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The Art of Book-keeping – Part 6

August 4, 2009 in Basic Skills

The Financial Year End.  Each and every Limited Company trades for a period of One Year, this can be of 12 Calendar months or 13 ‘Lunar’ Months, a ‘Lunar’ Month consists of Four weeks only, at the end of which it has to present a ‘Set of Accounts’ to H.M.R.C. and Companies House.  As an employee you will have to prepare your ‘Final Accounts’, or assist in their preparation, from the balances shown in your Trial Balance.  From this point on if you make any mistakes you need backtrack only to the ‘Trial Balance’.

The Profit and Loss Account includes such items such as ‘Sales’, ‘Purchases’ and ‘Direct Expenses’ such as Promotional and Miscellaneous Expense are shown in one part whilst the second part bears the Overheads such as Licence Fees, Motor Expenses, Printing & Stationery and Postage & Telephones to name a few.  The sum arrived at by deducting Purchases & Direct Expenses from your Sales income would form a Sub Total to which would be added to, or subtracted from, the total of the ‘Overheads’ to give you a nett Balance on your Profit & Loss Account.

The Balance Sheet is the Final Account to be drawn up for the Year End.  It consists of your ‘Fixed Assets’ such as ‘Office Equipment’, ‘Furniture & Fittings’, ‘Motor Vehicles’ where they are the Property of the Company, to name a few and the respective Depreciation Accounts.  To these are added your ‘Current Assets’ such as your ‘Debtors’, ‘Bank Account’ and ‘VAT Liability’ and the sum total of these two categories becomes your ‘Total Assets.  The next sum would be ‘Current Assets less Current Liabilities’ which is deducted from, or added to, your ‘Total Assets’ and is shown as ‘Total Assets less Current Liabilities’.  To Balance your ‘Total Assets Less Current Liabilities’ you need to show on the opposing side of your Balance Sheet the figure you have for ‘Reserves’ plus ‘Profit & Loss Account’ which is the Balance of that Account within the Nominal Ledger.

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The Art of Book-keeping – Part 5

August 4, 2009 in Basic Skills

The Nominal Ledger.  This is a collection of individual accounts in which the Income and Expense, including the Operating Costs, of the Company are recorded and which provides an overview of the activity of the Business.  It is also from this Ledger that the Trial Balance and the Final Accounts of the Company are prepared with one set being sent to Her Majesty’s Revenue & Customs and a second set to Companies House.  The term ‘Final Accounts’ refers to ‘The Trading and Profit and Loss Account’ and ‘The Balance Sheet’, it is these which are sent to H.M.R.C. and Companies House and is a requirement of Law.

In the ‘Month-end’ Accounts regarding the Nominal Ledger all entries are posted to it by a Journal Voucher.  This entails going through each ‘Day Book’ and Cash Book and completing the Journal Voucher by entering on to it the Totals of each column or, in the case of the ‘Sundries’ column, the individual amounts against their Nominal Code numbers and ‘posting’ these entries to the Nominal Ledger account.  Sample vouchers are shown below:-

Journal Voucher:- 12/01   Date:31.12.06  
A/c Number Description Posted by Debit Credit
2100 Purchase Ledger Control      £     2,000.00
2200 V.A.T. Control Account    £       250.00  
0030 Office Equipment    £       400.00  
7500 Postage    £         25.00  
7501 Phones    £       300.00  
7504 Stationery    £       125.00  
6200 Advertising    £       500.00  
7800 Cleaning & Heating    £       400.00  
  Totals    £     2,000.00  £     2,000.00

This Journal Voucher covers items taken from the Purchase Day Book.

Journal Voucher:- 12/02   Date:31.12.06  
A/c Number Description Posted by Debit Credit
1100 Sales Ledger Control   £6500.00  
2200 V.A.T. Control Account     £960.00
6200 Display Equipment     £5540.00
  Totals   £6500.00 £6500.00

 Whilst this one relates to the Sales Day Book

Journal Voucher:- 12/03   Date:31.12.06  
A/c Number Description Posted by Debit Credit
 1200  Total Receipts    £   12,000.00  
 1100  Sales Ledger Control      £   12,000.00
 1200  Total Payments      £     5,000.00
 2200  V.A.T. Control Account – Payment    £       500.00  
 0030  Office Equipment    £     3,500.00  
 7100  Office Rent    £     1,000.00  
   Totals    £   17,000.00  £   17,000.00

This Journal deals with the items in the Cash Book

Journal Voucher:- 12/04   Date: 31.12.06  
A/c Number Description Posted by Debit Credit
1230 Petty Cash Control      £         76.38
2200 V.A.T. Control    £         11.38  
7510 Stationery    £         25.00  
7500 Postage    £           5.00  
6100 Copying    £         35.00  
  Totals    £         76.38  £         76.38

And finally, this covers the Petty Cash Book expense.

There may be other Journal Vouchers you may need to raise, for instance – Depreciation, and that may well cover more than one account in the Nominal, then there may be Pre-payments which require a Journal Voucher.

 When all the Journal Vouchers have been ‘posted’ to the Nominal Ledger you then go through this Ledger balancing each individual account or ‘Ruling off’ where there is no balance.

Once you have finally balanced each and every Account in the Nominal Ledger you then have to prepare a Trial Balance – I should add here that when I had to produce ‘Month End Accounts’ the Trial Balance was the final point.  This is a List of the Balances extracted, by Account number and Name, and listed as a schedule showing the Debit Balances in the left-hand monetary column with the Credit Balances shown in the right-hand column.

The Totals of both the Debit and Credit Columns MUST be the same – if not, you have then to begin checking all your entries from the beginning in order to find the mistake.  One of the most common of errors is ‘Transposition’, this is usually in the ‘pence’ of an entry such as writing £89.92 as £89.29 which would give you discrepancy of .63, another is posting entries, from the Journal Voucher, on the wrong side such as an item of £100.00 shown on the Journal Voucher as a Credit which was posted as a Debit, your difference here can be £50.00 or £200.00, either way, the error has to be found and corrected.

The last thing to do in the Nominal Ledger is to ‘close and transfer’ all expense accounts EXCEPT those relating to the Asset Accounts and their Depreciation Accounts.  This is done via journal entry on which you list all the balances as Debits and Credits which close the individual accounts with the Total of all the entries being posted to a ‘Profit & Loss Account’ within the Nominal Ledger.  It is this total that you show on your Balance Sheet with ‘Reserves’, and which should balance your ‘Balance Sheet’.

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The Art of Book-keeping – Part 4

August 4, 2009 in Basic Skills

The next thing we look at is the ‘Month-end’, a lot of companies ‘close’ their accounts at the end of each month, this is purely an accounting exercise so that the Director(s) and the Accountant can see how the company is progressing and what measures, if any, need to be taken.  It is also helpful in relation to preparing Year End Accounts.

 The first thing that must be done is to go through the Purchase Ledger and balance each of the accounts which appear in them.  These samples give an idea as to what should be done and what to expect.                                                                                       

  William Bloggs & Son     A/c No. B.2
Date Detail Folio Debit Credit
   1 Jan 2006 Invoice 26584 pb 1    £         28.15
  3 Mar 2006 Invoice 32000 pb 20    £       140.00
10 Mar 2006 Credit Note 2600 pb 24  £         26.00  
   Sub Totals    £         26.00  £       168.15
31 Mar 2006 Balance c/f  £       142.15  
   Totals    £       168.15  £       168.15
1 Apl 2006 Balance b/f    £       142.15

In the case of the account of William Bloggs & Son when January and February accounts were prepared there was no necessity to ‘balance off’ in this manner as the £28.15 shown as a January purchase would have sufficed as it was.

  J. Henderson Co Ltd      A/c No. H.4
Date Detail Folio Debit Credit
2 Apl 2006 Invoice H.1425 pb 30    £       1,500.00
10 Apl 2006 Invoice H.1460 pb 33    £         750.00
21 Apl 2006 Invoice H.1523 pb 35    £       2,500.00
30 Apl 2006 Cheque 550063 cb 15  £     4,850.00  
   Sub Totals    £     4,850.00  £       4,750.00
31 Apl 2006 Balance c/f    £         100.00
   Totals    £     4,850.00  £       4,850.00
1 May 2006 Balance b/f  £       100.00  
         

 In the case of J. Henderson, you will see the balance brought forward is shown on the Debit Side, this is due to an error in calculation and will be put right when the    next payment made will be this amount short.  Having completed going through the Purchase Ledger you will need to prepare a schedule of Debtors showing how much is due to each Supplier, this means compiling a list and going thru the Purchase Ledger extracting only the balances, this is completed in the manner of an ‘Analysis’ where you show the debt to due to each of your Suppliers by individual month and the Total as shown in the following example.

Schedule of Debtors @ 31 January 1990        
               
A/c Supplier Oct ’89 Nov ’89 Dec ’89 Jan ’90 Total  
A.1 Ayres & Co,  £        -    £   14.00  £   25.00  £        -    £   39.00  
C.4 Charlton’s Ltd  £   30.00  £   25.00  £        -    £   40.00  £   95.00  
F.2 Fredericks& Co  £        -    £   40.00  £        -    £        -    £   40.00  
  Totals  £   30.00  £   79.00  £   25.00  £   40.00  £ 174.00  
               
               

You will need to keep this to hand for when you begin to Balance the Purchase Control Account in the Nominal Ledger.  The Control Account  should agree with this Schedule, if it doesn’t you will have to back track to find the discrepancy correct the error.

Having finished with the Purchase Ledger, the next thing to look at is the Sales Ledger and, again, we repeat the exercise of balancing each of the accounts.  These two samples hopefully will give you an idea as to what should be done and what to expect, for the second of the two is not straightforward.

  Peters & Riley     A/c No. P.3
Date Detail Folio Debit Credit
   10 Jan 2006 Invoice 62000 sb 12  £       1,500.00  
14 Feb 2006 Invoice 62201 sb 20  £       1,250.00  
   Sub Totals    £       2,750.00  
28 Feb 2006 Balance c/f    £       2,750.00
   Totals    £       2,750.00  £       2,750.00
1 Mar 2006 Balance b/f  £       2,750.00  
10 Mar 2006 Payment Received cb13    £       2,750.00

Here we had the months of January and February Invoices due and the account was balanced as shown with the balance being settled in March.

  J. Ryker & Co      A/c No. R.10
Date Detail Folio Debit Credit
14 Feb 2006 Invoice 62202 sb 20  £       4,000.00  
20 Feb 2006 Invoice 62400 sb 22  £       5,500.00  
   Sub Totals    £       9,500.00  
28 Feb 2006 Balance c/f    £       9,500.00
   Totals    £       9,500.00  £       9,500.00
1 Mar 2006   b/f  £       9,500.00  
3 Mar 2006 Part Payment cb6    £       8,750.00
         

With this account you will see that only two Invoices were ‘posted’ in February with the Account ‘balanced off’ at the close of February.  Subsequently there was a partial payment of £8750.00 received against this account which would indicate that there is a query or problem running which you would need to know about.

As with the Purchase Ledger, having balanced each of the Sales Ledger Accounts you will need to produce an ‘Age Analysis’, this is a list of the customers who have yet to settle accounts with their debt shown in total and then extended out to individual months.  This helps when letters are sent to remind them of their debt.  Again, it would be wise to keep this to one side with the Purchase Ledger list of balances until you get into the Nominal Ledger.

Age Analysis @ 28 February 1993        
               
A/c Client Nov ’92 Dec ’92 Jan ’93 Feb ’93 Total  
J.2 Jenkins & Sons  £ 200.00  £        -    £        -    £        -    £ 200.00  
L.2 James Leslie Ltd  £        -    £ 125.00  £   55.00  £   60.00  £ 240.00  
P.5 Peters & Co.  £   15.00  £        -    £   95.00  £        -    £ 110.00  
  Totals  £ 215.00  £ 125.00  £ 150.00  £   60.00  £ 550.00  
               
               

Again, you will need to keep this to hand for when you begin to Balance the Nominal Ledger, as the Sales Control Account must agree with this Analysis and if there is a difference then you will have to find the error and correct it.

You will also need to agree the ‘Cash Control Account’ to the Balance shown in the Cash Book.  Again, if there is a discrepancy it must be found and corrected.

With regard to the V.A.T. Control Account if the majority of your clients are within the U.K. I would normally expect you to be paying V.A.T.  For a Governmental form this is one of the simplest forms any Government has produced.  In order to help I have shown a ‘dummy’ which I have used in the past:-

V.A.T. Summary for the period:- ……………………………………..    
             
VAT on Sales            
  Jan £        
  Feb £        
  Mar £        
      £      
             
VAT on Purchases Jan £        
  Feb £        
  Mar £        
      £      
             
VAT on Petty Cash Jan £        
  Feb £        
  Mar £        
      £      
             
Amount due to or from H.M.R.C.   £    
             
Total Sales   Gross VAT Nett    
  Jan £ £ £    
  Feb £ £ £    
  Mar £ £ £    
          £  
Total Purchases Jan £ £ £    
  Feb £ £ £    
  Mar £ £ £    
          £  
Total Petty Cash Jan £ £ £    
  Feb £ £ £    
  Mar £ £ £    
          £  
          £  
             
             

As you can see, the amount of VAT you have charged your clients for the months shown is entered against the respective month and then totalled.  You treat the VAT on Purchases and Petty Cash in a similar manner.  Normally your VAT on Sales would exceed the VAT on Purchases and Petty Cash in which case the total shown against “Amount due to or from H.M.R.C.” would be payable to them.  The second part of this form should help with the second half of the Return, you simply enter the Total and VAT amounts from your Sales Day Book and calculate the ‘Nett’ amount for each month and then repeat for the Purchase Day Book and Petty Cash Book and show the Totals in the respective ‘Boxes’ on the Return.

 You may occasionally claim VAT back from H.M.R.C. where you have had a ‘poor’ month or so on Sales or for other reasons. 

 If you ever have a ‘Phone call from your VAT Inspector asking to come and see your books – DON’T panic, it’s his job and he is only making sure that you are recording VAT correctly – if you aren’t don’t worry, he will simply put you right and – unless you are deliberately ‘fiddling the books’ – they are nice people and can be very helpful.

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The Art of Book-keeping – Part 3

August 4, 2009 in Basic Skills

We now come to the Cash Book.  This is where you record the Receipts of monies due to your Company (or Employer) from your Clients and the Payments of monies due to your Suppliers. If you are ‘controlling’ the Cash Book then you should receive all cheques, and perhaps cash, which are monies due to your Company (or Employer) and these are entered on the LEFT hand side ‘The Receipts’ of the Cash Book, on the day and date you receive them, showing the amount in the ‘Total’ column and extending to the respective ‘Analysis’ column, or ‘Sundries’ noting the Nominal Account Code.

 Having entered the receipts in to the Cash Book you then need to complete the necessary ‘Paying-In’ slip for the Bank listing on the reverse the name of

each of the payers and the amounts they have paid and the total of these is then transferred to the front of the slip in ‘Total Cheques’ with any cash being shown in the boxes above then totalled and, adding on the cheques a final Total at the bottom.  This is then taken to the Bank, either by yourself or a messenger, and paid in over the counter. 

 The next course of action regarding the Cash Book is to ‘Post’ any items which appear in the ‘Sales Ledger’ column to your Clients accounts in the Sales Ledger, ‘Closing off’ each account where there is no Balance left after the entry is posted, this is simply done with a RED line across the monetary columns only.  You may also occasionally have an instance of money being refunded to you by a supplier and your course of action is to post from either

the ‘Purchase Ledger’ column, if you have one, or from whichever column it has been extended to, in to your Suppliers account indicating which Invoice or Invoices this refund refers to.

When it comes to paying your Bills you may have certain times in a month when you settle certain Suppliers settling with other Suppliers at a different date, in one office I worked in I had four Fridays on which I made payments to all my Suppliers – rather than settle all in one day.  You might well experience the same thing.

 When you are ready to begin paying your Suppliers you will first need to balance their account in your ‘Purchase Ledger’ and prepare remittance advices, with a copy for yourself, showing the ‘Outstanding Invoices’, you either prepare this yourself or, hopefully, have a secretary/typist who can do it for you – if you have one, CHECK her work and make sure it is correct because when you have drawn the Cheque for the correct amount and wait for it to be signed, you will feel a fool if your Director finds a mistake.  I promise you – THEY DO.  So, having got all the Cheques signed and attached to the Remittances all you do now is put them in the post.  Now you have to ‘write up’ the ‘Payments’ (Right Hand) side of the Cash Book with Cheque amount in the ‘Total’ and the extension in to the ‘Purchase Ledger’ column and then ‘Post’ to the Purchase Ledger ‘closing off’ accounts where possible.  Do not forget to ‘Cast and cross cast’ your Cash Book page by page, it will help you in the long run.  You may also be required to write Cheques for other items which are not in the ‘Purchase Ledger’ but will still be entered in to the Cash Book and extended to a Nominal Ledger ‘Column’, the method of dealing with these comes later.

 You then attach your copies of the Remittances to the Invoices you have paid and transfer them to a ‘Paid’ file.

 You will, each month, have to reconcile your Cash Book with the Bank Statements which will have been received by you or the Chief Cashier.  There are two ways of doing this, you either reconcile Cash Book to

Bank Statements or Vice Versa.  The first thing to do is to ‘Tick’ every entry on the Bank Statement against the same entry in your Cash Book, at the end of this you will have un-ticked items in your Cash Book and un-ticked items on your Bank Statement.  If you have any Standing Orders and or Direct Debits on your Statement but not in your Cash Book you must enter these straight away which will eliminate one set of figures.  The next step is the Reconciliation itself, an example is given below:-

Bank Reconciliation as at ………….    
     
Balance per Bank Statement    £ 500.00
     
Add: Payments not entered:-    
Joe Bloggs  £   40.00  
H. Steptoe  £   57.50  
     £   97.50
     £ 597.50
Less: Cheques not presented:-    
R. Waters  £   23.75  
S. Houlder  £    6.49  
     £   30.24
     
Balance as per Cash Book    £ 567.26
     
     

 It would be wise to keep these Reconciliations on a file for reference should there ever be a query.

We now come to the Petty Cash Book.  This is for minor expense such Tea, Coffee and other sundry items which occur on a daily basis.  The way this works is that the person responsible for looking after Petty Cash is ‘given’ a ‘Float’ of, let’s say, £1,000.00.  This amount is kept in a Petty Cash Tin, in various denominations of Notes and Coin and always kept in the safe unless being used, NEVER leave it on your desk whilst you are not around.  At the end of a period, say a month, you will need to ‘re-imburse’ the ‘Float’, this is done by simply adding up all the Petty Cash Vouchers for expense to arrive at Total A, then similarly you add up any I.O.U.’s for Total B, next you take the cash and add up each denomination of Coin and Notes to arrive at Total C and completing a Reconciliation form similar to that shown below which is based on a form I drew up for my own purposes.  In my case the ‘Float’ was for £1,000.00.

Petty Cash Reconciliation as at    
     
Total of ‘Float’    £ 1,000.00
     
Deduct – Petty Cash Vouchers  £ 420.00  
             I.O.U.’S  £   50.00  
     £    470.00
     £    530.00
     
Deduct – Coins  £   26.17  
             Notes  £ 221.00  
     £    247.17
     
Cheque to replenish ‘Float’    £    282.83

 As you will see the amount of the Cheque to replenish is the nett amount after deducting the Vouchers, I.O.U’s, Notes and Coin. 

 In this Reconciliation I have ‘cheated’ slightly, whilst you do not need to list the ‘Vouchers’ as they will be attached to the Reconciliation, the I.O.U.’s will remain with the Petty  Cash until settled by the borrower.  You will need to list the denominations of Coin and Notes with the amount of each shown beside it.  The cheque is made payable to ‘Cash’ with ‘Please Pay Cash’ written in the crossing on the cheque which is initialled by the Signatory to the cheque.  It is wise to take the reconciliation with you when you want the Cheque signed as it may well be asked for.  Again, it is wise to keep these Reconciliations on file as well.

 One thing to remember with regards to the Petty Cash ‘Float’ is that you will be held responsible for any losses irrespective of how much the ‘Float’ is.

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The Art of Book-keeping – Part 2

August 4, 2009 in Basic Skills

To start with the ‘Purchases’, all Invoices which you receive from Suppliers should, where possible, be entered in date order into the ‘Purchase Day Book’ showing Date, Supplier, Invoice number followed by the Amount, V.A.T. and the Net amount extended in to a column headed for that type of expense, or into a ‘Sundries’ column with a Nominal Account code applied against the entry, the Nominal Account code is actually the Account in the Nominal Ledger to which this item will be posted.  I should mention before we go too far into this narrative that some companies in setting up their Accounts Department make it a rule that ALL Suppliers Invoices must be checked by the department responsible for the ordering of whatever the invoice relates to – it is purely a method of verification, though they should keep the Accounts Department informed of what is happening.

 This done, your next step is to enter these items into a ‘Purchase Ledger’ in which you should have individual accounts for each Supplier where you then ‘post’ each Invoice to the credit (right-hand) side of their account, showing in the ‘Purchase Day Book’ the account reference for each Supplier as you ‘post’ to the ‘Purchase Ledger’ cross referencing with the page number of the ‘Purchase Day Book’ shown against the amount ‘posted’.

 It is of help to yourself if you get into the habit of ‘Casting and cross casting’ weekly, that is adding up the columns and then their totals across to check the Main total.

 It is also to your benefit to keep any and all filing up to date.  Remember, all documents which substantiate your accounts have to be kept, by Law, for  Seven Years.

 The next book of entry is your ‘Sales Day Book’, this is entered in similar fashion showing the Date, Customer, Invoice Number, the Total, V.A.T and then the Net amount extended into the appropriate column for that source of income.

And then, as with the purchases, you ‘post’ each item into the respective Customer’s individual accounts in the ‘Sales Ledger’ showing the Invoice amount on the debit (left-hand) side noting the account reference against the entry in the ‘Sales Day Book’ and the page number of the ‘Sales Day Book’ against the item ‘posted’.

 Credit Notes can be entered, IN RED, into the respective ‘Day Book’ and ‘posted’ along with the Invoices remembering to deduct the Credits as you go and posting them on the opposite side of the account in question in the ‘Purchase Ledger’.  This said, your employer may have installed a book simply for Credits against Purchases and a separate one for Credits on Sales.

 Again it would be to your benefit to cast and cross cast on a weekly basis.

 If you are a member of an Accounts Department it may well be that you would look after either one or both of the ‘Day Books’ just referred to. 

 If this is the case then you must be prepared to deal with all and any queries that arise from your work with the other Departments within your company.

 However, I shall continue as the subject is far from complete.

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TEN STEPS to Recession Survival

July 25, 2009 in Development

steps_tie1In response to suggestions that the UK is already in a recession, Business Link has issued its top ten steps to help local businesses prepare to survive the economic slowdown.

Following its announcement of a free business ‘health check’, the Government funded support organisation has reported that enquiries received from trading businesses into its Information Centre in October are up 100% on the same point last year. Also on the increase are requests for information on redundancy and liquidation, with 10% of callers seeking information on these areas compared to a negligible number in previous months.

Pat Smith, chief executive of Business Link in the East of England said:

“On the basis that we are seeing an increase in customers coming to us who are already feeling the pinch, there will be many more out there who are either trying to weather the storm alone or who do not realise that by taking action now, they could avoid problems further down the line.

“These steps are really just a starting point for anyone who is worried about the future of their business. The next stage is our ‘health check’, which takes stock of where a business is currently and looks at what needs to be done to move ahead. We know that businesses who take advice from Business Link have better survival rates, so our message is simple: call us now on 08457 17 16 15.”

Ten point plan for recession survival

1. Mind your cashflow
Understand exactly what your finances are telling you. Issue invoices promptly and chase up debtors; don’t buy more stock than you need; negotiate longer credit terms with suppliers; shorter ones for customers; fill up gaps in your forward order book; and keep in touch with your bank.

2. Cut your costs
Look for savings in every part of your business. Making your business greener isn’t just about saving the planet, it’s also about saving you money. Do you turn equipment off at night? Is every business journey necessary? Are you taking full advantage of your tax allowances?

3. Credit check new customers
It may take only one major customer to go bust to jeopardise your business. Protect yourself by conducting rigorous credit checks on new customers and agreeing clear credit terms up front.

4. Focus on retaining customers
When finances are uncertain, consumers cut their discretionary spending, so do all you can to keep your customers coming through your doors. Loyalty schemes, small discounts and regular communications are just three ways of letting your customers know you value them.

5. Provide outstanding customer service
Consumers appreciate businesses that give them more for their money, especially when times are tough. Efficient service, fast delivery, flexible payment terms, and so on, can persuade people to spend with you rather than a competitor.

6. Increase your marketing
When competing for a smaller pot of money, it becomes more important than ever to tell people why they should come to you. You don’t have to break the bank, but be sure to shout about your business.

7. Concentrate on products and services that sell
Don’t put your efforts into trying to sell things that are untried or that few people will buy; stick to profitable favourites. Don’t be tempted to slash prices either – if demand for your offer is not price sensitive, you will be giving your profits away.

8. Train your staff
Your staff are one of your greatest assets and could be the key to retaining customers and keeping your business running. Training is important to their personal development and the productivity of your business, so don’t be tempted to scrap your training plan.

9. Streamline your operation
Consider moving to smaller premises, or subletting your existing space. Sell off excess equipment and look at staffing – are your people concentrated in the right areas? Will flexible working be more cost efficient? If considering redundancies, remember that it’s bad for morale and replacements may be hard to find when business picks up.

10. Sell online
An online sales or marketing channel will expose you to a larger marketplace for minimal cost. Plan and resource online selling properly, including providing payment security, attracting visitors and meeting orders swiftly.

For further information visit www.businesslink.gov.uk/east/healthcheck

BLABOUT BUSINESS LINK
  • Business Link in the East of England provides information, practical advice and support to help people to start, run or grow their business
  • Our clients fall in to two main categories:
    - Those running or working in established small and medium sized businesses
    - Those who want to start their own business
  • Both clients groups can access independent, impartial and, in most instances, free help and support from Business Link in the form of:
    - Free one-to-one help from an experienced business adviser (for established businesses only)
    - Workshops and briefings on a range of business subjects such as business planning, sales and marketing, legislation, developing people
    - Telephone and online support through our Information and intelligence centre
  • Business Link in the East of England works with businesses and entrepreneurs in the 6 counties in the East of England: Suffolk, Norfolk, Essex, Bedfordshire, Cambridgeshire and Hertfordshire
  • Business Link is a government initiative to promote enterprise, funded in the East of England by the East of England Development Agency

Business Link understands your problems, challenges and goals and can help your business grow and become more profitable.

Contact us on 08457 17 16 15 or visit www.businesslink.gov.uk/east

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Benefiting Businesses and Communities in Peterborough through Digital Ecosystems

July 25, 2009 in Development, Management, SME to SME

How would you feel if your landlord could come into your house and any time to search through all your belongings and use the information gained for their own benefit? leaf

That is what you are permitting when utilising some of the convenient sites provided by some of the major internet players. One can almost hear “Thanks for telling me who your friends and contacts are! What sites are you visiting? Oh yes and what was that you bought yesterday? – Nice track, maybe you would like more from the same artist? ” and so on.

We currently accept this in return for the benefits we gain. We even exploit it ourselves when optimising websites. However, there is an increasing trend to have on-line writing, spreadsheet and presentation programmes, even file sharing for collaboration. Do we as businesses want others to also be able to access these and utilise some of the information for their own purposes -or would we rather have control of our own data?

To find out more about how this might be countered, I joined an information sharing and brainstorming meeting at Lucy Cavendish College, Cambridge (http://www.lucy-cav.cam.ac.uk/pages/thecollege.php ) at the invitation of fellow HBN member Dr Jo Stanley, expert in Intellectual Property (IP) issues. As usual, I was wearing three hats – interested individual, my company Milton Contact Ltd (www.miltoncontact.com, www.miltoncontact.co.uk) and active member of the Huntingdonshire Business Network (www.hbn.org.uk).

Professor Paul Krause of the University of Surrey (http://www.cs.surrey.ac.uk/profiles?s_id=2013 ) gave a brief overview of the ethos and aims of a European wide project involving “Digital Ecosystems”, a term that had piqued my curiosity but otherwise meant little to me prior to the meeting. The other two attendees apart from Jo and myself were Amir Razari, the researcher working on the project, well informed and with a streak of humour glinting in his eyes, and Will Spinner, Principal Economic Regeneration Officer of the Peterborough Regional Economic Partnership (http://www.preppeterborough.org/). Will was keen to find out if “Digital Ecosystems” could provide a means to a addressing both Peterborough’s ambition to improve its business ranking as a UK city and address the social issues that exist.

In an attempt to level the playing field, Digital Ecosystems have been one of the elements being developed within a Framework 6 European Commission R&D research program called REDEN (Regions for Digital Ecosytems Network http://reden.opaals.org/doc/reden-mission-draft.pdf) and is now fully supported by the OPAALS network of Excellence (http://www.opaals.org/).

Harking back to the original idea behind making the internet available to all, the basic principle is to provide open sourced web based flexible tools that allow sharing of information between individuals, groups or regions by having a common http interface, to stimulate a knowledge based economy in the EU .

In simple terms, for example, all you would need is an internet browser – to securely access and share documents, spreadsheets, presentations and data without hidden restrictions or unwanted access to your data.

I say “for example” as the end user applications are deliberately left vague, for good reason. The idea is not to be prescriptive but to provide basic tools and networking ability and allow the users to evolve systems that work for them (hence the Digital Ecosystems in the project title). Users could be groups of like-minded individuals, collaborating SMEs or even geographic regions.

The hope is that these tools will act as seeds for major paradigm shifts in social or economic activity. Just think of the success and social impact of texting, which arose unexpectedly from the use of a simple service utility left over in mobile phones in high technology culture Japan, when only telephony was the original intention; of Mobile phone communication providing a giant leap over the limits of land line telephony in Africa.

From a small business perspective, I could appreciate the potential benefits. I’m acutely aware of the impact of large commercial players locking you into their systems – most businesses use a Microsoft Windows operating system (96% in 2006) and Office for routine activities; Graphic design is dominated by Adobe Illustrator; PayPal is the first simple assistance for financial transactions that comes to mind and I am sure you can think of others. Furthermore, there are not only cost implications with their use, but also a regular need for updates, or even more frustratingly, changes in operating systems that dramatically curtail the previous accessibility of other software you are using or just require valuable time for refamiliarisation. 90% of businesses are micro-businesses of 1-5 employees and especially at startup, the financial and time burden of existing systems can be disproportionately large in their impact
Collaboration and communication tools are also important to me as an active networker with both local and international contacts. It is now hard to imagine working without Windows Live Messenger, Skype, Google as current communication tools for voice, text, images and data.

As Paul’s talk progressed, I therefore began to grasp the concept and see the benefits of commonly accessible, open sourced, online or peer to peer networked systems that only required an internet browser and were otherwise independent of the operating system (Windows, Mac, Linus) on individual terminals.

Will was keen to understand how a digital ecosystem could bring benefits to Peterborough. Peterborough is a city with excellent infrastructure links to the road and rail arteries of the UK and situated close to the manufacturing and industrial centre of the Midlands. Strengths include food production & processing, environment and advanced engineering. However the labour market affected by an increase in elementary occupations; skills attainment was still below the national average and the absence of higher education facilities hampered the local R&D and technology base resulting in few high-tech start-ups (Peterborough sub-regional economic strategy
http://consult.peterborough.gov.uk/portal/planning/pet erborough/cs/cspo?pointId=36413). It was going to take decades to build up the necessary physical infrastructure in the form of a local university and provide incubators for new businesses with space for them to grow.

The brainstorming began. Two main themes became apparent offering applicability of digital ecosystems to Peterboroughs unique challenges.

1. Enabling communication: With the near ubiquity of broadband and mobile access to the internet, physical proximity of businesses or individuals became less of an issue. There is already a growing familiarity of social networking via the web, particularly amongst the younger generation. Providing knowledge and lo-cost materials, a range of target groups could be given access to Peterborough based open sourced network tools. Whether Hi-Tech entrepreneurs, students, parents taking maternity or paternity leave, disadvantaged groups -the principle would be “here’s a set of tools that allow you to communicate with like minded people – now see how you can adapt and use them to fulfil your needs (and discover new ones and their solutions!)”.

2. Fostering innovation and ideas: Following on from point 1, Communication is an excellent breeding ground for innovation, whether at the intellectual level regarding cutting edge science, finding complementary skills and synergies in business or simply discovering a new need that you can or could answer with your idea, product or service.

The meeting concluded with a clear intention to explore a practical demonstration project in setting up a digital ecosystem in Peterborough. There would be mutual benefit to the City, in attempting to address at least one of the Peterborough sub-regional partnership objectives, and to the researchers by providing a UK applied system that would enhance the REDEN project.

Milton Contact would continue to be involved either as an interested company or (more usefully) as link or facilitator able to access the networking& collaboration skills of partner businesses through
Huntingdonshire Business Network (HBN) members active in the region and internationally.

Chris Thomas
Director, Milton Contact Ltd.
contacts regarding information arising from this article:

Dr Chris Thomas, Milton Contact Ltd/HBN – T: 01223 440024 E: chris@miltoncontact.com
Dr Jo Stanley, Lucy Cavendish/ HBN – T: 01223 332190 E: js731@cam.ac.uk
Professor Paul Krause & Amir Razari, University of Surrey – T: 01483 689861 E: p.krause@surrey.ac.uk
Will Spinner, Peterborough City Council – T: 01733 742668 E: will.spinner@peterborough.gov.uk

Photo: Tulip tree leaf from Lucy Cavendish College by www.miltoncontact.com. The tulip tree is a native of North Americal, cultivated as an ornamental tree. The leaves are distinctive and timber, known as white wood, is used for house interiors in the US.

For the full article as a downloadable pdf download here – The article was written using the open source Writer of OpenOffice.org.

 

 

 

 

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Business Link… the place to go for business support

July 25, 2009 in Development, Management, Startup

BLFor information, practical advice and support to help you run or grow your business, Business Link is the place to go.

Whether your business is established, or you are just starting out, we can provide you with independent and impartial support to help your make the most of your business.

Business Link is your gateway to:

Free one-to-one business advice with an experienced business adviser, who will

• Identify and analyse your business needs
• Develop and customise a plan of action
• Provide a summary of support services required to meet your needs
• Support you in the implementation of your plan

Answers to any business questions through our Information and Intelligence Centre, including

 

• Mailing lists selected to meet the needs of your target market
• Company information and/or more extensive company reports
• Potential sources of grants, finance and/or subsidised business services
• General business and market intelligence

Workshops and seminars covering a vast range of business topics, such as

 

• Understanding business legislation and regulations
• Starting your own business
• Winning public sector contracts
• Successful marketing for growth

Business Link understands your problems, challenges and goals and can help your business grow and become more profitable.

Contact us on 08457 17 16 15 or visit www.businesslink.gov.uk/east

 

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Free Business “Health Checks” across the UK

July 25, 2009 in Development, Startup

  
• Our clients fall in to two main categories:

- Those running or working in established small and medium sized businesses

- Those who want to start their own business

• Both clients groups can access independent, impartial and, in most instances, free help and support from Business Link in the form of:

- Free one-to-one help from an experienced business adviser (for established businesses only)

- Workshops and briefings on a range of business subjects such as business planning, sales and marketing, legislation, developing people

- Telephone and online support through our Information and intelligence centre

• Business Link in the East of England works with businesses and entrepreneurs in the 6 counties in the East of England: Suffolk, Norfolk, Essex, Bedfordshire, Cambridgeshire and Hertfordshire • Business Link is a government initiative to promote enterprise, funded in the East of England by the East of England Development Agency
 

 

 

 BLIn response to suggestions that the UK is already in a recession, Business Link is offering a free business ‘health check’ to all small or medium sized businesses.
• Our clients fall in to two main categories:

- Those running or working in established small and medium sized businesses

- Those who want to start their own business

• Both clients groups can access independent, impartial and, in most instances, free help and support from Business Link in the form of:

- Free one-to-one help from an experienced business adviser (for established businesses only)

- Workshops and briefings on a range of business subjects such as business planning, sales and marketing, legislation, developing people

- Telephone and online support through our Information and intelligence centre

• Business Link in the East of England works with businesses and entrepreneurs in the 6 counties in the East of England: Suffolk, Norfolk, Essex, Bedfordshire, Cambridgeshire and HertfordshireIn response to suggestions that the UK is already in a recession, Business Link is offering a free business ‘health check’ to all small or medium sized businesses.

bl2Towards the end of last year, Business Link reported that enquiries received from trading businesses by its Information Centre were up 100% on the same point last year. Also on the increase were requests for information on redundancy and liquidation, with 10% of callers seeking information on these areas compared to a negligible number in previous months.

Dominic O’Sullivan of Business Link said:

“On the basis that we are seeing an increase in customers coming to us who are already feeling the pinch, there will be many more out there who are either trying to weather the storm alone or who do not realise that by taking action now, they could avoid problems further down the line.

“Contacting our information centre is just a starting point for anyone who is worried about the future of their business. The next stage is our ‘health check’, which takes stock of where a business is currently and looks at what needs to be done to move ahead. We know that businesses who take advice from Business Link have better survival rates than those who don’t, so our message is simple: call us now on 08457 17 16 15.”

In addition to the health checks, Business Link will once again be running its programme of workshops and seminars for those who are either looking to move into self-employment, or established businesses that are looking for information on tools such as marketing, PR and finance control.

All workshops are free and they take place on different dates at a variety of locations within easy reach of Huntingdon to enable business people to attend at a time that fits in with their commitments.

For further information on events visit the website www.bookevents.org or phone the events booking team on 0845 601 1000. For all other enquiries telephone 08457 17 16 15 or visit the Business Link website www.businesslink.gov.uk/east .

ABOUT BUSINESS LINK

• Business Link in the East of England provides information, practical advice and support to help people to start, run or grow their business

 • Business Link is a government initiative to promote enterprise, funded in the East of England by the East of England Development Agency

 Towards the end of last year, Business Link reported that enquiries received from trading businesses by its Information Centre were up 100% on the same point last year. Also on the increase were requests for information on redundancy and liquidation, with 10% of callers seeking information on these areas compared to a negligible number in previous months.

Dominic O’Sullivan of Business Link said:

“On the basis that we are seeing an increase in customers coming to us who are already feeling the pinch, there will be many more out there who are either trying to weather the storm alone or who do not realise that by taking action now, they could avoid problems further down the line.

“Contacting our information centre is just a starting point for anyone who is worried about the future of their business. The next stage is our ‘health check’, which takes stock of where a business is currently and looks at what needs to be done to move ahead. We know that businesses who take advice from Business Link have better survival rates than those who don’t, so our message is simple: call us now on 08457 17 16 15.”

In addition to the health checks, Business Link will once again be running its programme of workshops and seminars for those who are either looking to move into self-employment, or established businesses that are looking for information on tools such as marketing, PR and finance control.

All workshops are free and they take place on different dates at a variety of locations within easy reach of Huntingdon to enable business people to attend at a time that fits in with their commitments.

For further information on events visit the website www.bookevents.org or phone the events booking team on 0845 601 1000. For all other enquiries telephone 08457 17 16 15 or visit the Business Link website www.businesslink.gov.uk/east .

 

Contact us on 08457 17 16 15 or visit www.businesslink.gov.uk/east

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