The Fixed Asset Register is quite simply a record of the chunk of a company’s assets that constitute its ‘fixed’ assets; fixed is the term used to describe assets which cannot easily be converted into cash and are not held for the purpose of selling them on; assets that are owned to enable a business to function, either to provide a service or produce a product; in the case of manufacturers it is usually machinery, land, property etc. and for service providers, equipment and premises; it can also include less tangible assets such as copyrights, patents and trademarks.

The reasons for the existence of an individual register of this kind are many; the Government’s interest lies mainly in always knowing the value of a company’s fixed assets for taxation purposes, hence the legislation, but there are other benefits to knowing the separate costs of such assets not least for the purposes of a company’s insurance.

However this record is not a simple list, it collects very specific data in a precise and detailed way and the way that it is recorded can tell those who understand FAR a lot at a glance. In addition to detailing the nature of a company’s fixed assets, the bookkeeper must account for loss or impairment of assets as well as logging the ongoing condition and changing value.

Keeping track of the exact origins of large assets can be problematic for the person keeping the records, as it can involve physical verification, which, as the name suggests would mean physically finding and visiting each piece of equipment or building to confirm its existence and location; most bookkeepers therefore ‘tag’ each asset in the register with an engraved alpha-numeric identification number to make tracking simpler; of course in the case of land and vehicles there will conveniently already be independent registration numbers.

Part of the recording process includes logging the assets’ value in the form of an assigned ‘carrying cost’, in order to do this a valuation has to take place; the carrying cost is usually set at either the current market value, the potential sale or realisable value or the distress sale value, which basically refers to an asset’s scrappage value.

Most bookkeepers and accountants who have the task of maintaining the Fixed Asset Register do so nowadays with the help of specially designed computer software; these programs can produce reports on demand and collate large amounts of information. Although they do not necessarily make the job of keeping the FAR up to date a simpler one, they certainly can make it less time consuming, which in turn helps with the accuracy of these important and required records.

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A vital balancing act takes place in order to minimise holding costs, whilst ensuring that stocks of sale-ready products do not run low and this balancing act involves everyone from the stock controllers and purchasers to the marketing department. Sales forecasts from the marketers help the purchasing department estimate what stocks of raw material to buy in, but everything from seasonal variations to unexpected demand can send this sort of careful planning in to mild chaos.

Although most companies will keep extra stock in to prevent running short, not all industries allow for this possibility and the stock control dance becomes even more delicate. Those manufacturers who produce perishables for instance cannot necessarily sit on large quantise of either ingredients or finished product, as the life of their product may be limited.

Getting your stock control system wrong can result in expensive overstocking, or ‘stock-outs’ where you cannot meet customer demand. Overstocking will mean having to find money to pay for warehouse space to store stock as well as insure and secure it all of which could result in cash flow issues. Allowing raw materials to run out could result in having an idle workforce or loosing customers who may reach out to a rival supplier for help and give their business to your competitors.

If you are a small business the issues of stock control become even more significant and yet even more difficult; cash flow is of course important to all firms, but to a small business a cash flow crisis could mean its demise. The small business relies on its customer base for survival and having to close its doors for any length of time could result in a loss of hard won customers that again could majorly damage trading.

In these days of technological wonder it is probably wise, regardless of your size, to utilise a computerised stock control system that can keep track of every stock stream at once and product almost instant reports for the various departments that need them; these systems can also help the small business owner to run complex stock control without the help of others.

There is no one single method of stock control, rather, there are many, with a few standing out because of their common use and general success, and it is choosing the right method for your business that is the key to making stock control work for you.

Whether you opt to use a popular system of stock control or one you have devised yourself it is important to make a decision early in the life of your business and stick to it, most disasters can be prevented by being consistent and following through with your plans.

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Choosing the best bookkeeping service depends on the size and the type of the business and there are a number of options that are available. Some business owners may be willing to input the basic information into a computer by making use of bookkeeping programs such as Quick Books or Sage and others may just collect the receipts and the bills and take them for processing to their accountant.

Therefore, choosing the best bookkeeping service greatly depends on how much you are willing to do yourself for the business and on the level of service you need.  There are business owners who use a full service bookkeeping service, while others prefer to use such a service only for taxes and payroll.

When you choose the bookkeeping service for your business, you should try to get one which suits your particular type of business or industry. For instance, there are specific accounts packages for doctors and letting agents. Therefore, if you are looking for a full bookkeeping service for these types of businesses, it would be a good idea to find a bookkeeper or accountant who specialises in these industries. Furthermore, it would be sensible to also check whether the bookkeeper or accountant have adequate personnel to help you whenever you have questions. You will have to establish from the beginning if they will come to your location or if they will be downloading all the information from your computer and processing it back at their office. Indeed, where you prefer them to undertake the bookkeeping will depend on the space and resources you have available, as well as practicalities of being available to answer any immediate questions any service provider has.

Recommendations are a great way to find a reliable bookkeeper and bookkeeping service. Ask friends and family or business colleagues who they use, as they will hopefully be able to give you an honest opinion. Any bookkeeper you choose should have a good grounding in accounting standards and basic tax laws. Most importantly you will need to feel completely comfortable when discussing the finances of your business with them. There is nothing worse that ‘frozen communication’ between a bookkeeper or an accountant and a client.

The best bookkeeping service for you and your business is one where the bookkeeper is honest, dependable, understands your business or industry, understands the fundamental accounting and tax treatments for transactions, and is able to communicate efficiently and effectively with you in a comfortable manner.

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A good management accounting process is one that helps to tackle four key aspects of a business:

1. Planning
2. Directing
3. Decision Making
4. Controlling

The following are ways in which management accounting can help a business:

• It provides accurate information related to the budgeted and actual figures, thus enabling the managers and business owners to take proper cost controlling measures.
• Provides timely feedback related to current operational activities, therefore helping in reassessing the operational decisions and gaining better control over the activities of the business.
• Assists in measuring the performance of various departments and sub- units within an organisation. This information can then be used to identify and reward the better performing departments and employees. For example, a certain employee may be responsible for higher sales figures than expected and as a result you may choose to promote him or her to oversee the other sales staff.
• Helps management or owners do a complete 360-degree analysis of the organisation. In this sense the management accounts can provide very useful information when looking at the business plans of an organisation and when carrying out any SWOT analysis (the Strengths, Weaknesses, Opportunities and Threats facing a business).
• Identifies profitable and non-profitable products or services. For instance, this can help speed up process of discontinuing a certain product that is making a loss and this in turn will can save money.

Management accounting not only covers financial records but can be applied all over an organisation’s activities to identify areas where things may be going wrong and need improvement. It is a vital tool in helping businesses achieve their goals and for streamlining any processes which are inefficient.

Management accounting should not be seen as something just larger businesses need to do. Any business, no matter how big or small should prepare some form of management accounting information, even if it is just written down on one piece of A4 paper. Management accounting can give you a “snap shot” of how your business is performing throughout the year. It will allow you to compare your actual performance with the expected performance, help you make improvements to your business and streamline your future plans.

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All businesses have a life span, and all move from their inception through various phases until they either end or are converted into different entities entirely.
For most business owners, their relationship with their business will also have a natural duration, from the time that they acquire or start the business to the time that they close or sell it, but for a family run firm there is often something else going on that puts a whole new spin on things. Sometimes the business has been handed down through many generations, from parent to child perhaps, and often the expectation is that this legacy continue in the same vein for further generations to come; because of this emotions often run higher in a family run business than they ordinarily would, as far more than simple time and money is invested in the venture’s success.

To add to the emotional mix, we quite often see family members working along side each other, day in and day out, spending their entire working lives in very close proximity to their nearest and dearest; this, of course is sometimes the strength of family run firms, but it can also be a volatile cocktail.

However hard it may be, it is therefore, quite sensible to attempt to emphasise the ‘business’ part of the family business and try for a more professional work environment.

There are a few things that can be very effective when endeavouring to run your family business with less domesticity:

Work/Home Divide

Even business owners who don’t work with their families can have trouble with this one, but, if you are employing relatives or working alongside a partner or child, having a time and place for domestic matters and a separate one for professional can be a life saver. No matter how easy it is to carry on the row from breakfast during your working day, it is incredibly important to save it for after your working hours, and conversely don’t expect to sit around the dinner table and have an informal staff meeting, a family life that is kept just that will provide a refuge from the stresses of work.

Formalise It

Just because your manager is your sister or your payroll clerk is your cousin, it does not mean that they should be working without the protection and benefits that other staff usually enjoy. Having contracts in place will give you all a professional document to act as an inanimate intermediary should problems arise.

Outside Assistance

Although it is tempting for many reasons to staff every role in a family business using family members, it can be a useful tool to employ specialist help for roles requiring particular know-how; not only will it mean that you don’t end-up with an unqualified relative struggling with a job that they are not fit for, but it will also bring in non-family members to redress any bias the business could be suffering from.

There is obviously a certain strength in family firms that allows so many to thrive for generations, but this type of working is not for everyone and for every family business success story, there is a tale of the child who went his own way and upset the apple cart. It is therefore worth remembering that just because Grandma made the firm a success does not mean you automatically can; just as with any other business, the family business will only succeed with plenty of hard work.

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Market research is an approach for gathering data related to products and services. One of the major reasons for conducting market research is to determine the success or failure of a product or service. In other terms it can be considered as a precautionary measure which can be used to forecast the potential of a new product or service.

Good market research is usually undertaken with the following 3 step approach:

1. Plan
2. Gather
3. Analyze

Proper planning should be done before starting any market research, which should include well-defined objectives, the actual purpose for conducting the market research, what kind of inputs need to go into the research and who will be responsible for it. Once a formal plan has been finalised you can move on to the next step of information gathering.

Information or data gathering can be done in many different ways, depending on the product or service for which the market research is being conducted. Some of the most common ways of gathering information for this purpose includes:

• Questionnaires
• Surveys
• Interviewing experts and common consumers

You can choose the best method depending on the type of market your product is intended for. For example, if it is an online product, the focus should be geared to Internet based users and information gathering techniques like online questionnaires and surveys need to be used.

The final step is to analyze the information or data which has been gathered. Well-gathered information should be able to clearly answer the following questions:

• How would the product benefit the customer and the company?
• Who are your competitors?
• What type of advertising strategies could be used?
• In what way is your product or service better than those already available on the market?
• Who is the target audience for your product or service?

Once all these questions have been answered, you should have a clear understanding of the customers’ preferences. Therefore, you can then start deciding on your launching and pricing strategies and how to position your product or service in your chosen market place.

A well-organised and well-planned market research campaign is a crucial step to take when evaluating your product and service and its potential impact on the market place. It can give you external intelligence as to what your potential customers require, what they are prepared to pay and what competition you will be facing, among other things. However, like all other aspects, any market research needs to be planned properly with major emphasis on the best ways to gather and analyse the information you are after.

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We are all now far more aware of how to do the best for our planet; we understand that our resources are dwindling and even if we are not wholly green, most of us do our bit to separate plastic and paper from the rest of our refuse. Bottle banks have now been around for so long that the very idea of putting glass in with your household waste is a strange and ancient philosophy from another time.

The business of recycling is booming and many commercial enterprises have sprung-up to profit from the world’s desire for change. With specialist recycling companies making money out of the re-use of stuff otherwise destined to be land fill. Other businesses have realised the fashion for all things green and have developed new and artistic products using our rubbish.

The manufacturing industries are just starting to realise that there is profit in their waste, with the many by-products of manufacture now being sold on to others as products they can use, and everything from precious metals extracted from used car parts to gypsum from old plaster board being used to create new cash streams.

Setting aside the obvious need for the planet to recycle what limited resources it has left and the fact that most of us, especially in the business world, could probably do more to help; there are other very good reasons why businesses should look at recycling, not least because of the tremendous savings that can be made by being more sensible about waste.

However, do not think that it is only big industry that can turn their wasteful practices into revenue. All businesses even the smallest can make a saving by adopting greener working habits.

If your business sells a product that can be refurbished, reused or recycled or contains a salvageable material, then it might be possible to set-up a customer part exchange program, allowing them to return their used product for a saving on a replacement; this of course has the added benefit of keeping your customers returning to you for new business, as well as the money you can make from the scrap.

If you are in a service industry, examine areas of waste that will bring your overheads down as well as reducing your carbon footprint. Most business use far too much paper for instance, but rather than simply putting used paper in to a recycling bin why not research the various ‘paperless office’ systems now available. Moving to new technologies will enhance your business in other ways too.

All businesses could look at their transport policies to see if savings could be made and encouraging staff to get involved with car shares etc. will enlist the help of the whole business in your money saving activities.

Along with the obvious warm feeling that doing the right thing for the planet will bring and the extra streams of revenue or significant savings to overheads, trying to be greener also has the unavoidable knock-on effect of making your business more attractive to customers by improving its profile. It is after all good to be seen as a caring business in a world where business is very rarely viewed this way.

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Customers play the most important part in any business, be it big or small. Thus providing good customer service becomes very crucial for a company’s success. A successful company is one that provides the best service in terms of continued customer support. One challenge that every customer support professional faces is dealing with customer complaints. Handling customer complaints has always been a challenge, but when armed with the right kind of tools and staff this becomes more of an advantage than a challenge.

Three very common mistakes made by the customer support professionals when dealing with customer complaints are:

• Not listening to the customer’s complaint.
• Not armed with adequate knowledge or information.
• Not being courteous and polite to the customer.

Listening is the key to dealing with many business problems, and the same holds true when dealing with customer complaints. Jumping in to give a solution without properly understanding the problem tend to lead to more confusion and customer frustration. So listening and understanding the problem should be the first step when tackling customer complaints.

Customer care staff members are the first line of defense, so make sure they are properly trained and are well informed about the product or service the business offers. A well-planned training program needs to be put in place to achieve this. Also make sure the working environment is as stress- free as possible. Organizing regular stress management programs will help them tackle customer complaints more effectively.

When you talk to customers make you deal with them in a professional and appropriate manner. Be courteous, polite and kind while dealing with their complaints. Apologising tends to calm down even the most irate and frustrated customers. Also remember to thank them both before and after the problem has been dealt with.

Finally, do not see a customer complaint as a purely a ‘negative point’ for the business. Look at them as a challenge for improving the product and service which is being offered. Also see complaints as a chance for you and your staff to get to know your customers better. Treating every customer’s complaint in the proper manner will hopefully bring them one step closer to being loyal to your business.

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VAT (Value Added Tax) is a consumption tax levied by the government on most goods and services and is normally calculated as a percentage of sale price charged by the seller to the customer. It is mandatory for a VAT registered supplier to issue a VAT invoice their customers.

A ‘typical VAT invoice’ can be broken down in to three separate sections. The first section should include the following,

• A unique invoice number.
• Business name and address.
• Business VAT registration number.
• Date of sale (will usually become tax-point date of transaction)
• Name of the customer or client.

The second section should contain,

• Name of the goods/services purchased and description where appropriate.
• Quantity purchased.
• Unit price.
• Discount given (if any)
• VAT rate charged

And finally the third section should comprise of,

• Net amount, Vat amount and Gross Amount of the Invoice
• Payment terms/Due date for payment

The backside of an invoice can also be used to detail the ‘terms and conditions’ of the sale and can normally include clauses like ‘goods once sold cannot be returned’ etc. Alternatively, you can use the backside to advertise new products and services, promotions or any other information that may be useful to the seller.

As an invoice is a legal document, the ‘copy invoice’ should be stored safely.  The seller should also maintain an invoice daybook in order to record the details of all the invoices issued. Indeed, tax officials or auditors may require the copy invoices and daybooks.

Since the VAT is ultimately passed on to the customer from the manufacturer or distributor, it is the right of every customer to demand for a vat invoice if not provided by the seller.  A VAT invoice holds legal value and so the seller should also be very careful when issuing it and ensure it contains correct and accurate information.

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Creditors all work in different ways and examining their terms is as vital as setting your own carefully when extending credit to your customers. Although creditors such as utility companies will employ very standard terms, where a monthly bill is followed by expected payment, vendors will vary considerably in the terms they offer.

Getting a handle on the area of ‘accounts payable’ is something that you may want to have a chat with your accountant for, but whether you choose to pump a professional for advice or look into it on your own, it is an area that you do need to understand to run your business smoothly.

You may be presented with terms such as ‘within 30 days’, which is pretty self explanatory, more confusing however could be ‘net 30’ or ‘2/10 net 30’. You would probably have a stab at guessing that ‘net 30’ means the same as ‘within 30 days’ and you’d be right, but ‘2/10 net 30’ seems more cryptic. The numbers may vary, but the meaning of the format stays the same; breaking these terms down, the 2/10 part refers to a discount for early payment, put simply, the first number, in this case 2 is the percentage discount you are being offered if you can pay within the second number (here 10); the ‘net 30’ is as before, so that the terms are ‘pay within 30 days, however if you pay within 10 days you will receive a 2% discount’.

In large businesses that run a separate accounts department, it is rarely a single individual who is responsible for paying bills; this is often, quite rightly, the recommendation of the business’ accountant who will suggest that to prevent fraud and/or theft more than one person should be involved, with different stages of the payment process falling to different members of staff; this will inevitably slow the whole bill paying process down considerably and so make it unlikely that they would be able to take-up discount offers for early payment, also with more than one individual involved such discount offers can get lost in the mix. With a small business however, where it is often the business owner themselves who pays the bills, taking advantage of such savings can make a huge difference over the course of a year.

Becoming familiar with the sort of terms offered will not only allow you to take advantage of valuable savings, but it will help you know what terms you can be expected to offer your customers in return.

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