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  • Part time Finance Director | Part time FD support for your team
    compiling end of year accounts Quite often they don t realise you are unaware of this critical information As a business owner you must understand and get to grips with every aspect of financial management It really is the key to business success It is also a skill that far too many business owners lack Many small and medium sized businesses fail because their owners don t have up to date crucial financial information or the sound support to exploit it Revealed The 10 Things Your Accountant Hasn t Told You About Your Business is written by part time Finance Director Gordon Welsby gives you the crucial information that you as a business owner should know and use regularly You ll discover How to plan a clear path to reach your business goals How to manage your cashflow The critical information you really need to know about your business How to establish a pricing structure that creates profits Three ways to increase your turnover How to get the best from your bookkeeper AND your bank manager By the time you ve finished you ll feel much more confident of your financial management awareness and ability If you own your business

    Original URL path: http://www.welsbyassociates.co.uk/ (2016-02-15)
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  • Charities | Part time Finance Director
    accounting set up Gordon joined our charity as its first Finance Director The task facing him was daunting to integrate the accounts of literally thousands of projects throughout the UK which had been run by volunteers and operated independently Gordon implemented systems to control and monitor the extremely complex financial operations and introduced an effective group structure which in addition obtained the maximum taxation and VAT benefits for the charity It was no easy task but he carried it out efficiently and effectively His interaction with volunteers and staff and his ability to communicate at all levels whether on a financial or non financial basis was a huge factor in ensuring the growth and success of the charity Gordon is extremely hard working and his reliability and support were invaluable during my period as Chief Executive Chief Executive national charity Improving a charity s financial procedures Gordon was asked to provide an assessment of our financial procedures and make recommendations for improvements Gordon performed his duties far beyond our expectations He was reliable professional and extremely pleasant in his dealings with staff His final report was clear and concise and delivered on time We are currently developing our plans to

    Original URL path: http://www.welsbyassociates.co.uk/?page_id=51 (2016-02-15)
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  • Professional Services | Part time Finance Director
    and it was difficult if not impossible to plan for the financial future A bit like a plane with no pilot Gordon has helped us to understand the basics of the financial position of our business so we have a clearer understanding of where all our money goes and what we have left He is incredibly patient and tenacious as he says himself he is a completer finisher a quality

    Original URL path: http://www.welsbyassociates.co.uk/?page_id=53 (2016-02-15)
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  • Interim | Part time Finance Director
    accounts my Financial Accountant fell ill unexpectedly and was out of action for several weeks Gordon s experience of putting together statutory accounts and his working knowledge of charity accounting and SORP meant that he was able to step in at short notice and take over the reins Gordon worked with us for four weeks under a tight deadline pulling together the draft accounts and supporting schedules which once my

    Original URL path: http://www.welsbyassociates.co.uk/?page_id=55 (2016-02-15)
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  • Useful Info | Part time Finance Director
    their expected useful life It is shown in the P L account as an expense of the business Factoring This is a useful method for improving your cash situation but it may be expensive It involves selling your trade debtors to a company who will typically advance 60 80 of your sales invoices when raised and 40 20 less their costs when the invoices are paid by your customer Financials or Financial Statements Otherwise known as the Accounts or Report and Accounts of the business These are the statutory annual accounts for the year The term Financial Statements is increasingly being used and is another unwelcome use of American business vocabulary Fixed assets This describes the assets that are required by the business in order to operate on a continuing basis There are three types of fixed assets Tangible assets e g plant machinery equipment vehicles and buildings Intangible assets e g goodwill and intellectual property such as patents or trade marks Investments these would be held for long term gain e g equities shares Forecast After say six months into the financial year and with the benefit of the results of the first six months trading a forecast revised budget can be made to show the expected out turn for the year Invoice discounting This is very similar to factoring see above but with one major difference Your company and not the third party company will collect the debt In this way your customers are unaware that this arrangement is in place However the longer the debt remains overdue the more interest you will have to pay against the monies advanced on it Ledgers Otherwise known as the Books of account see above There are three main ledgers Sales ledger records the details of the transactions with each of the customers debtors who purchase goods or services from the business on credit terms Purchase or Bought ledger records the details of the transactions with each of the suppliers creditors who supply goods or services to the business on credit terms Nominal or General ledger can be viewed as the master ledger Within this ledger are the nominal accounts see below for all of the income expenditure assets and liabilities of the business For every transaction there are two entries a debit and a credit Therefore when recorded correctly the nominal ledger should always be in balance i e the total of the debit balances equals the total of the credit balances Marketing v sales selling Marketing is the process of matching the resources of the business with customer needs It identifies customer needs and wants and finds ways of satisfying them Whereas sales selling is the disposal at a price of what you have in stock or in the pipeline or the providing of a service Nominals or nominal accounts These are the headings contained within the nominal ledger see above There will for example be nominal accounts for sales purchases for resale payroll costs by department rent telephone

    Original URL path: http://www.welsbyassociates.co.uk/?page_id=27 (2016-02-15)
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  • Breakeven Analysis | Part time Finance Director
    this is What gross profit needs to be made in order to meet the overheads of the business Without achieving this minimum level of sales and gross profit no profits will be generated the business will operate at a loss Breakeven percentage This shows the breakeven point as a percentage of the budgeted sales It is a very powerful thermometer in assessing the health or risk of a business The following rule of thumb scale can be used for analysing the breakeven percentage over 90 suicidal 90 80 vulnerable 80 70 strong 70 60 very strong under 60 exceptional Breakeven time The breakeven percentage projected can be converted into time For example a percentage of 88 equates to 10 56 months Therefore if a business starts its year on 1 January it will not be breaking even until 17 November This assumes that the sales levels are reached the gross margin is achieved and the overheads are on plan Not a very comfortable position to be in Breakeven example For your FREE no obligation discussion of your business needs contact Gordon on 01491 671710 or e mail him on info welsbyassociates co uk or fill in the contact form Note that a business with a breakeven percentage of over 80 is unlikely to receive an enthusiastic welcome from a bank or other funder Breakeven Example Company A Company B Sales 1 000 000 1 000 000 Cost of Goods Sold 750 000 650 000 Gross Profit 250 000 400 000 Overhead Expenses 200 000 350 000 Net Profit 50 000 50 000 Breakeven Point 80 87 5 Breakeven Date 18th October 15th November The above example demonstrates why Company A is in a better position than Company B although both are making a profit of 50 000 on sales of

    Original URL path: http://www.welsbyassociates.co.uk/?page_id=72 (2016-02-15)
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  • Jargon Buster | Part time Finance Director
    over their expected useful life It is shown in the P L account as an expense of the business Factoring This is a useful method for improving your cash situation but it may be expensive It involves selling your trade debtors to a company who will typically advance 60 80 of your sales invoices when raised and 40 20 less their costs when the invoices are paid by your customer Financials or Financial Statements Otherwise known as the Accounts or Report and Accounts of the business These are the statutory annual accounts for the year The term Financial Statements is increasingly being used and is another unwelcome use of American business vocabulary Fixed assets This describes the assets that are required by the business in order to operate on a continuing basis There are three types of fixed assets Tangible assets e g plant machinery equipment vehicles and buildings Intangible assets e g goodwill and intellectual property such as patents or trade marks Investments these would be held for long term gain e g equities shares Forecast After say six months into the financial year and with the benefit of the results of the first six months trading a forecast revised budget can be made to show the expected out turn for the year Invoice discounting This is very similar to factoring see above but with one major difference Your company and not the third party company will collect the debt In this way your customers are unaware that this arrangement is in place However the longer the debt remains overdue the more interest you will have to pay against the monies advanced on it Ledgers Otherwise known as the Books of account see above There are three main ledgers Sales ledger records the details of the transactions with each of the customers debtors who purchase goods or services from the business on credit terms Purchase or Bought ledger records the details of the transactions with each of the suppliers creditors who supply goods or services to the business on credit terms Nominal or General ledger can be viewed as the master ledger Within this ledger are the nominal accounts see below for all of the income expenditure assets and liabilities of the business For every transaction there are two entries a debit and a credit Therefore when recorded correctly the nominal ledger should always be in balance i e the total of the debit balances equals the total of the credit balances Marketing v sales selling Marketing is the process of matching the resources of the business with customer needs It identifies customer needs and wants and finds ways of satisfying them Whereas sales selling is the disposal at a price of what you have in stock or in the pipeline or the providing of a service Nominals or nominal accounts These are the headings contained within the nominal ledger see above There will for example be nominal accounts for sales purchases for resale payroll costs by department rent

    Original URL path: http://www.welsbyassociates.co.uk/?page_id=219 (2016-02-15)
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  • Blog | Part time Finance Director
    customers Continue Reading Tip 3 How to make your accounts something you want to read Published on 19 09 2011 by admin in Tips for Business 0 The problem for many business people is the sheer volume of numbers they receive from accountants and bookkeepers As a business owner you need to know which numbers are important and what they reveal In other words you need information and not data presented in a way that makes sense for your business There are a number of key measures often called Key Performance Indicators you need to know and they will vary depending on the type of business They may include 1 Stock turn important for business holding resale stock 2 Days sales outstanding important if you offer credit to customers 3 Occupancy rates important for hotels restaurants Ideally this information should be produced at least monthly All too often businesses only gleam information in their annual accounts often produced nine months AFTER year end At this stage the information is historic and of little use for effective planning Limited companies are required to prepare and file annual statutory accounts However monthly management accounts will give you real information about how your business performed over the last month and indeed every month in your financial year These should be checked back against the annual budget to see if the business is on track to achieve its objectives Your management accounts should be customised to reflect how your business works for example 1 Are there types of sales than need to be shown separately 2 Do you know the cost of sales for these sales analyses 3 Are overheads shown by your departments or locations In addition to monitoring financial criteria there are other non financial measures to consider Numbers alone can t give you the full picture Performance graphs over time will show trends month by month which are particularly useful if the business is seasonal or has predictably different months for trading in for example August and December In the next tip I ll be looking at the eight simple steps you can take to boost the cash in your business For a free analysis of cash movements in your business please email me at gordon welsbyassociates co uk and let me help you take the first step to understanding your accounts Continue Reading I can t increase my prices can I Published on 23 09 2011 by admin in Tips for Business 0 Many business owners face the dilemma of whether their business would be better off with an across the board price increase to their customers After all won t their customers all go elsewhere to by the products or services that they sell In fact this is the only case with commodities where you are selling the identical product or service to your customers Maybe your product service comes with extra such as quality speed of delivery expertise or other intangible but very important benefits All businesses must make a gross profit or margin when they make a sale This margin is expressed as a percentage of the selling price If you sell for 100 and buy for 70 then your gross profit is 30 and you have a 30 margin out of which you need to pay your overheads The effect of a price increase made by a business will depend upon what margin it makes when it trades The following table will clarify this This table shows a business what proportion of its customers it can afford to lose if it increases its prices If we assume that a business is operating at a gross margin of 30 and wishes to increase it prices by 10 Then it could afford to lose 25 of its customers without a detrimental effect on the business Remember when you increase your prices all your customers don t go away Continue Reading Tip 4 How to successfully manage your cashflow part 1 Published on 26 09 2011 by admin in Tips for Business 0 Many people assume businesses collapse because they are loss making However the reality is businesses go bust because they run out of Cash Always remember CASH IS KING The primary purpose of a business is to attract maximise and retain customers Everything that contributes to this is an investment anything which doesn t is a cost If cash is tight in your business here are the first four of my eight simple steps to boost your cashflow Aim to Invest rather than Spend When you buy a product or service from a supplier think about whether you are making an investment in the business or just spending money Being aware of the difference should make it easier to eliminate non essential purchases Choose your fixed assets carefully Many businesses need fixed assets in order to operate for example premises machinery vehicles etc Before making a purchase find out if you can buy it second hand and save money However ensure you are not just deferring spending on repairs and maintenance to a future date Consider financing fixed assets through leasing to avoid the heavy initial outlay Measure your stocks and work in progress Stocks Do you have too much stock in your business How much is slow moving even worse obsolete Do you know what the stock turn of your business is If not start measuring it now Remember for every 1 000 of stock you have that is 1 000 less cash in your bank account Work in progress in service based businesses If the service is provided over a period of time then before the invoice is raised for the work there will be uninvoiced work that has been done work in progress The smaller the value of work in progress then the more cash there will be in your bank Consider asking for deposits in advance or payments on account Curb bad debts quickly collect money due from customers Before you make a sale to anyone try to get payment up front or on delivery If you have to offer credit terms ensure you run a credit check on your customer Ensure your credit terms are written down clearly and signed by both parties Gain understanding that these are the terms on which both parties are prepared to do business In the second part of successfully managing your cashflow I ll look at four more simple steps to help boost cashflow For a free analysis of cash movements in your business please email me at gordon welsbyassociates co uk and let me help you take the first step to understanding your accounts Continue Reading Tip 4a How to successfully manage your cashflow part two Published on 03 10 2011 by admin in Tips for Business 0 Continuing on from part one last week here are the remaining tips on how to manage your cashflow in business 5 Always find out what the credit terms are for each of your suppliers If a supplier is expecting to be paid at the end of the month after the invoice was raised then don t pay it until then Your supplier isn t expecting it until then For every 1 000 that is paid early that is 1 000 that is not in your bank account Delay payments if you can try to negotiate with your supplier however certain creditors should always be paid on time HMRC being the most obvious PAYE NI and VAT 6 Get the best return for your cash If you have money in the bank you need to ensure you are getting the best return possible If you are operating an overdraft you will be charged interest by your bank for every day you are overdrawn Following the above steps will ensure that your overdraft is kept as low as possible 7 Monitor monitor monitor When you drive a car you regularly monitor all the information displayed on the dashboard and in the mirrors You should operate your business in the same way by regularly monitoring the important Key Performance Indicators in your business By developing your business dashboard you will remain in the driving seat of your business 8 Don t stick your head in the sand Don t be a financial ostrich If you are in any sort of financial crisis find out what is causing it It may not be the obvious answer Prioritise the steps you need to take by speaking to key customers you may be able to negotiate more favourable terms for a while When a supplier does not get answers from an overdue creditor they are far more likely to stop supplying In addition ensure your business chases all the overdue debtors In the next tip I ll be looking at the dramatic effect pricing can have on your business For a free analysis of cash movements in your business please email me at gordon welsbyassociates co uk and let me help you take the first step to understanding your accounts Continue Reading Tip 5 How to decide whether to increase or decrease prices or offer discounts Published on 10 10 2011 by admin in Tips for Business 0 Do you believe that raising prices will turn customers away Do you think that dropping your prices will bring a flood of new customers Do you think that either will make your profits soar The truth is reality can be very different For example a 10 price increase on a gross profit margin of 30 will mean that you could afford to lose up to a quarter of your customers without damaging your profitability The fact is the larger your gross margin the less likely your business profits will fall if you increase your prices Too many business owners fail to understand how many customers they can afford to lose In a similar way decreasing prices or providing discounts will have a severely detrimental effect on your profits unless you dramatically increase the number of new customers at the same time For example a 10 discount on a gross profit of 30 will mean you would need to increase your number of customers or sales volume by 50 in order not to damage your profitability In the next tip I ll be looking at how to keep an eye on where your cash is going on a monthly basis For a free analysis of cash movements in your business please email me at gordon welsbyassociates co uk and let me help you take the first step to understanding your accounts Continue Reading Tip 6 How to know where your cash has gone Published on 17 10 2011 by admin in Tips for Business 0 Businesses can be aware of the profits or losses they are making during the year However many business owners do not understand why their bank balance may have reduced even though their accountant tells them their business is profitable Very few business owners have a clear understanding of whether their business is generating cash or just consuming it It s crucial that you know the sources of the cash coming into your business and how these funds are being applied This information is not available from a cashflow statement yet is one of the easiest parts of a business to analyse if it produces regular profit and loss accounts and balance sheets Virtually all businesses need money continually revolving in their business to buy their stocks and fund their work in progress debtors and creditors These items are referred to as the working capital of a business If the stocks WIP and debtors increase then they will need to be funded from your bank account If they fall that will mean that money is coming into your account The opposite is the case with creditors if your creditors are rising this means that you are using your creditors funds if they are falling you are paying more out of your account In the next tip I ll be looking your debtors and how to see the wood from the trees For a free analysis of cash movements in your business please email me at gordon welsbyassociates co uk and let me help you take the first step to understanding your accounts Continue Reading Tip 7 How to see the wood from the trees customer s debts Published on 24 10 2011 by admin in Tips for Business 0 Everyone knows that the longer it takes your customers to pay you the worse your cash position will become However just because your debtors are high at the end of the month doesn t necessarily mean your debtors are taking longer to pay For example if your annual sales are 2 4m with debtors at 800k all this tells you is that you are owed 800k From these figures it is impossible to ascertain if this is good or bad news It does show that on average your debtors are taking four months to pay you However that may not be very useful information because your debtors may be high because you ve just had the best monthly sales performance of the year Therefore it is imperative to know the level of your debtors in the light of the actual sales you have made in recent months The best way to measure this is to calculate how many days of your actual sales are equal to the total of your debtors at the end of each month This is known as the Days Sales Outstanding Simply if the DSO is growing then your debtors are taking longer to pay and vice versa When businesses have a large number of debtors not all of whom are paying slowly it is helpful to analyse only those who are taking over say three months to pay An aged debtor listing can help establish the real position and enable those responsible for collection to become more focussed on the task in hand In one recent experience the aged debtor listing eventually revealed that virtually all the slow payers had been offered extended terms by the sales team in return for new orders Armed with this new information not only did the MD rule that in future extended credit could only be authorised by him but the sales team bonus structure was changed to be based on sales made less debts owed After all a sale isn t a sale until it s been paid In the next tip I ll be showing you how to get the best from your bank manager For a free analysis of cash movements in your business please email me at gordon welsbyassociates co uk and let me help you take the first step to understanding your accounts Continue Reading Tip 8 How to get the best from your bank manager Published on 31 10 2011 by admin in Tips for Business 0 In recent times banks have been on the receiving end of some very bad press coverage Amongst other things banks have come in for criticism over their failure to advance funds to independent businesses either via loans or overdrafts It is my view that in the past banks have been reckless in advancing funds to businesses with little or no consideration of whether they had any prospect of repayment Today banks are understandably far more cautious Bank managers need to understand their customers businesses In part this can be achieved by visiting and talking with their customers In reality however this only gives them a partial view Many business owners fail to regularly and adequately update their bank manager how the business is performing against budget They don t therefore share their aspirations for the business and those that do don t quantify or periodically update those aspirations Without this information bank managers will have a very hard time supporting a business They need information from their customers not data In challenging times that may inevitably lead to cashflow problems If so then talk to your bank manager at the earliest opportunity The sooner you talk to the bank the more likely they will be able to help Talk also to suppliers If you don t take action in good time you risk affecting your relationships with your bank suppliers and customers Tip Invite your bank manager for a quick meeting to update him on business progress Tell him your plans show him your latest monthly accounts but do this when you don t need anything from him Bank manager s are well connected and like to be kept up to date on progress and when they see a business that s organised and doing well they will often go out of their way to help sometimes sending new customers your way Help your bank manager to help your business In the next tip I ll reveal how to get the best out of your bookkeeper For a free analysi s of cash movements in your business please email me at gordon welsbyassociates co uk and let me help you take the first step to understanding your accounts Continue Reading Tip 9 How to get the best out of your bookkeeper Published on 07 11 2011 by admin in Tips for Business 0 Bookkeepers are the key to maintaining an accurate set of accounts They may be employed on a part time basis and can often be an outsourced resource Remember the old adage garbage in garbage out It can often be the case that people are employed and given the title bookkeeper when in fact they are merely input clerks A bookkeeper will not only understand how to correctly enter data into accounting software but also how it affects the consequential entries in the profit and loss account balance sheet and trial balance In addition a bookkeeper fully understands the whole concept of double entry knows how to reconcile all the balances that make up each balance sheet

    Original URL path: http://www.welsbyassociates.co.uk/?page_id=14 (2016-02-15)
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