone a dramatic transformation. While contractors and freelancers have existed for a long time, technological advancements mean that an increasing number of people are drawn to the idea of being their own boss.


Like starting a new job, becoming a contractor can be an intimidating experience. But when you do become a contractor, you have a lot more to worry about than making new friends or meeting sales targets. There are many advantages to contract work, but the financial side of things is very different to that of a traditional 9-5 job, so here are 5 things that start out contractors should know from a financial perspective.

Be Prepared For Financial ups & Downs.

One of the most obvious qualities of contract work is that you won’t have a steady income. Your income one month will be totally different to the months behind and ahead of it, particularly when you are just getting started. Even if you have a few different jobs lined up for the near future, or the promise of regular work, nothing is guaranteed when you are a contractor.

For this reason, it is important to plan ahead, to have some cash you can fall back on, and to be prudent with your spending while you get a feel for your cash flow. Ideally there should be some overlap between the job you are leaving and the contract work you do, so you can make an informed decision about when to take the leap and fully immerse yourself in contract work.

Consider your Pay Rate

If only out of curiosity, most of us have calculated how much we earn per hour. When you become a contractor, this figure can suddenly seem to jump dramatically. While most companies don’t mind paying a higher amount to contractors, because it’s still cheaper than hiring a full-time employee, you need to remember that the per-hour wage is not as scalable for contractors as it is for full-time employees.

Even if you get paid €100 for an hour’s work, you’re not going to fill 40 hours with that rate, and certainly not at the beginning, so don’t expect to be taking home €4,000 a week in the near future. There will always be 168 hours in a week, but there won’t always be 40 hours of work, so you have to stretch whatever you take in.

Be Confident in the value of your work

New contractors often feel awkward when it comes to putting down a price for their work. Many people will be afraid that charging X amount for Y hours will make them look arrogant, or unrealistic. Furthermore, there is a fear that no matter what number you put down, someone else will be willing to do it for less, which drives many people to undervalue their work. Ironically, this can sometimes cost people business, as a lack of confidence can make it seem like the quality of your work is not as high as your competition, and a business may be willing to fork out a little more if they think the result will be better.

This is a hurdle all new contractors must overcome. One of the best ways to do so is to join an online group and ask others how they arrive at their own valuations. There will be plenty of people online with the first-hand experience to know what works, and since most of them won’t be your direct competition, you can get some truly great advice for your specific field.

The Lack of security as a contractor

For all the advantages of contract work, one of the biggest disadvantages is a lack of security. While a person in full-time employment may be entitled to paid annual leave or sick days, contractors enjoy no such benefits, and only get paid when they actually hand over work. For this reason, it is important that you put aside a portion of every pay cheque, no matter how small.

You need this rainy day fund to tap into, because further down the line, whether you simply want some time off or find yourself unable to work, there will come a time when there is no money coming in.

Self Employement and taxes

In order to keep everything above board and avoid incurring penalties further down the line, it is important to register as a self-employed person from the get-go. This can be a little daunting, as people fear running afoul of the tax man, so it may be in your best interests to get some advice from an accountant, or someone who has already been through the process.

The good news is that there are advantages to being self employed with regards to tax, such as a reduced USC rate, and an earned income tax credit for self-employed people that is set to rise from €1,150 to €1,350 in Budget 2019. Making sure you take advantage of all the benefits available to you is another reason to seek expert advice, at least in the beginning.

Entering the world of contract work can seem scary and complex at times, but it can be an attractive alternative to working for someone else. There will be risks and challenges involved, but if you plan properly and do things right, contract work can offer you a tremendous amount of freedom and satisfaction, as well as a high quality of life.

If you would like to discuss anything from this article or have any other questions relating to working as a contractor, get in touch with us today and we’ll be happy to advise you.

Signs of a brilliant bookkeeper

Good bookkeepers are as frequent as rain in Ireland but a truly great bookkeepers are as rare as a week of sunshine. As a business owner you need to recognise the impact a bookkeeper can have on your business Being so rare it’s difficult to hunt a great bookkeeper down but here are some tips on how to know one when you see one.

 

Educate Themselves On Your Business Needs

Great bookkeepers take the time to adapt to your business and understand how you operate so they can make sure that the processes are as simple and efficient as possible. They will be able to identify opportunities for your business to be more organised, labour-saving and efficient.

Excellent Communication Skills


Great bookkeepers are great communicators they are able to explain complex ideas in easy-to-understand ways, if your bookkeeper regularly uses accounting and bookkeeping jargon, the conversations you have will feel restricted and unproductive. Look for someone who’s willing to communicate key concepts at a pace you’re comfortable with, and don’t be afraid to ask questions!

Experience In Your Particular Industry

What may seem like a good bookkeeper to most could be a great bookkeeper in your industry. Working with a bookkeeper who has expertise in Legal bookkeeping would be very different than working with one who has experience with retail. Specialised bookkeepers can provide reports on how your business is performing month-to-month, and have an idea of what success metrics look like in your industry.

Evolve With The Industry

A sign of a really great bookkeeper is one who is up to date on what is happening in the bookkeeping, accounting and technology spaces. The bookkeeping and accounting industries have evolved considerably over the past few years due to changing technologies. When bookkeepers utilize the latest business software and technologies, it shows that they’re committed to increasing efficiency and providing a more robust service. Great bookkeepers should be explaining to you and encouraging you to use technology to save time and money by automating processes with cloud accounting packages.

Are Trustworthy

Finally, the relationship between a client and a bookkeeper is sacred. Most people won’t share their financial details with friends or even family, so it is important when picking a bookkeeper that it is one you can trust. Great bookkeepers are transparent with things like billing and pricing, they’re responsive and you never have to question what kind of value they’re adding to your business, you are one of the lucky ones that have a great bookkeeper.

How "PAYE Modernisation" will affect Employees and Employers?

In 1960 Revenue introduced the PAYE system. This system was designed for employees and employers to have the most accurate, up to date information relating to pay and tax deductions. Ensuring the right tax deductions are made by the right individuals at the right times, improves the accuracy, understanding and transparency for all the stakeholders. This version of the PAYE system has been used for the past 60 years but for not much longer…

On the 1st of January 2019, the PAYE system will get a long overdue update to evolve with the times. For example, people switch job more regularly and changes in personal circumstances   ( i.e marital status) are much more common compared to when PAYE System originally launched

Now you are probably wondering what do these changes mean for me. Don’t worry, this update will benefit both employers and employees.

 

For Employees

Before the start of the tax year, an online statement will be sent detailing your tax credits and standard cut-off points for the upcoming year. This will be based on estimated income and information available to Revenue for the employee. Employees will be prompted to make any necessary adjustments to or to update this online statement, including claiming any additional entitlements. This contrasts with the current system where the employee must wait until the end of the year for such reconciliation and wait for any refund or be faced with a tax underpayment.

For Employers

This update will have changes on how employers pay their employees. When processing payroll, a file must be submitted (electronically) to Revenue containing details of employee payments. The contents of this file will be like the details currently submitted in the annual P35, but unlike the P35 this file must be submitted each pay period e.g. weekly or monthly.

The update enables employers to submit a new employee’s detail before they start employment their details. This allows the final payroll run in the year will generate a pre-populated statement setting out the total tax deductions for the year both at the level of the employer and the employee. This, in turn, should reduce incidences of year end over/underpayments of income tax.

This new reporting process by employers to Revenue is anticipated to be fully integrated into the employer’s payroll run and will result in a significant modernisation of business processes and reduce the administrative cost for employers.

To discuss these changes further Contact us