Read. Review. Recruit. Recruitment Newsletter | Summer/Autumn 2017
Reward and Retain Your Key Staff
IR35: The Latest HMRC Fiasco
The UK Recruitment Index 2016
...with Enterprise Management Incentives (EMI). An EMI share option provides significant tax advantages for your employees.
See how the BBC has tackled the changes to IR35 and our advice for how you should be responding to the new rules.
Over 200 recruitment agencies have given their views on the upcoming challenges and priorities for the sector.
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Contents
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2
Welcome and Partners
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Special Feature Reward and Retain Your key Staff With Enterprise Management Incentives
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Why not Recruit Invoice Finance?
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Client Story 8LEGS Technology
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IR35: The Latest HMRC Fiasco
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Upcoming Events
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Raffingers Foundation Charity Ball 2017
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Employee Spotlight
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Cover That Protects You
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What Data can I use, Share or Keep?
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The UK Recruitment Index 2016
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Thought About Investing in Your Own Company?
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Are you Using These Five key Business Reports to Grow Your Agency?
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Welcome to our RECRUITMENT Newsletter We are now half way through the year and what a year it has been. The election, which was initially thought to be a forgone conclusion, has raised more questions than answers. Although finally, we do have an update on Making Tax Digital (MTD). HM Revenue & Customs (HMRC) has announced that the scheme, due to go live from April 2018, will be delayed. From 2019 only businesses with a turnover above the VAT threshold will have to keep digital records and only for VAT purposes. All other businesses will not be asked to keep digital records or update HMRC quarterly until at least 2020. This does give some breathing space for agencies. If you do have any questions concerning MTD, we are here to help. Moving away from MTD, earlier this year we sponsored APSCo’s SME Forum. At the event, Lee Manning gave a brilliant presentation on Enterprise Management Incentives (EMIs) and how those in the recruitment sector are using them to recruit and retain employees. With many agencies asking us how they can implement EMIs into their agency, our special feature this quarter looks at EMIs - the benefits, conditions and how it works. We would also like to thank Mark Lennard from 8LEGS Technology who has contributed to our client story. Check out page 6 to learn about this fantastic new lead generation tool for the recruitment industry. We hope you find this edition useful, as always if you would like to submit an article to feature in our next edition, then please get in touch. The Partners at Raffingers
Raffingers Partners
Gary Inglis Managing Partner gary.inglis@raffingers.co.uk
Andrew Coney Partner andrew.coney@raffingers.co.uk
Lee Manning Partner lee.manning@raffingers.co.uk
Adam Moody Partner adam.moody@raffingers.co.uk
Suda Ratnam Partner suda.ratnam@raffingers.co.uk
Barry Soraff Partner barry.soraff@raffingers.co.uk
Paul Dell Partner paul.dell@raffingers.co.uk
Roy Butcher Partner roy.butcher@raffingers.co.uk
Upcoming Events - Page 8
Reward and Retain Your key Staff With Enterprise Management Incentives SPECIAL FEATURE
You can help attract and retain your key employees by rewarding them with a tax favoured scheme - an Enterprise Management Incentive (EMI). An EMI share option scheme provides significant tax advantages for your employees. Put simply, an ‘EMI’ scheme is by far the most tax beneficial structure for staff having been introduced in order to assist growing companies in attracting and retaining key employees, and to reward those employees for taking the risk to work for such companies.
Example
How does an EMI scheme work? Very simply put, an EMI scheme works by getting your company to sign a legal agreement with an employee that gives them a right to buy a set number of the company’s shares at a given price at some point in the future. The right to buy the shares ‘vests’ on that future date, so the employee can buy them immediately or they can wait until a later date, perhaps the day that the company is acquired (an ‘exit’ event), in a trade sale, management buyout or even a flotation on a stock exchange.
EMI Scheme
The diagram opposite demonstrates how an EMI scheme works. If we take two employees granted with shares worth £5,000 at a value agreed with HM Revenue and Customs (HMRC). Under non-EMI circumstances, the employee can be taxed as much as 45% based on PAYE, whereas shares purchased under the EMI scheme are tax free and only Capital Gains Tax (CGT) is chargeable at 10%. The example shows that over a span of five years, the share value increases to £50,000, giving the individual a total gain of £45,000 when sold. Without the EMI scheme, just over £20,000 is taxed leaving the individual with just over £24,000. The EMI scheme is significantly more favourable as just under £5,000 is taxed leaving the employee with over £40,000 after CGT.
Non-EMI
£5k CGT at 10%
In 5 Years Share Value increased to £50,000
£45k
£45k
TOTAL GAIN
TOTAL GAIN
Left After Tax
under the EMI Scheme
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PAYE of up to 45%
In 5 Years Share Value increased to £50,000
£40k
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£5k
Left After Tax
As little as
£24k
With no scheme being used
For further information, contact: Gary Inglis 020 8418 2770 gary.inglis@raffingers.co.uk
Why not Recruit Invoice Finance?
Conditions
The importance of making sure that employees are paid correctly and on time cannot be over emphasised. We also understand that your staff will need paying prior to the standard 30 days generally extended to your clients to pay you. Invoice Financing helps you to bridge this gap.
There are a number of conditions that must be met and approved by HMRC in order to be registered for the scheme. To qualify:
Now, as a recruitment agency employing and supplying permanent or temporary staff, you have an obligation to meet your payment deadlines.
1. The company must carry out a qualifying trade 2. The total gross assets of the company must not exceed £30million 3. The total value of the share options granted must not exceed £3million 4. The company can be either listed or unlisted 5. The company must have less than 250 employees working at least 25 hours per week 6. An individual cannot have a material interest in the company. No individual should have a share capital which exceeds 30% 7. The maximum value of shares held by an employee should not exceed more than £250,000 8. The option must be exercised within 10 years in order to receive tax advantages. A tax clearance from HMRC can be obtained if there are any doubts on conditions being met
Advantages of EMI • Relief on Income Tax and National Insurance on shares up to the value of £250,00
• The only tax the employee will be liable to pay is CGT. This will be charged at the Entrepreneur’s Relief rate of 10% • An employee can use their annual CGT exemption allowing them to save further • The scheme is flexible and can be tailored and structured to best meet the demands of the employer • Share options are a desirable incentive as they help to keep key employees within a company • Your company can receive a reduction in corporation tax on the difference between the market value of the shares sold to employees and the exercised price In short, EMI schemes are an ideal way for small and growing businesses to offer an extra incentive to their employees, to reward their commitment and loyalty.
If you are an agency supplying temporary staff, to businesses for instance, you may be experiencing issues caused by timings of cashflow. Clients may have extended periods of credit, say on a 30-90 day basis, yet your temporary contractors expect to be paid on a weekly basis. As well as affecting the day-to-day operations of your business, a shortfall in cashflow can put real pressure on any potential growth and expansion plans that your business may have or committed to. Cashflow management is fundamental. In the UK, invoice finance is a method of providing funds that can ease these financial pressures, so that you can trade without the added burden of cashflow shortfalls. Invoice finance essentially works like an overdraft. You simply notify a lender of the value of your invoices and they will provide an advance on the basis of the agreed terms. If you run a permanent recruitment business or simply have a permanent book, while you may not have the same cashflow pressures as a contractor’s book, an invoice discounting facility can be of benefit. Historically, many invoice finance providers avoided permanent recruitment altogether. This was mainly due to the rebates offered if a candidate did not start their position, or left within a certain period of time. However, as a better understanding of the permanent recruitment sector has developed, some lenders have started providing facilities and at an ever increasing prepayment. To find out more, or even to explore the availability of other funding solutions contact roy.butcher@raffingers.co.uk.
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8LEGS Technology A client lead generation tool for the recruitment industry CLIENT NEWS
Recruitment Tech company 8LEGS Technology Ltd launched its state-of-the-art service at the beginning of 2017 in response to what it sees as a growing market need. ‘The global recruitment industry grew by 8.6% in 2016 and in the UK alone is now worth over £35billion,’ explains 8LEGS CEO Mark Lennard. ‘Competition for new business is fierce. Our lead generation technology helps recruitment agencies to stay ahead of the game by rapidly locating the job leads that are relevant to their sector’. 8LEGS offers a Boolean search feature via its public database. It continually monitors in excess of 13 million unique URLs to locate and index company job pages and in turn delivering thousands of job leads for recruiters via its searches. Its cutting edge technology then revisits the domain every 24 hours ensuring all job leads are live and up-to-date. ‘With over 20 years of experience in the recruitment industry, we understand the challenges faced by today’s recruiters. They are constantly under pressure to exceed their targets and place more candidates,’ continues Lennard. ‘8LEGS provides a shortcut for them to achieve that and make more placements and generate more revenue, by finding job leads they never knew existed. Our users are able to create searches for job leads exactly as they would search for candidates’. 8LEGS offers a flexible, scalable service comprising three plans, Basic, Premium and Enterprise. Key features include:-
• Full Boolean searching to allow the creation of complex search strings • Job leads are identified based on textual content and geographical location
Find hidden roles from existing client data you never knew existed. • A bold search facility allows users to carry out searches for specific words and phrases displayed on company careers sites in bold font (such as job titles) • Historical data searching • Saved search alerts • Email Finder and Send Functionality Both the Premium and Enterprise plans allow users to upload their own data from their recruitment CRM allowing the recruiter to search on their own niche sector and find hidden roles from existing client data that they would have never known existed. Prior to its launch, the company carried out rigorous beta testing on its technology for several months to create a proven system. ‘It’s easy to use, it helps recruiters to boost their sales performance and it places more focus on business development,’ observes Lennard. At present, the company generates job leads in the UK, USA, Canada and Australia. Additional countries are being added on a regular basis. ‘8LEGS is the first comprehensive global lead generation tool,’ concludes Lennard. ‘It’s a game changer for the recruitment industry’.
Further information on 8LEGS can be found at www.8legs.com or by calling 020 3800 0800.
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IR35: The Latest HMRC Fiasco As you are all most probably aware the new rules for IR35 started from April 17 for those working through their own Personal Service Company (PSC) and working for the public sector. I’m interested to see if these rules will extend to the private sector over the next few years, which will have a huge impact on the contractor industry. My views have been mixed, however the more I read comments from experts in this area and attend various events; I think it’s only a matter of time before the private sector falls in line with their public sector counterparts. These new rules haven’t really affected a lot of my clients as not many work for the public sector, however the BBC has been affected by virtue of having to comply with the Freedom of Information Act. As a result, I found myself at the new BBC Headquarters last week near Oxford Circus listening to a tax expert from Deloitte. He tried to explain to the audience quite complicated changes in the tax rules and how they will affect them going forward. The expert didn’t get off to a great start by assuming that all of the BBC workers’ contracts had been reviewed by the BBC and he was there just to educate everyone about their new tax regime. The BBC had clearly not reviewed their workers’ contracts, although the expert did make a very good point that it was not the BBC at fault but HM Revenue & Customs (HMRC) for releasing the CEST (Check for Employment Status Test) six months late, and expecting the BBC to have reviewed thousands of workers within a two month period. The BBC has tried to deal with the changes and thankfully are paying all their workers gross of tax. Indeed, this helps in the short term, but if once they apply the CEST they find that the worker is not considered self-employed, they will then need to back date the tax to April. Now this could cause a huge problem if after say nine months the test is applied, and nine months’ worth of tax is deducted from the next payment. This could potentially leave the worker without “salary” for a few months whilst the tax is being clawed back. I do understand that this is tax that the PSC would have to pay anyway, but from a cashflow timing point of view, this could be disastrous for the worker.
I would therefore recommend anyone caught by this to push for their client to run the CEST as soon as possible, and to ascertain whether they are selfemployed. This will show whether nothing changes or whether the worker is deemed as an employee and tax will need to be deducted at source. There is a small glimmer of hope if you are caught out by the new rules as you can appeal to HMRC. If you are able to demonstrate that you are self-employed and there were circumstances that your client was not aware of and therefore might have completed the CEST incorrectly. For example, the CEST does not ask if you have any other clients that you work for, which would point to self-employment. If this is not an option then you can always correct the annual accounts if you believe you are not caught by IR35 and deal with HMRC accordingly. It is going to be very interesting over the next year whether these rules will be extended to the private sector. It was heard that Theresa May wanted to get “her own house in order” before embarking on the private sector. However, with the pending Brexit issues on the horizon will she shake up the contractor market or will the billions of pounds this will raise for the very empty coffers cause her to steam role this through like her other initiatives against tax avoidance. We are also expecting Matthew Taylor’s (Chief Executive of the Royal Society of the Arts) report who is leading the review to consider how employment practices need to change in order to keep pace with modern business models. The review will consider the implications of new forms of work, driven by digital platforms, for employee rights and responsibilities, employer freedoms and obligations, and our existing regulatory framework surrounding employment. This report is expected next month and will make interesting reading. Watch this space. For further information, contact: Lee Manning 020 8418 2662 lee.manning@raffingers.co.uk
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Upcoming Events Register with: lauren.aston@ raffingers.co.uk.
How to Make Your Business More Efficient 18 Jul 2017
6:30pm-8:30pm | WeWork Spitalfields, 1 Primrose St, London EC2A 2EX If you want your business to work smarter and faster, cloud accounting software is a wise investment. Join us to find out:
• How you can reduce the time you spend on your accounts and bookkeeping • How you can save time by: taking pictures of your receipts, visualising your data - allowing you to spot trends instantly (such as who your best recruiter is) - and automating many of your admin processes • Why cloud accounting software will be instrumental in making you compliant with Making Tax Digital (MTD) and to your continued success
Property and Tax Update Autumn 2017
Ealing & Hammersmith This event is for all landlords. Following on from our successful partnership with Winkworth last year, we will be holding another Property and Tax event to update you on: Wear and Tear Allowance, SDLT, Loan Interest and the benefits of Incorporation and Management Companies. We will also use this event as an opportunity to provide guidance on MTD, which will affect landlords and how you report your rental income in the next few years.
23 Nov 2017
New Service Launch 6:30pm-8:30pm | WeWork Spitalfields, 1 Primrose St, London EC2A 2EX Join us for the launch of two new services:
• System Improvement - As businesses grow they often become overburdened and inefficient processes begin to creep in. To ensure you are running the most efficient business possible, we will review all of your processes and suggest improvements to make them more effective • Masters in Business Advancement (MBA) - For start-ups and high growth businesses we give you the opportunity to attend our MBA programme. A twelve month course comprised of monthly meetings, which will guide you through all of the essential topics needed for business success, including marketing, finance and employee matters (HR). Through case studies and guest speakers we will give you and your team the tools to run a highly successful and growing business
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Registered Charity Number: 1171885
Charity Ball 2017 Saturday 16 September | 6:30pm-12am | Black Tie Waltham Abbey Marriott, EN9 3LX Tickets: £75pp or table of 10 for £700 Sponsorship Options: Charity Ball Brochure
£75 half page advertisement £100 full page advertisement - 9 LEFT £150 back page advertisement - SOLD £125 inside front cover advertisement - SOLD £125 inside back cover advertisement - SOLD
Raffle/ Auction
We are in need of Raffle and auction prizes. Anyone who donates a prize will be mentioned in our Charity Ball brochure given out to all 200 attendees. Raised so far
To sponsor our Charity Ball or to book your tickets contact lauren.aston@raffingers.co.uk.
Raising Funds For: Your Business Our Passion
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Cover That Protects You Many directors invest considerable time and resources in protecting the assets and liabilities of their limited companies. However, some do not realise that they also incur unlimited liability for their actions in connection with the business.
Employee Spotlight In this slot we introduce you to a valued member of our team, allowing you to put a face to a name. This quarter we speak to our Cloud Management Accountant, Imran Shahzad.
Name: Imran Shahzad Email: imran.shahzad@raffingers.co.uk Career: I was working in retail when one day me and my friend were discussing where we both see ourselves in 10 years’ time. This discussion got me thinking and shortly after I took on a voluntary position at a local accountancy firm. After only working there for three days voluntary, they offered me a full time paid position. This gave me confidence, as I thought I must have some kind of talent, and I started my ACCA qualification. After working at the practice for a few years, to further my experience I moved to Raffingers in 2016 as a Cloud Management Accountant where I am helping clients with their reporting and showing them how they can access more from their finances. I still have four ACCA professional exams to complete which I am hoping to achieve by March 2018. Interests: I have a soft spot for Chelsea and enjoy watching cricket. I also like to keep myself active and regularly hit the gym. I would love to travel more and am hoping to visit Australia at the end of 2017. Partners Report: Imran has been a pleasure to work with since he started and has delivered a huge amount of support to our clients using Xero. He is our management accountant guru and has got to grips with our new forecasting tool, which helps clients manage their finances in a systematic way. 10
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Being a director, partner or officer of a company brings with it certain responsibilities – towards your employees, customers, stakeholders and members of the public, explains McFadyen. “If you are accused of misconduct, you are personally liable to defend the claim – and if you don’t have adequate cover, your personal assets are potentially at risk too.” Directors and Officers (D&O) liability insurance, also known as management liability insurance, offers financial protection by covering the cost of claims brought against an insured individual. “A common misconception is that alleged misconduct by directors or companies is covered under other liability policies such as Professional Indemnity,” he adds. “Another is that you only need D&O insurance if you run a publicly traded or very large business. This is not the case. SMEs are just as vulnerable and face exactly the same risks and regulations as their larger peers, but often do not have the support of in-house HR or legal teams to fall back on.” In an increasingly litigious society, employment practice claims such as wrongful dismissal or sexual harassment can result in astounding settlements. For example, an engineering company was recently ordered to pay an employee £50,000 for failing to follow a fair dismissal procedure. Your investors also have the right to sue if their shares lose value as a result of a director or company’s alleged misconduct. When you consider the cost of defending, legal action can often run into the tens of thousands of pounds, the number of SMEs still without D&O cover is surprising. Some regard it as an unnecessary expense on top of other insurance costs, yet D&O claims are not covered under any other policy. However, the good news is that D&O insurance is more affordable than ever with policies costing from as little as under £500 per year. For more information, contact Ian.Mcfadyen@ bernsbrett.com or visit www.bbicover.com.
What Data can I use, Share or Keep?
For several years, the Information Commissioners Office (ICO) has been on the tail of all businesses, organisations and individuals, to ensure that they protect all sensitive customer data. Now with information rights at the top of the government’s agenda, what are the rules for agencies who retain information? The Data Protection Act is the main piece of legislation which governs the way personal information is used by organisations, businesses and individuals. The act safeguards two main forms of ‘personal data’:
• Information processed, or intended to be processed, wholly or partly by automatic means (e.g. on a computer); and • Information processed not by automatic means which form part of, or are intended to form part of, a ‘relevant filing system’ (i.e. manual information in a filing system). The ICO emphasise heavily the importance of client data and being that recruitment agencies come into contact with sensitive information sent in by thousands of individuals every day, understanding the act is essential.
What Data Can I Use? Many have the misconception that because information may have been given to a party, that they have the right to use it. The government has released a code of practice which agencies should keep in mind when dealing with data:
• All data is fairly and lawfully processed • You have a legitimate reason for processing the data and have obtained the data for one or more specified purposes • You do not hold more personal information than you need for your purpose • Data is accurate and kept up-to-date • You do not keep the data for longer than necessary • You ensure that the rights of the individual whose data has been collected is respected and abided by • Data is kept securely and protected from loss, destruction and damage • You do not share data outside of the EEA unless that country ensures an adequate level of protection
Recruitment agencies come into contact with sensitive information sent in by thousands of individuals every day, therefore understanding the act is essential. Therefore, when collecting information about your clients or candidates, it is important to specify:
• What their personal information is being used for
• What marketing and mailing lists they are being subscribed to • Whether their information will be shared with third parties
What Data Can I Keep? You do not have to make the party aware that you will be keeping the data, however you will need to make them aware of the use of the data. If, however, the data has a time stamp, it is important that you do not use the data after this time or you make the individual aware of the use of it.
Sanctions The crackdown of misuse of data is on the rise. The ICO have the power to sanction businesses who fail to comply with legislation. Regulatory action can include; criminal prosecution, civil monetary penalties, noncriminal enforcement and, in some circumstances, an audit.
Adam Moody 020 8418 2683 adam.moody@raffingers.co.uk
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The UK Recruitment Index 2016 APSCo and Deloitte
Biggest Challenges
In the UK Recruitment Index Report from APSCo and Deloitte, over 200 recruitment agencies surveyed gave their views on the upcoming challenges and priorities for the year ahead. The fourth annual UK Recruitment Index found that the majority (79%) of recruiters saw Net Fee Income (NFI) increase over the last 12 months despite widespread staffing challenges. This was the second highest increase in NFI since the survey started.
Maintaining or improving profitability 50%
Growing headcount 61%
Achieving financial growth
This growth came as government data confirmed that the recruitment sector continued to grow in size. ONS data shows that there were 24,000 recruitment businesses in the UK in 2015 – an increase of 14% since 2014 and double the growth rate seen between 2013 and 2014.
57%
The survey also revealed continued strong demand for candidates. Regional analysis shows that this was highest in London where 72% of businesses rated demand as strong (51% said it was very strong).
Developing a strong management team
The main issue impacting the growth of UK recruitment businesses was access to talent with 61% of respondents citing growing headcount as their main challenge. The report concludes that, to continue to grow, recruitment businesses should consider three trends that are likely to impact demand for talent in the future: the increasing use of technology, automation and an increasingly flexible workforce.
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Retention of talent 42%
22%
3 Key Themes That will Impact Talent
1 Greater use of technology
Thought About Investing in Your Own Company? Investing in their own company is an option many agency owners choose to take, not only because it saves on their business costs, but it can generate tax-efficient income too. If your agency needs a cash injection or is looking to borrow, you could consider: Investing via your personal savings
Important Factors for Growth Access to new recruiters 68% - Very Important
Lending your company money via your savings account benefits both you and your company. This is because if your company is borrowing or plans to borrow in the future, annual interest for an arranged overdraft starts at around 5% for low risk companies, but for small businesses, especially start-ups, the rate can easily be double that. In addition to these costs you need to take into account arrangement fees and bank charges, which easily add up. Therefore, instead of your company borrowing from a bank, what if it borrowed from you? It is possible to set up your savings account as an overdraft facility for your business. This means you can then charge your company interest which can be equal to the total of bank charges, and so long as the amount is similar, HM Revenue & Customs (HMRC) will not object. How this works
Staff training 63% - Very Important
Use of social media 40% - Very Important
New technology 39% - Very Important
2 Automation
3 Flexible workforce
For tax purposes you will enter into a “loan relationship” with your company. The interest you charge will not be directly deductible from its profits, which does limit the situations when interest can be deducted, but as long as your company makes a taxable profit there is no problem. It also means that instead of your company paying interest to a bank, it pays that interest to you, whilst saving corporation tax (CT) on the interest it pays. The interest you then receive is classed as savings income and taxed the same way as interest paid by a bank. This means it qualifies for the savings zero rate band (savings allowance (SA)) of £500 for higher rate taxpayers and £1,000 for basic rate payers. If you are not currently using all of your SA, then lending to your company will be especially tax efficient. It may also be possible to take advantage of the 0% starting rate of tax that can apply to savings income of up to £5,000. This rate can only be obtained when “non-savings” income, such as salary, pensions, rental income etc. is within strict limits. To find out if investing via your savings account is feasible for you and your business, contact suda.ratnam@raffingers.co.uk.
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BLOG
Are you Using These Five key Business Reports to Grow Your Agency?
Technology has advanced so much that long gone are the days when all you can generate is a profit and loss report (P&L). Although essential for the success of any business, there are now so many more business reports you can run and consequently more insights you can get into your organisation, that it is criminal not to make use of them. Below are the five key reports I recommend for any director looking to grow or have a tighter handle on their business’ performance.
Operational Forecasts Where do you see yourself in two, five or ten years’ time? Accurate and up-to-date forecasts enable you not only to visualise your business’ future, but will show you what is attainable and will help you to develop operational and staffing plans geared towards your future goals. Running a business is never plain sailing and it is impossible to predict every eventuality, (Brexit anyone?!); however, having an accurate forecast in place enables you to build in contingencies and keep your business protected as best as you can. The ideal way to achieve this is to forecast weekly. This will enable you to constantly tweak your forecast to reflect the current market, new competitors and peaks and troughs in your business.
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Where do you see yourself in two, five or ten years’ time? Three Way Forecasting Your business needs so much more than a P&L report. Although this gives you a great indication of how your operations look, it does not show you clearly the relationship between the P&L, balance sheet and cash in your business. Profitability does not always equal cash. You need to know when your cash inflows are. Through seeing these three key points visually you can achieve more advanced insights, such as whether your receipts exceed your payments and single out costs that are eating up your profit. The key cause of business failure is not having enough cash in the business. These forecasts enable you to see how sustainable your business is and give insights that basic P&L reports simply cannot do.
Scenario Planning If you are looking to grow, what is the best way to do this? Should you take on a new employee? Should you increase the services you offer? Do you have the
capacity to grow into a different region? Scenario planning enables you to see into the future. For example, taking on employees is a gamble, yet with scenario planning, you can see when the best time is to hire and how many people you can realistically hire without stretching your cash too far. Whatever ideas you have, scenario planning helps you to see if they are worthwhile and achievable before you commit time and money into putting your plans into action.
What-If Scenarios What-if scenarios allow you to tweak different variables and elements of your business to measure your performance. As with any business, there will come a time when you need to make a difficult decision; what-if scenarios can provide you with clarity on the options available to you now and how your business will be impacted depending on which option you choose. For example, if you are negotiating prices of your stock, you can create multiple scenarios to see how your profit will be affected. You can even see how your business will be affected by sales remaining steady, projected growth and projected loss. Through access to this data, you can be confident in your business decisions.
Alerts It is all well and good having up-to-date business
reports, but you need to ensure you are tracking them and using them to benefit your business. Alerts are the best feature of reports that can keep you focussed and ensure you do not miss any negative impacts or opportunities. On all reports you can set alerts that notify you when something significant happens, for example if you are over trading and are not getting enough cash in. Something all businesses need to take more control of if they wish to succeed. In this instance, you can set up alerts for cash and get notified if your bank goes below a set level or if any costs increase. Through alerts you can be confident that your business is protected and you will have enough time to respond should you get into difficulty. If you are serious about growing your business, there is no excuse not to have up-to-date reports. There are now countless pieces of software that can help you achieve all of the above, such as Futrli, allowing you to set up reports and forecasts without taking vast amounts of time to do so. To start building reports for your business, contact: Andrew Coney, Partner 020 8418 2710 andrew.coney@raffingers.co.uk
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