Now that HMRC have announced the timetable for MTD (Making Tax Digital), which will see the first wave of businesses having to comply from April 2019, it is no surprise that accountants are starting to plan ahead. Businesses who are not already using a cloud based bookkeeping system need to be aware that to enable them to file quarterly financial information to HMRC, they must move over to a system that enables them to electronically send this information to HMRC.
Throughout the past couple of years, we’ve helped our clients convert to Xero and to provide the necessary training. Unfortunately, clients do not get as excited as us when the bank feeds start working or expense invoices are electronically entered via Receipt Bank then matched automatically to the payment in Xero. Until now...
We have recently launched Raffingers Advisory and instead of explaining what it's all about, I thought I would share with you a case study of how this helped a client of mine.
Case Study
Let me introduce you to Mark who runs a small recruitment company with 5 employees. He has been using Xero and Receipt Bank for a while now and is quite pleased that all he has to do is take a picture of his expenses and we deal with the rest of the bookkeeping. I called Mark a few months ago and asked him to come into the office for a catch-up meeting, which I made clear to him was at no charge. I started the meeting by asking him how the business was going, what his main challenges were at the moment, what his goals are for the next year, if he was looking to hire new staff, how the cashflow was, if he was looking to expand and most importantly what numbers he measured on a regular basis. We then proceeded to the Raffingers Discover part of the process and looked at some of the key figures in his business. An example of this is below:
We quickly highlighted some key issues that needed looking into immediately, namely cashflow and retaining key employees. We also discussed whether Mark measured some of the non-financial numbers in his business and I showed him some of the KPI's that we should be reporting on to measure how well the business is doing. He realised that he had taken his eye off the ball and that we should be looking at the profits per fee earner, number of calls being made per consultant, client candidate interviews and sales pipeline. This is the Raffingers Insights part of the process and Mark understood that he should be working more "on" the business rather than "in" it and would start thinking about obtaining this information going forward. I reminded him that if you cannot measure it then you cannot improve on it.
This then led me onto Mark's goals for the next 12 months and similar to many other businesses I look after, Mark had not really looked at the future. This is where our unique Raffingers Future process kicked in as I showed him within a few minutes a profit and cashflow forecast using his existing data within Xero for last year and projected forward what the profit and cash position would look like. This was the first time Mark had seen what his business will look like in the future and quickly appreciated the value this would have, especially when we could now compare the actual v budgets/targets going forward and make decisions quickly if required to improve the business or highlight problems before it was too late.
We finished the meeting on a really positive note and over the next 12 months we are going to meet once a month to concentrate on improving the key areas of the business. He has instructed us to provide various "what if" scenarios so we can see what the impact is on the business by employing a few more consultants. We are also looking to use a factoring provider to improve the immediate cashflow problem.
Due to the success of this meeting and the benefit our clients will get from this process, all the partners and managers within the firm will be given the necessary training, tools and support to offer the Raffingers Advisory service to all our clients. So, if you are a client of Raffingers look out for the “free” one-to-one meetings to kick start this process and to get a better understanding of your business. We want to make sure you receive the necessary support to improve and grow your business.
For further information or advice on Making Tax Digital (MTD) or Raffingers Advisory, contact lee.manning@raffingers.co.uk.
You can also follow us on Twitter for more tips on cloud accounting, MTD and tax.