Member Article

Festivity or Foreboding for Small Business Owners?

Advent and the season of goodwill to all men may be here but for many small business owners and self-employed people, but early December can be just as synonymous with feelings of unease as the countdown to Christmas is matched by the countdown to the tax deadline at the end of January.

For many, it’s a time to find bank statements, open up envelopes of uncategorised receipts, put the monthly figures into accountancy software and, most importantly, work out where to get the money to pay the tax man as well as the accountant. This isn’t necessarily good news when there are also Christmas presents, parties and dinners to be paid for.

“Whether I’d had a good year or a bad year, I wasn’t comfortable,” explains professional speechwriter Brian Jenner. “Until my accountant worked her magic, I didn’t have a clue how much my liability would be. So, after 12 years of this, my vagueness around money was causing me so much pain, I decided I had to do something about it. My accountant told me that my bookkeeping wasn’t good enough and she instructed me to use a cloud accountancy software package, Clear Books.”

“The cloud element means that your accountant can also log on to your profile and tell you what you’re doing wrong. She also doesn’t need to piece stuff together from your piles of invoices, the software generates all your invoices,” continues Jenner. “I was sceptical at first. It involved setting up a direct debit for something that costs nothing to do on Excel.”

Within two years, Brian had to register for VAT. Within three years the sums of money he was dealing with meant he had to become a limited company.

“Before, I’d thought of myself as a ‘writer’. I believed money matters were a distraction to my purpose. Before, I’d toss receipts into draws and forget about them, I couldn’t see how recording every postage stamp would make much of a difference to my tax liability. Before, I thought it was important just to get work; as long as I was being paid things would be okay. However, by developing a willingness to get to grips with all aspects of my money, using the accountancy software every day and overcoming fears of tax matters like VAT, I reversed all my assumptions.”

Now, Brian says, his accounts are his priority.

“I’ll spend hours trying to allocate a missing 35 pence, because clarity around money matters is my purpose. Now, when I get back from a business trip, the first thing I do is gather up all the small pieces of paper that describe my expenses and put them into the accountancy software. I never have to go back three months and try to work out what a receipt was for. Now, I wait at least 24 hours before replying to work enquiries, and reject at least 50% because they’re not realistic or there is a risk that the client might not pay.”

For the past four years, Brian says, he hasn’t had any worries about that looming deadline at the end of January.

“I don’t enjoy paying taxes, but I do enjoy having clarity about how much I owe to HMRC and everyone else.”

Brian was was so baffled by how dramatic the change was, he has decided to write a book about it: The Bohemian who took up Bookkeeping, How cloud accounting can change everything for artists, creatives and entrepreneurs.

Ends.

This was posted in Bdaily's Members' News section by Howard Robinson .