How to get the most out of Xero right from the start…

When you start using Xero, you’ll wonder how you ever managed without it. We’re big fans here at Smarties Bookkeeping Limited and know how happy clients are when they can see their cash flow situation whenever they want, send online invoices, pay bills and run their businesses more effectively.

While we set up the basics for all new Xero clients, there are key features you’ll want to know about from the very beginning so you can spend more time on your business and less time on your accounting. We’ve listed some of the most important below and encourage you to browse all thewalk-through videos and all the starting out support articles.

Understanding the dashboard

Get to know the Xero Dashboard that displays all of your most important financial information, includingmoney coming in and going out, invoices owed to you and bills you need to pay. Find out how to use the dashboard, customise it, and find shortcuts for daily tasks.
Support article

Confirming settings

Here’s where to go to confirm or update that all your contact information, social media links, tax rates,and Xero users are accurate. You can also add your company’s branding to invoices, quotes and other documents here.
Support article

Attaching files

With Xero Files, you can access your documents from anywhere. Find out how to upload, organise and attach documents to your invoices and quotes.
Support article

Connecting bank accounts

Xero’s all about making tedious tasks easier so Xero connects straight to your bank so your transactions feed in automatically. Here’s how to set things up. Support article

If you need any help, just give us a ring or email info@smartiesbookkeeping.co.uk

Christmas and HMRC

Ensuring your yuletide cheer is reported correctly

I know that tax is the last thing we want to be thinking about in the festive period but ensuring that we report our expenditure correctly helps to ensure that there will be no assessments raised by HMRC in the New Year – and that is the last thing we all need on a cold, rainy January day!

The Christmas Party

When the party is purely for employees, this can be viewed as staff entertainment and is wholly business related and VAT is, therefore, fully recoverable.  However, complications arise when either partners of staff or business contacts are also invited.  When this occurs, only the VAT that relates to the staff members can be recovered; i.e. If you have a party for 100 people, and only 50 of those are staff, then only 50% of the VAT can be recovered.

Just remember that entertainments costs must be below £150 per head – to include any other events open to all staff during the year (a summer BBQ perhaps).

Another thing to bear in mind, if any events are for Directors of the business only, then VAT isn’t recoverable.

The Decorations

Everyone loves a bit of tinsel to get in the Christmas spirit – and, good news, decorations are tax deductible and classed as office running costs.  Get those baubles polished!

Gifts to Clients

Gifts to customers should be recorded as ‘business entertaining’ meaning that you can’t normally claim VAT on them, unless:

  • They contain an advert for the trader (that’s you!), AND
  • Are NOT food, drink, tobacco or a voucher exchangeable for goods, AND
  • The cost of the gift is under £50 (this total needs to include any other gifts provided to this same customer in the same accounting year)

Happy Shopping!

Rewarding your staff

Christmas is a great time of year to give your employees a little something extra to thank them for all their hard work through the year and send them off on their merry way into the festive break.  However, there are some things that you need to consider:

Cash Bonusesthese need to be treated the same way as regular earnings and are, therefore, subject to the same tax and NI regulations.

Non-Cash Gifts – if a gift doesn’thave a cash value (Turkey or chocolates, anyone?), HMRC may accept this as a ‘trivial benefit’ and it won’t need to be recorded on any P11D’s and won’t be subject to any extra tax or NI.  However, if the item doeshave a cash value (meal vouchers for example), these would need to be reported on a P11D and would also be subject to Class 1a NI.

I know that navigating HMRC rules can be a bit of a minefield, so please remember you can always ask us – its what we are here for!

 

 

 

Management Accounts

It can be argued that smart planning is the key to running a successful business.

Relevant and up to date financial information in the form of management accounts are crucial to making the best decisions possible that enable you to plan ahead effectively, a very useful tool in the proverbial business toolbox!

With a high percentage of businesses failing within the first five years, it is worth noting that producing only statutory financial reports just at year end is often not enough.
Weekly, monthly or quarterly figures can give you a clear indicator of performance suited to your businesses needs allowing for finer control and an accurate picture of financial performance. Figures can be compared against budgeted/last month/quarter/year’s figures to improve margins, boost productivity and help with budgeting.

Management accounts can also help with business cashflow, offering insight into areas which can be improved or cut out.

Not only do management accounts provide insight to those within the business, they are also your ticket to business growth through investment via external lenders such as banks or investors who will be looking for reassurance that your business is financially stable and competently run.

To summarise, management accounts can:

Give you back financial control
Enable you to plan ahead
Help you make better business decisions
Improve margins, cashflow & budget
Help with business growth & investment