Course Contents Course Introduction What will you ‘take home with you’ today?........... 1 LESSON 1 Accessing MyBusinessWorks Managing your subscription and getting help...... 4 LESSON 2 Business planning Part 1 Business planning with LivePlan.............................. 6 Part 2 Starting a business plan with LivePlan................... 7 Part 3 Working with Financials............................................. 8 Part 4 Planning your marketing.......................................... 10 Part 5 Additional tools in LivePlan..................................... 11 LESSON 3 Legal compliance Part 1 What are the key benefits of Legal Manager?...... 13 Part 2 What common compliance issues can Legal Manager help you with?............................. 13 Part 3 I have just taken on staff. What do I need to do? .................................................. 14 Part 4 How do I comply with health and safety legislation................................................... 16 Part 5 Getting started with your Legal Manager............. 16 Part 6 List of topics covered................................................ 19 LESSON 4 Training and development Part 1 Why is training and development important?..... 27 Part 2 Getting started with Mindleaders......................... 27 Part 3 What are the key business skills you need?......... 28 LESSON 5 Web Builder - Moonfruit Part 1 What is Moonfruit?.................................... 31 Part 2 Getting started with Moonfruit......................... 31 Part 3 Customising your site ………………………………………….. 32 Part 4 Support for your site ……………………………………………… 36 LESSON 6 Data backup Why is it important to back up your data?........... 38 What is mozypro?...................................................... 38 Your mozypro.............................................................. 38
LESSON 7 Financial management Why is financial management important?........... 44 Part 1 Getting started............................................................ 44 1 Signing up............................................................... 44 2 Setting up your details......................................... 44 3 Dealing with VAT............................................................. 45
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4 Help and support................................................... 47 5 Introducing the Chart of Accounts................... 47 6 Adding a new income or expense account..... 49 7 Creating a new bank account............................ 50 Part 2 Money in...................................................................... 51 1 Setting up customers........................................... 52 2 Invoicing.................................................................. 53 3 Sales receipts......................................................... 58 Part 3 Money out................................................................... 61 1 Setting up suppliers.............................................. 62 2 Supplier bills........................................................... 62 3 Expenses........................................................ 67 Part 4 Banking........................................................................ 68 1 Bank transfers........................................................ 68 2 Bank reconciliation............................................... 69 Part 5 VAT and reporting...................................................... 72 1 VAT returns............................................................. 72 2 Accounting reports............................................... 74 Getting started Checklist........................................................77 Troubleshooting Technical troubleshooting tips.............................................. 78 Glossary Glossary of common business terms.................................. 79 Appendix Your MindLeaders training and development plan.......... 82 Notes................................................................................................. 83
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Course introduction Key reasons for business failure vary, from poor planning to bad debts, access to funding, lack of business management and IT skills, and of course, red tape and regulation. Conversely, key factors to business success include; good financial planning and business management including managing customers, suppliers, stock and assets as well as continuing to market your product and service and adapt to changes in your environment. MyBusinessWorks includes a number of different applications to help ensure you can meet each of the success criteria outlined above. This workbook is designed to help you understand why each application included is vital to business success, what each of these applications can do for your business and how to get started with each of them.
What will you ‘take home with you’ today? 1. The confidence to activate and get started with MyBusinessWorks - including how to get around MyBusinessWorks to launch your applications, manage your subscription and get help. 2. The ability to set up your company in Sage One - input vital data such as customers and suppliers, items, and VAT codes, enter invoices, and receive customer payments. You will also understand how to create various receipts, file your VAT return and access useful reports. 3. The knowledge you need to create a business plan that suits your needs and resources, which shows you predicted financial information using tables. 4. The ability to create your own training and development plan that you can complete, in your own time at a pace to suit you, using Mindleaders. Evaluate your own needs against those recognised as crucial to success by a number of leading Business Support Organisations. 5. An understanding of the main compliance areas and how Legal Manager can help. Create your own personal checklist which covers the areas you need to get compliant with now. 6. The knowledge to back up all your business critical data using Mozy Pro. By utilizing the automatic back up feature you will have comfort in knowing that your business information is protected against loss. 7. How Moonfruit could help you create a professional looking website to promote your business online using easy to follow wizards and templates.
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LESSON 1 Accessing MyBusinessWorks Once Activation has taken place you will be able to launch the Applications included within MyBusinessWorks by going to the following URL www.mybusinessworks. co.uk/barclays To logon you must enter your email address and password.
The MyBusinessWorks Dashboard will appear. From this screen you can launch the Application you wish to use
Managing your subscription and Getting Help Get answers to your questions about MyBusinessWorks: - Click on Help at the top right corner of your screen to access Troubleshooting support - Send an email to Customer Support,
[email protected] or give them a call on 0845 6080 280
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For additional services you can purchase these through the MARKET Tab:-
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LESSON 2 A business plan is a strategy document which defines where your business is going and how it intends to get there
Business planning Why is a business plan important? Business planning is important for all businesses, not just those starting out that need funding. It is crucial for helping you manage your business effectively and helping you set realistic goals and objectives that you can measure your progress against. Business plans are not just useful at critical moments; they also have a role to play in everyday business management. It can be difficult to justify spending time on a business plan when there are client demands, tax returns and various other daily tasks. But it is a crucial document. A business that doesn’t have a clear idea of what it wants to achieve will find any plans difficult to follow, and could have an unstable financial structure. This could affect long-term business prospects and possibly lead to business stagnation or even bankruptcy.
How can a business plan help your business? A business plan is a strategy document that helps you define where your business is heading and how you are going to get there. It is normally a long-term vision over three or five years. The plan itself is a useful tool to benchmark your progress and you should try to review it every three months. But the process of making the business plan is also a valuable tool. It gives you the chance to analyse the resources you have and find any shortfalls or risks. You can then work out how you can fill those gaps, and look at the market you want to compete in, both now and in the future. When you draw up a business plan it forces you to think about, and prioritise, the objectives for your business. It also commits you to a certain road and helps you to stay on it. In your business plan, it’s a good idea to add a section relating to your marketing ideas and plans. This will help you to see how much it will cost to promote your business and how to recoup those costs. By focusing on the marketing element of your plan, you can think about the budget you have and the best type of marketing for your business. Finally, it is also a good idea to think about the time when you want to leave your business. It may seem strange to think about this when you are just starting out but it can help you make important decisions. A well written business plan can highlight the opportunity for potential buyers or investors when you decide to bow out.
Why do you need a written plan? Like anything else, if your business plan is in black and white you cannot pretend it didn’t exist three months ago. If your plan didn’t work then you need to acknowledge it and find out what went wrong, so you can see what changes you need to make so that your strategy works. By writing your business plan and thinking about how it looks to an outsider, you will need to answer questions you may have wanted to avoid or had not thought about before. It is easy to become distracted by new business opportunities. But a business plan means you can compare these new opportunities against your original goals. You can then work out if these opportunities will help you achieve those goals. If not, then leave them for now and go back to them later. Don’t try to do everything at once. If you need to produce a business plan for someone else later on, having it there already will make it easier for you to produce what that person wants. The fact that you already have the document will also make you look more credible.
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Can you cheat? You should never fiddle your figures – regardless of who will or won’t see your business plan. It may be tempting, but investors and bankers can see through a bluff. Even if they accept the figures, you will need to deliver against your unrealistic targets. A business plan will only work if it is grounded in reality.
PART 2 Starting a business plan with LivePlan In this session, you are going to create the financials for a fictional café start-up company. It doesn’t matter whether you are a start-up or an established business: you can apply the skills you learn in this session to whatever business plan you create. Access your plan from the Live Plan (Planning) Tab within your MyBusinessWorks Home page and then you will come into a screen that encourages you to start your new plan.
Set up To get started you will need to create a plan name. This is normally your business name, as it will appear on each printed page of your plan. You will then need to answer questions about your business type and business stage.
Using examples in your plan Once you’ve set up your plan, choose ‘Company’ from the task list on the left-hand side of the screen and click ‘Company Overview’.
You can type freely here, but you will see tips on what to include. You can also see example text by clicking ‘Company Overview’, then ‘Get Started’ and finally ‘Examples’ under ‘Instructions’.
If you find example text that would be a useful starting for your plan, copy and paste it into the space. You can then customise it. If not, you can just type your own overview in the space.
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Part 3 Working with Financials We will now look at how to fill in your financial figures using tables.
Estimating sales Useful hint Keep your lists simple by grouping potential products, services or types of work together. This will help you focus. For example: • Commercial • Domestic • Public Authority In this Revenue Forecast section you will learn how to create a row for products and services that you sell, input estimated sales figures and cost of sales. From the task list choose ‘Financial Plan’ and click ‘Revenue Forecast’. Under the Revenue Forecast table click ‘Get Started’. Now you need to forecast monthly sales for the next 12 months. You need to create a row for each type of product or service that you sell. For example in your café you would have: • food sales • drink sales • other sales (to cover promotions). Now create a row called ‘Food Sales’. To do this: • click inside the ‘Product or Service’ box • type ‘Food Sales’ • click on ‘Add another product or service’ to add your other headings Now enter sales numbers for Food Sales.
Click ‘Forecast’ next to where you typed Food Sales.
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Type your headings like this
Click here to add your financial data
Choose how to forecast your sales
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When you’ve finished forecasting the sales of each row click ‘Save and Close’. The summary chart of your figures then opens.
After the summary chart you can write an explanation of the assumptions behind these figures. You can then add in your expenses for business, using the ‘Expenses Budget’ section of LivePlan. This covers areas like advertising, utilities, insurance and taxes – all of which are important expenses for your business. You can also add extra expenses that are specific to your business.
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Add expense amounts here
Profit and Loss Statement When you’ve put some financial data into your plan, you can start to test your ideas and look at the bottom line to see if you will make a profit or a loss. This is an excellent tool to help you review your goals and budgets, and stay on track. The Profit and Loss Statement gives you the chance to explain your projections, and see how realistic your goals are. To do this: • click ‘Profit and Loss Statement’ from ‘Financial Plan’ in the tasks list on the left-hand side • then click ‘Get Started’.
Like other areas of LivePlan, you have instructions and examples to help you
Part 4 Planning your Marketing As mentioned earlier, every good business plan should include a marketing plan. We are now going to look at how this can be useful to when you are looking at your business and its future. From the task list on the left-hand side, click ‘Strategy and Implementation’. Then click ‘Marketing Plan’. This opens up the following sections: • Overview • Positioning • Pricing • Promotion • Distribution
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From here you can outline: • • • • •
what separates your business from your competition how to target your audience which media channel suits your business and your audience a distribution strategy how your pricing relates to your clients’ needs and your business goals.
You then need to think about milestones for your business and what you want to achieve. These should be realistic and specific. Think about them carefully and consider who should be responsible for each area.
Part 5 Additional tools in LivePlan
Along the top taskbar of LivePlan you’ll see: • My Plans • Help • Logout
My Plans Here you can transfer between different business plans. This is relevant if you have more than one business and they have different aims and objectives. You can have up to three different business plans.
Profile Here you can amend your company details, such as your company address if you move or expand.
Completing the plan When you have finished your plan, you can preview it before you print it. The plan will be a PDF but you can also export to a Word format on your computer. You can choose the layout of your printed document, as well as include a confidentiality statement to cover you if you are showing this plan to any potential client or investor.
Executive Summary This section is a summary of your plan. You will need to complete it once you have created your business plan. If you set up your plan and then realise some of the information is wrong, click ‘Plan Settings’ at the top right of your screen to change it. For more information see the Help section of the software.
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LESSON 3 Legal compliance Helping you stay compliant To help you address the most common compliance issues for your business, you have access to Legal Manager as part of your MyBusinessWorks subscription. This service helps you comply with the complex, and often confusing acts, laws, rules and regulations that all small businesses have to contend with.
PART 1 What are the key Benefits of Legal Manager?
A risk management package which allows for a better run business Sophisticated, interactive, online software allows the creation of over 100 business documents, ensuring that you are fully compliant with the law Tailor-made documents which fit your company brand - simply import your logo Saves money - no need to employ highly-paid professionals or pay solicitors' hourly rates Regular news bulletins to keep you up to date with changes in legislation Stress and employee health management - helps you comply with duty of care towards your employees resulting in reduced stress claims and sickness absence rates Online access to the most up-to-date information and news
PART 2 What are the most common place compliance issues that Legal Manager can help you with? You will find all the information in your Legal Manager service presented in an easy to use and easy to understand format so that you can apply the law to your business and create a paper trail to enable you to prove the actions you have taken. The main sections available in Legal Manager are:
Business Start Up E-Commerce Health and Safety Property Debts and Debt Recovery Employment Intellectual Property Purchase and Sale Agreement Money Laundering
Please refer to the sessions within each section on the following page and note down which would be most applicable to you. Now we’re going to take a look at some of these policies in turn, why they are important and how to get started with them using the Legal Manager service. Then you will have
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the chance to create your own compliance checklist covering the areas you know you need to get compliant with.
Business start-up When you start a new business there are four business structures to choose from:
Sole Traders Partnerships Limited liability partnerships Limited companies
Each business structure has its own implications. The one that’s right for you depends on the nature and size of your new business. Legal Manager will help you to consider:
The ways the business can raise money The way decisions are made in the business Your personal liability if the business fails The records that you need to keep The amount of tax and National Insurance you have to pay.
With Legal Manager you can create some of the common documents needed when you set up a limited company. They are a:
Limited liability partnership agreement Non-executive director appointment letter Shareholder’s agreement
An example of the sort of document you can tailor is the Shareholder’s agreement. This document should be used when two or more people are running a business as a limited company. The agreement sets out the duties and responsibilities of the shareholders. The shareholders can be individuals or companies – or both.
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PART 3 I have just taken on staff what do I need to do? Question: Which of the following must any employer who takes on staff do as a minimum (be it straight away or after a minimum period of continuous employment)? 1. Provide a written statement of the main terms and conditions of their contract of employment 2. Ensure the working environment is safe and secure 3. Register as an employer with HM Revenue and Customs to set up a payroll 4. Provide employees with a minimum level of paid holiday, a maximum length of a working week and minimum level of rest breaks 5. Pay at least the national minimum wage 6. Provide statutory sick pay 7. Treat employees fairly and avoid discrimination Answer: All of the above! You can use Legal Manager to prepare the following documents to meet your requirements as an employer: -
an employment contract setting out the terms and conditions of employment risk assessments information on types of discrimination and how to avoid this current information about minimum wage, sick pay and holiday pay requirements
What’s an employee handbook and can it help with performance? An employee handbook lets you set out the non-contractual issues relating to employment including key administrative procedures and is given to all staff members.
Producing a company handbook for your employees: - Helps you comply with the law - Effectively communicates your practices and standards - Can lead to improved performance - Can reduce the chance of being involved in costly tribunals and disputes As a legal minimum your company handbook should contain policies on: -
disciplinary procedures equal opportunities grievance procedures mobile phones
Some of the optional additions to the handbook are: -
company cars dress code alcohol and drug testing bonus schemes
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What do you do with the handbook? Each time a policy is introduced or amended you must notify your employees asking them to familiarise themselves with any relevant points. You should either send copies to the employees or let them know where the handbook can be found, for example on the intranet or their manager.
PART 4 How do I comply with Health and Safety legislation? The point of health and safety regulations is to reduce the risk of a person becoming ill or injured as a result of something your business has done. The Health and Safety Executive state that around 156,000 non-fatal injuries are reported each year and an estimated 2.3 million suffer from ill health caused or made worse by work. In addition to this, did you know that your health and safety policy should not just cover an employee but should also cover a member of the public visiting your premises or a customer using your product? Your Legal Manager service can provide you with a checklist to make you aware of the main steps you must take to comply with health and safety regulations, link you to further information and guide you towards deciding on the actions you must take.
Creating a Health and Safety Policy Your health and safety policy statement is central to the successful management of health and safety in the workplace. It shows who does what, when and how it is done. It is the key to achieving acceptable standards and reducing accidents and cases of workrelated ill health. Based on your interactive answers your Legal Manager Service provides you with: -
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A guidance note about health and safety policies A health and safety policy tailored to your business An employee handbook Risk assessments and much more!
PART 5 Getting started with Legal Manager Before you access your Legal Manager service please make sure you are connected to the internet. Then from within MyBusinessWorks, click to launch “Legal Manager” from the Home Page. Once it’s up and running, you can start creating the documents you need. First, choose which session you want to start from the home page shown below:
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Once you select an area you would like to start working in you then choose specific topics with in this. When you select a topic your Legal Manager Service will inform you of how it will help you tackle this topic and what documents you can create. Whenever you start a session you will be guided through with information and instructions at each step.
My Documents The ‘My Documents’ page is where you can manage the document that you have selected and started to work on. For example you can print, rename and export documents to MS Word or make a PDF.
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REMEMBER
You also have the opportunity to add a Legal Document Review service to your MyBusinessWorks package for an additional monthly fee. You can buy this BOLT ON, which enables you to send your legal documents to the Legal Support Team, through the MARKET section of your MyBusinessWorks.
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Business Start Up
Choosing business structure
Sole traders Partnerships
Limited liability partnerships Limited companies
Limited companies
Includes the pros & cons of setting up as a Partnership Document templates include: Partnership Agreement Includes the pros & cons of setting up as a Limited Liability Partnership Document templates includes: Limited Liability Partnership Agreement Includes the pros & cons of setting up as a Limited Company Documents template included: Shareholders’ Agreement, Non-Executive Director Appointment Letter Includes the main types of Limited Companies, and how to set up , manage and file the accounts
Company directors
Explains how to appoint and remove directors, and their duties & responsibilities
Shareholders
Covers the issuing, transfer & submission of shares, and debentures
Share capital listing
Covers raising money on the stock market, listing on the stock exchange, increasing share capital, duties of disclosure, and more
Limited liability partnerships
Limited liability partnership agreements
Covers the legal requirements for setting up a Legal Liability Partnership
Partnerships
Creating a partnership
Covers how to set up a Partnership
Liability of partners
Explains the different types of liabilities
Sole traders
Ecommerce
Forming a company
Includes the pros & cons of setting up as a Sole Trader
Running a website
Taxation of partnerships
Dissolving of a partnership
Covers how to outline the exact terms of each partners rights and liabilities in a document Document template includes: Partnership agreement Explains how to dissolve a partnership Document template included: Notice of dissolution of a partnership agreement
Taxation
Explains the types of tax and when they should be paid
Relief from taxation
Covers the types of tax relief that exist
Terms and conditions
Privacy policy
Includes creating and publishing a website with terms and conditions which comply with the requirements as set out in the Distance Selling Regulations. Document templates include: Terms and Conditions for website selling consumer goods and/or services. Covers the data protection principles Document templates include: Privacy policy for a website
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Domain names
Ecommerce regulations
Right to cancel
Distance selling regulations
Health and safety
Creating a health and safety policy
Creating a health and safety policy
Consulting employees
Health and safety concerns
Risk assessment
Covers Registration and re-registration, and Fees for transfer Document templates include: Domain name transfer agreement Covers a customer’s right to cancel and the cooling off period This includes the exclusions of specific types of transactions, purpose and enforcement of the regulations.
Covers the legal requirements, the policy content and regulations Document templates include: Letter to an employee seeking consent to a medical examination Explains why consultation is important, what it involves and how regulation is enforced
Accidents
Covers the common cause of accidents, slips and trips, and reporting accidents
Computers
Covers using Visual display units, and how to treat disabled workers
Driving
Covers the Health & Safety considerations during driving, tiredness whilst driving and use of mobile phones whilst driving
Gas and electricity
Covers the Health & Safety regulations that cover electricity, PAT testing, and gas legislation
Smoking
Explains the Employers’ minimum actions and content of a smoke-free workplace policy
Hazardous substances
Explains the main legislation, COSHH (Control of Substances Hazardous to Health) Regulation 2002, and preventing and minimizing exposure
Manual handling
Covers employers’ duties, avoiding manual handling, assessing and reducing the risks of injuries
Noise
Covers noise in relation to Health & Safety and employers’ legal duties
Vibration
Covers the regulations, types of vibrations and vibration levels
Vulnerable employees
Fire assessment
Explain the work they cannot do because of their age (young people) or their condition (expectant mothers) Document templates include: Risk Assessment for young persons on work experience Covers performing a risk assessment, identifying hazards, and removing or reducing
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risks
Assessing stress
the risk Document templates include: Fire risk assessment – Record of significant finding, Fire risk review checklist Explains the 5 steps to risk assessment
The Work at Height (WAHR) Regulation
Covers what it is, regulations required and the use of ladders
Workplace regulations explained
Control of Substances Hazardous Health (COSHH)
The dangerous Substances and Explosive Atmospheres Regulation
Disability Discrimination Act
Employments Rights Act 1996 First Aid Regulations The Health and Safety at Work Act
Property
Residential Leases
Explains what is classified as hazardous substances under COSHH and where they can be found Document templates include: Health & Safety compliance review and policy creator Explains what DSEAR is, and the employers’ obligations Document templates include: Health & Safety compliance review and policy creator
Explains what the Act includes, and covers example risk assessments Document templates include: Health & Safety compliance review and policy creator Covers the grounds on which employees should not be dismissed Covers the regulations and First Aid items
Explains what the Act includes, and covers all the Health & Safety policies Document templates include: Health & Safety compliance review and policy creator
LOLER
Explains the equipment covered by LOLER, who the regulations apply to and employers’ requirements
Personal Protective Equipment at Work Regulations (PPE)
Explains what PPE is, assessing suitable PPE hazards and types of PPE, and requirements for employers
PUWER
Explains what PUWER is, who the regulations apply to, how they relate to Health & Safety, and the equipment covered
Working time regulations
Gives a summary of the basic rights and protections that the regulations provide to employees
Residential tenancy agreements Rent and deposits
Includes how to set up a tenancy Document templates include: Residential and assured short hold tenancy agreement
Covers rent reviews, increasing rent and rent arrears
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House in multiple occupation (HMO’s)
Explains which types of properties fall under HMOs and which ones don’t
Health and safety
Covers gas, fire and electrical safety in rented accommodation
Property development
Buying property
Covers the types of property purchase contracts
Evicting a residential tenant
Accelerated possession procedure
Building work
Rent arrears
Other grounds for eviction
Debts and debt recovery
Commercial leases
Creating a commercial lease
Debt, bankruptcy and liquidation
Liquidation of a company Debt
Bankruptcy
Debt recovery
Recovery of debt through third parties How to recover debt yourself
Employment
Discipline and Dismissal
Employment claims
Employment
This outlines the parties involved, procedures for planning permission and how to inspect the site Document templates include: Small-scale building contract Includes the procedures to get tenants out as quickly as possible and get new tenants in who will start paying Document templates include: Notice under section 21 of the Housing Act 1988, Notice under section 8 of the Housing Act 1988 Describes steps to take following the correct procedures Mandatory and discretionary grounds for obtaining possession of a property let
Covers the agreement between a landlord and tenant of a commercial property Document templates include: Licence to occupy business premises, Medium Term Lease of Commercial Premises with rent review, Short Term Lease of Commercial Premises with no rent review Covers distribution of assets, compulsory liquidation and alternatives to liquidation
Includes Guarantees, alternative to banking, and more Document templates include: Guarantee for the payment of debt, Guarantee for the performance of a contract, and more Includes the bankruptcy process, and alternatives to bankruptcy
Covers steps to collect the debt, assignment & guarantees, powers of attorney to collect debt Document templates include: Debt collection letters for unpaid invoices, Form N1 – Claim form for debt recovery This covers steps you can take to ensure that debt is recovered via letter and taking the matter through court
Covers the ways in which dismissal or disciplinary actions can arise, and the types of claims employees can make Document templates include: Employee handbook, Compromise agreements, and more Includes what an employee can claim for and by when, the role of the Advisory Conciliation and
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Tribunal
Arbitration Service (ACAS), steps before the hearing and the hearing
Redundancy
Covers information about the key provisions, the types of redundancy, Employers’ obligations and redundancy payments
Disciplinary procedure
Dismissal
Employee rights
Work time regulations
Flexible working
Discrimination and equal pay
Employing Staff
Includes setting out disciplinary rules, informal and formal disciplinary documents, penalties and appeals Document templates include: Employee disciplinary meeting letter, Employee disciplinary appeal hearing letter, and more Covers the reasons for dismissal, and unfair dismissal Document templates include: Employee dismissal letter for gross misconduct, Employee dismissal letter following previous disciplinary action Covers Working time regulations, maximum working hours, annual leave, night shifts, and more Document templates include: General purpose absence request form Covers all types of flexible working, applications for flexible working and employers’ decision Document templates include: Statement of change in terms of employment Covers all types of discrimination, Equality and discrimination laws, equal opportunity and equal pay
Adoption and dependencies
Covers adoption leave and dependent care leave
Maternity and paternity
Covers maternity leave, paternity leave, maternity pay and flexible working
Parental leave and rights
Explains what it is, when available, how employers should process these demands
Pay and time off
Covers pay and minimum wage, employees’ entitlement to unpaid time off
Part time working
Covers part-time employees’ rights, rate of pay, fair treatment of part-time workers
Whistle blowing by staff
Explains how workers are protected from being victimised or dismissed for whistleblowing
Working for a new owner
Covers staff rights, information and consultation
Pensions
Explains employers’ obligations to offer stakeholder pension scheme when they have 5+ employees, and the types of schemes
Recruitment
Covers the recruitment process, all appropriate documents, background and
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Employment contracts
Flexible working
Unusual employees
Covers employing international students, staff with criminal convictions, and working holiday makers
Teleworking
Covers distance working, contractual issues, data protection, equipment provision and Health & Safety
Part-time working
Covers part-time employees’ rights, rate of pay, fair treatment of part-time workers
Flexible working
Grievances
Grievance procedures
Sickness absence
Intellectual property
Protecting your ideas
Copyright and trade marks
reference checks, induction process, and more Document templates include: Job application form Covers what should be included in the contract: clauses, terms, wages Document templates include: Employment agreement, Work experience agreement, and more
Self-certification
Statutory sickness pay
Passing off
Covers all types of flexible working, applications for flexible working and employers’ decision Document templates include: Statement of changes in terms of employment Covers the issues that might cause a grievance, which procedures to follow and how to deal with them Document templates include: Employee handbook Explains how to design and operate a company self-certification system Document templates include: Sickness selfcertification form Covers the statutory sick pay and employers’ responsibilities Document templates include: Letter to an employee seeking consent to a medical examination Covers breaches of confidence and confidentiality agreements Document templates include: Mutual nondisclosure agreement, Product name: Nondisclosure agreement
Non-disclosure agreements
Includes alternatives to non-disclosure agreements and covenants in restraint of trade
Confidentiality
Covers confidentiality law, the quality and the obligation of confidence
Trade marks
Explains how a trademark protects any sign or symbol that allows your customers to tell you apart from your competitors
Performance rights
Includes exploitation, standard terms and individual contracts
Moral rights
Includes paternity rights, the right to privacy of photos & films,, false attribution and derogatory treatment
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Design rights
Copyright
Purchase and sales agreements
UK sales and agreements
Sales contracts
Consumer protection Competition law
Agency distribution agreements
Money Laundering
Privilege and privileged circumstances
Obligations and good practice in the regulated sector
Covers how this relates to the designs of mass produced industrial products such as toys, furniture and cutlery Document templates include: Trademark licence agreement Includes ownership of copyright, rights of the owner of the copyright, infringement and examples of how copyright law works
Includes the nature of the consumers rights, those who sell goods in the course of a business and their obligations Document templates include: Purchase order, Notice of cancellation of order, and more Covers the Consumer Protection Act and The Common Law Position Includes The Competition Act 1998, compliance with the law and consequences of infringement
Financing
Includes the distributor’s and manufacturer’s duties and how to appoint an agent Document templates include: Agency agreement, Distribution agreement, and more Covers method of payment and documentary credit
Transportation of goods
Covers transport costs, shipping documents and delivery and risks
Jurisdiction clauses
Covers which country’s law will apply when trading globally
Law clauses
Covers agreement on applicable law, consumer contracts and the Rome convention
Privilege
Explains the provisions in the Proceeds of Crime Act 2002 and in the Terrorism Act 2000 and the tension between a lawyer’s duties
Privileged circumstances
Explains the Privilege reporting exception, crime/fraud exception and the differences between legal professional privilege (LPP) and privileged circumstances
Money Laundering Reporting Officers
Covers the role of the MLRO and who should be one
Risk based approach
Explains the rationale and includes developing and applying a risk-based approach and managing and monitoring compliance
Customer due diligence
Explains standard, simplified and enhance due diligence
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Anti-money Laundering
Internal control and monitoring compliance
Covers how monitoring businesses is achieved
Disclosures
Covers the outline of the disclosure regime, the protected and authorised disclosure, how to report, assessing internal report, making external reports, and more
Record keeping
Covers what records should be kept and for how long, and the Data Protection requirements
Training
Explains which staff should be trained and how frequently, and covers the criminal sanctions and defences
The legal and regulatory framework
Get advice on how to stay compliant with Anti-Money Laundering regulations
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LESSON 4 Training and development PART 1 Why is Training and development so important? According to the Department of Business, Innovation and Skills (announced October 2010); there are currently around 4.8 million SMEs in the UK. There are also about 400,000 new businesses are set-up each year, but only 49.5% of SMEs believe they have the skills to start and run a business*.
What does this all mean for you? The very nature of small businesses means they will be incredibly diverse, and each business is likely to have differing business objectives and management structures, which means that different skill sets are required for each one. Furthermore, the skills needed by a business will change as it develops or its environment changes. This is why we’ve included Mindleaders in your MyBusinessWorks subscription. With over 2500 award winning quality courses and videos, it is designed to enable you to constantly improve and add to your skills so your business can grow. We will look at how you can make sure you are working on and developing the skills you really need later in this session, but first let’s look at how you use Mindleaders.
PART 2 Getting started with Mindleaders From within your MyBusinessWorks dashboard select ‘Mindleaders ’. Once logged in you can select “View All Learning Resources” from My E-Learning to view all the available courses and videos. Each course is broken down into modules and you can drill down into each course series to look at the modules available. You can then drill down further to view the actual lessons that make up a specific course.
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Navigating around your courses Use the course navigation bar at the bottom of each page to navigate within a course. • Exit closes the course and marks your current page • Print allows you to print the current course page • The back button goes to the previous page • The forward button goes to the next page.
Understanding where you are in a course The lesson title is displayed in the top left corner of your course window. In the bottom left corner of your course window, you will find your location in the course and the current lesson are also shown. If you move your mouse over the lesson location information, a progress bar showing your overall location in the course is displayed. Viewing the Course Topics Click the Course Topics tab to view the topics covered in a course. Topics are organised by lesson. To view the learning objectives for a lesson, move your mouse over a lesson title. To view a topic, click the appropriate link in the topics list. Your current topic is indicated by an arrow. You can move your mouse over a lesson title in the topics to view the learning objectives for that lesson.
Before you begin a course, take a skill Assessment When you start a course, you will initially be given the option to Begin the Course or Take the Skills Assessment. The Skills Assessment functionality within Mindleaders gives you the opportunity to answer questions, chosen at random, about the topics covered in the course. You can take the Skill Assessment as often as you like, and it is a useful tool to help you gauge whether you need to spend time on this course and how deep your knowledge is before you start. To access the Skill Assessment, press A or click ‘Take Skill Assessment’ on the Course Tools tab in a course. Now you know how to get around your MindLeaders, let’s look at creating your own personal training and development plan.
PART 3 What are the key business skills you need? SFEDI Skill Area Business strategy and analytical thinking
SFEDI Skill
Mindleaders Thirdforce Series
Visionary Strategic and analytical thinking Managing Change Decision Making Problem Solving
Business Management/Leadership Global Business/Project Management/Career Development Time Management/Communication Business Management Project Management/Negotiation/Communication Business Management/Sales and Marketing
Setting Goals and Business Planning
Add to Plan
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People Abilities
Spotting and seizing opportunities Communication Motivation Team working Build Confidence
Functional or task-based abilities
Giving social and emotional support ability to listen and engage Financial awareness Marketing Delegating Organisational Skills Technical Skills
Learning Skills Council areas
Business Management/Sales and Marketing Communication/Leading Teams Leadership/Leading Teams/Career Development Leadership//Leading Teams Communication/Leadership/Leading Teams/Project Management Self-Management/Communication
Basics of Business Maths/Access Sales and Marketing/Customer Service Business Management/SelfManagement/Leading teams Time Management/Self Management/Project Management Photoshop/Web Design and Graphics/HTML/Dreamweaver/Windows Server/Project/Windows/Access/Excel
Learning Skills Council skill
Mindleaders Thirdforce Series
Management Skills
Business Management/SelfManagement/Time Management/Project Management European Computer Driving Licence/International Computer Driving Licence/Word/Works/Excel/Access/ Windows/ PowerPoint Customer Service/Business Communication/Negotiation/Sales and Marketing
Technical Skills, in particular IT skills
Communication and customer handling skills
Add to plan
Your Mindleaders course series listed above is just a taster of what is available to you as part your MyBusinessWorks subscription. Your Mindleaders application includes over 2,500 courses and videos designed to help you develop your skills and plug any gaps you may have.
Create your own training and development plan Use the list above to identify any skills that you currently lack, or which need work on. Whether it’s technical skills you require such as web development, MS Excel or Photoshop, or business skills, such as time management, negotiating or internet marketing. It may be that you are not as computer literate as you would like to be, or it may be marketing skills, so you can maximise your sales potential. Whatever your needs, Mindleaders is likely to have the course you need to help you address key skills gaps and achieve your goals for your businesses.
Helpful Tip A series is made up of several courses. You do as much or as little of any of the courses in the series as you like, depending on what you want to learn.
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1. Turn to Appendix to begin creating your training and development plan. 2. Select 10 of the skills you know you need to develop in order to run a better business, if there is a specific skill that is not listed above, but that you know you need to work on and it is in your Mindleaders library, then add that to your list too. 3. Now prioritise this list, and rank the skills you need to acquire first at the top.
Helpful Tip Don’t forget at the start of many of the courses in Mindleaders you can take a quick Skills Assessment to see how much you know and how much you need to learn. Use your Mindleaders Licence course and video list to identify the courses/ videos that will enable you to develop these skills.
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LESSON 5
Part 1 What is Moonfruit In 2013, according to the Office of National Statistics 36 million adults in the UK (73 per cent) accessed the Internet every day or almost every day, highlighting the importance of having a web presence. Moonfruit is a multiple award-winning website building service that allows you to quickly and easily create professional looking websites. Moonfruit is simple to use and packed with powerful features allowing you to achieve results beyond your expectations! Moonfruit can be used for any kind of website or online content. From an information web page to e-commerce stores, Moonfruit makes publishing and designing your website quick and easy.
3,822,218 sites and counting.
You can layer, crop, animate, colour and apply transparency to objects on your page. It has many features including those discussed in this guide.
Part 2 Getting Started With Moonfruit You will begin the set up process through the Website Builder Tab on your MBW Homepage. After clicking on the tab you will need to enter your Moonfruit web name, username, password and email address. Once these have been entered you need to agree terms and you can then launch your site. Once the site has been launched you can then start to edit the site.
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Part 3 Customising Your Site The template can be then changed using the ‘Design’ icon to enable you to put your company logo
on every page.
Adding a logo to every page To add a company logo or company name to every page you will need to amend the page master. This can be found via the ‘Design’ tab and the page master is the second option on the left hand side of the screen. You can then add in text or upload your logo so that it appears on every page of your website.
Uploading media
To upload pictures, music and videos use the ‘Files’ icon. This opens up a pop up box, choose ‘Upload’ select the files you want to upload and click ‘Upload’.
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To use these files click on ‘Use This’. This will then upload it to your site.
Using pictures Pictures can be moved around the site, cropped, made into links and have the transparency changed by using the ‘Editor’ function.
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The ‘Editor’ box will appear every time something is uploaded or added in.
Insert options The ‘Insert’ icon can be used to perform various functions. The basic objects option enables you to insert titles and text boxes. Once these have been entered in, the ‘Editor’ will allow you to amend the font and colour and use the text to link to websites or other pages in the website. To do this, highlight the text to be used as a link and use the ‘link’ section in the ‘Editor’ box. Pictures can be amended, again by using the ‘Editor’ function, but can also be put in a gallery or slideshow via the image tab in the ‘Insert’ menu.
Pages Pages can be added in, deleted out, renamed or reorganised using the ‘Pages’ icon, then ‘Organise your pages’.
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Domains Moonfruit will allow you to check domain name availability and register it. If you have received a voucher as part of your subscription package it will be shown here to use for or towards the cost of purchasing domain names.
Admin The ‘Admin’ button allows you to view statistics such as how many visitors there have been to your site. If you have registered for the free Google tools, information from them will also be shown here.
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Services There are free Google services that you can use. These are accessed via the ‘Services’ icon. Google Analytics enables you to receive information about how people move around your site, how long they spend on each page, where they came from before they went to the site and where they go afterwards. Reports and graphs are also generated based on keywords that have been used to help maximise the site.
Part 4 Support for Your Site Social media integration All Moonfruit sites support a full membership/login system allowing you to create members only pages and give edit rights to different users of your site. This all links in with your social networks so that you can message out from your site to Facebook or Twitter, and invite people to become members of your site from other networks.
The Moonfruit Library Moonfruit provide a free library of images, animations and widgets for you to use in your site. They are available in a range of styles, individually customisable and help you achieve the look and content you want.
Search Engine Optimisation (SEO) All Moonfruit sites are optimised for search engines by default. Search Engine Optimisation is the process of improving the visibility of a web site in search engines. As well as the Flash version of your site seen by your visitors, it also produces a clean and simple HTML version for SEO. All normal page content is represented in the HTML version which correctly marks up all text formats (e.g. Headers, etc.).
Integrated Google tools Building and editing is only one part of running a successful website. After that you must generate traffic, track visitors, and master the tricky world of Search Engine Optimisation. Google offer
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support in these areas and Moonfruit allows you to easily use these free and powerful tools to help manage your website. An unlimited number of additional features can be added to your site from Google Gadgets, Wigetbox and Amazon widgets - games, ecommerce tools, and video/ music players. Sell things on your site Moonfruit also makes it easy to start trading online. Use the PayPal widgets to set up ‘buy now’ buttons that link to a PayPal shopping cart. Add nicely designed product pages from the templates.
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LESSON 6 Data backup Backing up your data with mozypro
Why is it important to back up your data? The Department of Business, Innovation and Skills estimates that over 70% of businesses never reopen their doors after losing company data.
What is mozypro? mozypro is an online service that allows you to automatically back up any data stored on your PC. In just a few easy steps you can make sure that your business data is protected. Once installed, mozypro can back up your data manually or automatically to our servers, as often as you like. Plus, all files are stored with a high level of encryption for security.
Your mozypro We’ve included unlimited use of mozypro in your MyBusinessWorks subscription for the first year. Installation, Registration and Setup Before you install mozypro on your PC, it is worth checking if your machine is compatible: • mozypro currently supports Windows 2000 and later versions. It also supports Mac. • It is not compatible with server operating systems. • We recommend you have a broadband connection. When you launch mozypro from the MyBusinessWorks launch portal, you be provided with a wizard to help you through the installation, registration and setup process. Follow the step by step instructions on screen to complete this whole process. When prompted please enter your Licence key- this is available for you on the instruction screen. Once you have completed the installation and registration mozypro will automatically find and back up the most important files on your machine, however if you have specific requirements you can use the mozypro application to customise your settings. To configure your mozypro tick the Launch mozy Configuration Wizard box. If you need more help, visit https://mbw.mozypro.com/login’.
Configuration It is important to configure mozypro when you first get started. This is so you know it’s working properly and you can choose how it will operate for you when you start backing up your data. Your initial configuration comes up straight after installation. mozypro will now load your pre-selected backup sets (your backup sets are groups of files that mozypro has recommended you back up). You can select which types of file you would like to back up by ticking the relevant boxes next to each backup set.
When you have ticked the boxes, click ‘Next’. Remember you can change these selections at any time.
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mozypro will now test the speed of your internet connection and determine how long it will take to back up your selected files. When this is done, click ‘Next’.
You will now be given an estimate of how long your initial backup will take. Remember, your first backup will always take longer than subsequent backups because more information will need to be uploaded to our servers. On this screen you can choose to increase or decrease the speed of your backups, depending on how well you would like your computer to perform during backups. Once you have chosen the frequency, click ‘Next’.
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Now select when you would like your first backup to begin. (If you want to change your configuration, click ‘Expert Mode’.) Remember that you can change any of these settings whenever you like. Click ‘OK’ to complete the configuration
Successful backups and the Status screen After you have installed and configured your software, mozypro will start to back up your selected data automatically. After each successful backup, mozypro gives you a confirmation and brief summary of your last backup on your Status screen: With each confirmation you have these options: 1. Start another backup. 2. Configure your backup more – you can add more files to your backup set or change the speed or frequency of your backups. 3. View your backup history by clicking ’Settings’ to see when and how frequently your data has been backed up. 4. If your files have been lost or corrupted since your last backup, you can restore them. 5. If you have queries about your last backup or mozypro you can go to http://www.mybusinessworks. co.uk/help for help.
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If you want to go to the Status screen at any point in the future, click the mozypro icon on your desktop. Or you can use the mozypro icon in your system tray in the bottom-right-hand corner of your desktop. Your mozypro icon
Extra configuration of mozy Although mozypro will be running automatically by now, you may want to change either the way your backups run or what is included in them. To do this, click ‘Settings’ from your Status screen to go to your mozypro configuration page. Or you can right click on the mozypro icon in your system tray.
Select Back Up Sets
2. File System
3. Options
4. History
5. Restore
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Click ‘Backup Sets’ to modify them in exactly the same way as you did in the configuration process. If you click ‘File System’ you can be more specific about which files you are backing up.
Select a file To back up files from the ‘File System’ menu: • select the files you would like to back up from the left-hand side of the screen and tick the box next to each one • click ‘OK’ in the bottom-right-hand corner of your screen. These specific files will now be added to your Backup Sets, and backed up automatically each time. Click ‘Options’ to change technical aspects of your backup, from speed to frequency. These can be modified depending on your preferences but you may need to think about the following: • Internet speed and computer performance • How often you update your business data If you want to see your previous backups, click ‘History’.
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Restoring files If your business data is lost or becomes corrupted, you can use mozypro to restore the files. This is the key benefit of the programme. As long as you have configured your mozypro correctly, restoring your files is easy. You can be totally reassured your files are safe with mozypro. When you click ‘Restore’ you will be directed through to the following screen:
Select Files
Restore Files
On the left-hand side of your screen, you will see the files (and their paths) that you have been backing up using mozypro. Tick the box next to each file you want to restore and click ‘Restore files’. Then your restored files will be put back in their original places. It’s as simple as that!
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LESSON 7 Financial Management Why is financial management important? According to the UK Insolvency Helpline, the main reasons behind insolvencies are, “poor management and financial restraints”, which are “more prevalent in small businesses”. On top of this, their research has also shown that “more than half of Britain’s small businesses collapse because of cash-flow problems”. Some of the more recent insolvency cases the helpline dealt with show that the reasons for these cash flow problems are: • failure to control cash – by carrying too much stock, paying suppliers too promptly and allowing clients too long to pay • failure to pay crown taxes, for example PAYE and VAT • clients not paying • a lack of working capital • the business widening its range of suppliers, simply to make more credit available. According to small.business.co.uk A quarter (25 per cent) of business owners and leaders admit that they don’t feel fully in control of their accounts and business finances and almost one in six small businesses in a UK-wide study say they are ‘very’ concerned about managing cash flow effectively over the next 12 months To make sure you can manage your cash flow and keep your business going, we’ve included a financial management application as part of your MyBusinessWorks subscription.
Part 1 Getting started 1. Signing up The first step to using QuickBooks Online Essentials is to enter some basic information
2. Setting up your company You will need to enter some information about your company. Company Name Enter your company name. Company Address Enter your company address details.
3. Setting up Quickbooks Enter in your industry information Your Industry Select from the list You Sell Enter if you sell products, services or both
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Company Type Choose from the dropdown How do you like to get paid Select all that apply You can then choose to import transactions from your bank account and follow the instructions on the screen or ‘Skip This Step’
4. VAT DEALING WITH VAT
There are two types of tax scheme commonly used by businesses: Standard VAT Accounting and VAT Cash Accounting.
By using the Standard VAT Accounting scheme, you must pay VAT on sales you have not yet received payment for.
The VAT Cash Accounting is a scheme devised by the tax authorities to help smaller companies with their cash flow. On this scheme, you pay and reclaim VAT only on what’s actually been received or paid. To qualify for the VAT Cash Accounting scheme you must have an annual turnover below a certain figure. For more information, please refer to the HM Revenue and Customs website at http://www.hmrc.gov.uk.
QuickBooks Online Essentials automatically calculates the VAT for each transaction you post when you select the transaction’s VAT rate.
By default all new businesses that are set up in QuickBooks Essentials are set up as not VAT registered. When you first set up your business in QuickBooks Essentials, you will choose your VAT settings. It is important that these are correct. SETTING UP QUICKBOOKS ONLINE ESSENTIALS TO TRACK VAT
This is set up in the VAT section.
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Click on Set up VAT and enter in your details.
VAT Registration number Enter your VAT registration number. This is a compulsory field if you are registered for VAT because your VAT registration number must be printed on your invoices. Your current VAT period begins Enter the month your business's VAT period begins. Your VAT Accounting Scheme Enter whether your business is standard accounting for VAT or cash accounting for VAT. Your VAT filing frequency Choose the frequency of how often you file your VAT. Once you have set up your VAT information you cannot change the start date. You can, however amend the scheme and the frequency.
QuickBooks can track the rate and amount of VAT on your sales and purchases, and, if you are registered for VAT, makes it easy to prepare your VAT returns.
To amend any preferences, like the first month of the financial year or the terminology you use for your customers ie clients, customers, members, go to the Company Section and select ‘Company Settings’ from the Settings menu after clicking on your company ‘cog’ in the top right hand corner of the screen
With your Financial Year QuickBooks Online Essentials uses this first month to set the year end date for future years. So if your first account year end finished on 31 December 2012, it will work out your accounts to 31 December 2013. It will produce reports ending on your first accounting year end date for each year after that.
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5. Help and Support Throughout the program the click Question Mark button in the top right corner and get help
You can get more help by clicking ‘More Support Options’ in the help box and this takes you through to the Intuit support pages.
6. Introducing the Chart of Accounts
The Chart of Accounts is the most important list in QuickBooks Essentials. Every transaction you enter is recorded in the Chart of Accounts, and the end results are your financial statements. - the Balance Sheet and the Profit and Loss report. Every account in your chart of Accounts appears on either the Balance Sheet or the Profit and Loss Report. To access your Chart of Accounts click on the company ‘cog’ and choose Chart of Accounts under the Settings menu
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This list will help you create appropriate accounts for the kind of information you want to work with in QuickBooks Online Essentials, for example the Profit and Loss Report. Accounts that make up the Profit and Loss Report consist of:
Income accounts – for what you sell
Cost of sales accounts – for the costs of labour or materials that relate directly to the sales you make
Expense accounts – for things that make your business run, like
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rent, advertising, office supplies or utilities. You probably don’t need all of the accounts that QuickBooks Online Essentials automatically creates for you. So, you can customise the Chart of Accounts to suit your business by adding and editing accounts. The ability to change the list of accounts is just one of the ways you can customise QuickBooks Online Essentials to meet the needs of your company.
7. Adding a new income or expense account To create a new category one in the Chart of Accounts
Click ‘New’
The Mini Interview window will appear
Follow the guidance in the wizard.
Exercise 1 Create a new Income account for your company
Choose the type of Account as Income Select the relevant type on Income account Enter the name of the Income account you would want to add
Editing accounts is just as easy, for example to change the name, description or to make it a sub account of another account.
Go to the Chart of Accounts Select the account you want to edit
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Click Edit in the top right hand corner Make the changes you want Click Save
Sub Accounts When an account in your chart of accounts seems to cover too much, you can divide the account into one or more subaccounts. In your chart of accounts, each subaccount appears indented below its parent account.
Note here which categories you will add or change:
8. Creating a new Bank Account
You also manage all your bank accounts and transactions from the Chart of Accounts. Add new bank accounts in QuickBooks Online Essentials to reflect your own business bank accounts - for example Savings accounts. Dealing with business cash in QuickBooks Online Essentials is just like dealing with money going in and out of the bank. You just need to set up a new bank account and call it, for example, "Cash", "Petty Cash", or "Till" Think of this account as the cash tin or till and record money coming in and going out as you would for a normal bank account. It makes good sense to set up and use the bank accounts in QuickBooks Online Essentials to mirror the way you use your actual bank accounts.
To create a new bank account:
From Chart of Accounts.
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Click the New button. The Mini Interview window will appear
Select Cash at bank and in hand Chose the type of bank account Enter the name you use to refer to that bank account. E.g. ‘Barclays Business Account’ Description is optional Enter the opening balance Click Save
Exercise 2 Add a ‘cash’ bank account
Choose the relevant type of bank account Enter the name of the account as Petty Cash
Tip: The opening balance is the balance as at the start of the day of your QuickBooks entries. For accounts you've held awhile, enter the ending balance of your last statement, or your last statement of the previous accounting period. To bring the account up to date, enter all your banking transactions since that date.
Note here the names of the bank accounts you will want to add:
Part 2 Money In 1. Setting up customers
Customers are the people and companies to whom you sell your goods and services. You can set up your customer details here before creating Invoices and
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Sales Receipts for them.
Choose the Customer option from the left hand side
The Customer Centre makes is easy to see all of your customer details in one, organised screen and see contact information, open invoices and paid instructions at a glance.
ADD A CUSTOMER
Click New Customer. Fill in the customer details Enter a display name in the Display Name As field. This is the main name used on screens, lists and registers. Fill in the Address tab – this is the postal address to which customer invoices will be addressed. In the Payment and Billing tab set the terms. These terms are set terms to be used on the customers invoices Click Save.
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Exercise 3 Add a customer
From the Customer Centre add a New Customer Fill in name, street and town
CHANGING A CUSTOMER’S DETAILS If you want to change any details for a contact
Choose the Customer option from the left hand side
Click on the customer name
Edit and click Save
IMPORTING CONTACTS If you already have an existing list of contacts it may be easier to import that list into QuickBooks Online Essentials. Click on the dropdown arrow next to New Customer then Import and follow the on–screen wizard.
Add your notes adding and editing customer details
2. Invoicing You can use QuickBooks Online Essentials to create professional invoices to send to your Customers. Here's how to create a new invoice from scratch.
CREATE AN INVOICE TO YOUR CUSTOMERS
From the Transactions tab, select ‘Sales’
In the top right hand corner click ‘Create New’ then ‘Invoice’
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This then opens the invoice screen
Choose your customer from the drop down in the top left.
You can then check your terms or you can enter a specific date in the Due Date field.
If you are VAT registered, choose whether you would like the invoice to display amounts as: - exclusive of VAT – the net value will be displayed with VAT calculated at the bottom of the invoice, underneath the subtotal. This is normally used for business to business sales. - inclusive of VAT – the gross value will be shown with VAT at the rate specified in the VAT column included, VAT will not be shown separately. This is normally used for sales to domestic or private customers.
We can now tell QuickBooks the products and services that we need to invoice the customer for Click in the drop-down list in the Product/Service column and choose Add New
- Enter a name for the product or service. Your customer does not normally see the product or service name – use the Description field for what you want the customer to see. - Enter the description. This appears on the printed or sent invoice.
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- Enter a set or normal price/rate if the product or service has one. - If you are VAT registered: Tick Inclusive of VAT if the amount is the gross amount Select the rate of VAT that applies to this product or service.
- Choose the income account. Choose the appropriate income category from the dropdown menu to track this item. It will then appear on your Profit and Loss Report.
Click Save
Update the description if necessary.
Enter the Quantity.
Check, update or enter the price/rate – together, the quantity and price/rate calculate the amount for a line.
You can add more items on the lines below if necessary.
The total amount is shown at both the bottom and top right of the invoice.
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SAVING AND SENDING THE INVOICE TO YOUR CUSTOMER You can choose to save the invoice or ‘Save and Send’ to email it to your customer. Please note to be able to do this you need to enter a customer email address either in the customer record or on the top of the invoice
To Print
At the bottom under the Invoice click Print The print preview will open From here you can print the invoice and also save it
VIEW THE OUTSTANDING BALANCE
Use the Customer menu to see an overview.
Click Customers This brings up a list of your customers and their outstanding balance To see a customer’s transaction history, select the customer’s name.
Exercise 4 Create an Invoice
From the Customers tab create a new invoice Select your customer Add two items to your invoice Save and print the invoice View the outstanding balance in the Customer Centre
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Add your notes about creating invoices
RECEIVING PAYMENT FOR AN INVOICE When your customers pay their invoices you must record this in QuickBooks Online Essentials.
Click Customers
Select Receive Payment
This opens up the Receive Payment window
Enter the date payment was received into the bank account.
Select a payment method in the Payment Method drop-down menu.
Enter the cheque number or payment transaction reference in the Ref No. field.
From the Deposit To drop down choose the bank account that the money has been paid into
Confirm the payment amount
Click Save and Close
Confirmation the Payment has been added will appear
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Exercise 5 Receive payment
Receive payment for the invoice you have just created into your main business bank account
Add your notes about receiving payment for invoices
3. Sales Receipts These are used if you receive payment at the time of the sale or fill out a sales receipt to give your customer as a record of payment.
Click Transactions
Choose Sales
In the top right hand corner from the Create New drop down select Sales Receipt
This then opens up the Sales Receipt window
If you are a retail business instead of recording the name of every customer add the day of the week e.g. ‘Takings Tuesday’ as the customer name and then enter a summary of the items sold for the day
Choose the payment method
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From the Deposit to dropdown select the account that the money has been deposited to. For example Till If you are VAT registered, choose wehter you would like the sales receipt to display amounts as: inclusive of VAT – the gross value will show with VAT at the rate specified in the VAT
column included. VAT will not be shown separately. This is normally used for sales to domestic or private customers and retail sales. - exclusive of VAT – the net value is displayed with VAT calcuated at the botto of the invoice underneath the subtotal. This is normally used for business-to-business sales.
To enter the first item, in the Product/Service column, click on the drop-down list and choose from the list of items or select Add New Enter a name for the product or service. Enter a description, which will appear on the printed or sent sales receipt. Enter a set or normal price/rate if the product or service has one. If you are VAT registered: Tick Inclusive of VAT if the amount is the gross amount Select the rate of VAT that applies to this product of service Choose the income account. Choose the appropriate income category from the drop-down menu to track this item. It will appear on your Profit and Loss Report. Click Save
Update the description if necessary.
Enter a quantity (optional).
Enter a per unit price/rate (optional).
Together, quanity and price/rate calculate the amount for a line.
You can add more products and services on the lines below if necessary.
The total amount is shown at the bottom and top right of the sales receipt.
Tip: For retail sales the product/service may be a type of product of service as shown on your till or ‘Z’ report
Tip: For retail sales you may enter the total amount for the chosen type of product/service
Tip: For retail sales the takings may be held as ‘Till’, ‘Cash in Draw’, ‘Petty Cash’ or other cash ‘bank’ account until transferred to the business bank account
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You can print or send this transaction
Click Save and Close
A confirmation that the sales receipt has been added will come up.
Exercise 6 Record Sales Receipt
Complete a sales receipt for payment received at time of sale. Deposit payment to a cash ‘bank’ account
Add your notes about receiving recording Sales Receipts
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Part 3 Money Out We will look at two ways of recording the money we spend – supplier bills and bank payments. SUPPLIER BILLS Bills are costs that the business will pay for from its own bank account, but not straight away – for example, a utility bill or a sub-contractor’s invoice. BANK PAYMENTS In QuickBooks Online Essentials we use the Expense options to record costs that the business pays for straight away – normally when you get a receipt, rather than a bill. For example, if the business owner buys fuel using the company debit card, this doesn’t need to be entered as a bill. You can just enter it using Cash/Other Expense or Cheque Expense.
1. Setting up suppliers Creating a new supplier record in QuickBooks Online Essentials is similar to creating a new customer. It uses the Supplier List to hold information about the companies and people from whom you buy goods and services to run your business. For example, the list could include subcontractors, utility companies, and your office supplies vendor. You can add a supplier at any point.
Choose the Suppliers option from the left hand side of the screen
The Supplier window will then open.
ADD A SUPPLIER
Click New Supplier from the top right.
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Enter a display name in the Display Name As field. This is the main name used on screens, lists and registers. Tip you can click the arrow next to the field to switch this to a different format, or even to the Company Name.
Enter the necessary address an contact details
Enter your terms
Enter your account or customer number with this supplier in the Account No. field. This will appear in the memo of bill payments
Click Save
Exercise 7 Add a supplier
From the Supplier Centre add a New Supplier Fill in name, terms and account number
2. Supplier Bills ENTER BILLS If you record your bills and invoices as soon as you receive them, QuickBooks Online Essentials can help you to manage your bills and cash flow. Successfully managing the relationship with your creditors can have a positive impact on your cashflow, your relationship with suppliers, as well as the financial health of your business. It is just as important to pay attention to the credit that your suppliers give you as it is to the amount of credit your give your customers.
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Click the Transactions tab from the menu bar. Select Expenses. From the top right hand corner from the Create drop down choose Bill This opens the Bill window
BILL DETAILS
Choose the supplier you want from your contact list, or click Add New to add a new supplier.
Choose the terms the supplier is giving you. QuickBooks Online Essentials will use these terms to show the due date.
Rather than choosing terms, can select a specific due date instead.
Enter the bill date shown on the bill. Your supplier may call this the Invoice Date
Add the reference number for this bill in the Bill No. field. It will usually be the invoice number that your supplier has put on the bill.
If you are VAT registered, choose whether you would like the bill to display the amount in the table below as: - Tax Inclusive – the gross value will show with VAT at the rate specified in the VAT column included. The total amount of VAT included in this bill will show at the bottom of the invoice just above the total - TAX Exclusive – the net value is displayed with VAT calculated at the bottom of the invoice just above the total.
Under the Account drop down choose the expense account that the bill applies to. If the bill divides into more than one category, particularly if those categories have different VAT settings, then you’ll need to divide the bill up into its components and post it as two or more different bills in QuickBooks Online Essentials. You can also choose to add a new Expense account in
Enter a description. For example, some notes about what the bill was for. This is particularly important for bills in tax-sensitive categories, such as legal and professional fees, purchase of capital assets or sundries.
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Enter the amount, either inclusive of VAT or exclusive of VAT, depending on the option you chose above. If you are not registered for VAT, enter the gross value including VAT.
If you are VAT registered, choose the correct VAT rate.
MAKING A RECURRING OPTION You may have recurring bills, for example where you have a standing order or direct debit set up to pay on a regular basis. In Recurring Template, you can tell QuickBooks Online Essentials how frequently a bill recurs. Then the system will put it in for you in the future, so you don’t need to go through the routine of creating a new bill every time. You can edit a recurring bill if the charge is slightly different each time, for example for telephone bills.
Click Enable Recurring at the bottom of the screen
Enter template name.
If you are creating a scheduled or reminder type of
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recurring template click Edit Schedule.
Select the interval for the recurring transaction.
Select the date to start the payments and then the date to end them.
Choose your notification options. For a reminder, enter the number of days before the due date that you want a reminder to arrive.
Click Save Template.
Click Save to save this bill.
You will get a confirmation that the bill has been added.
VIEW YOUR OUTSTANDING BALANCE To keep track of your bills with each supplier you can view the Supplier Window.
Click on the Supplier tab and this will open up the Supplier Window To view all the transactions for a certain supplier click on their name You will now see a summary of all their transactions
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Exercise 8 Enter Bills
Enter in a bill from your existing supplier View this outstanding bill in the Supplier Summary screen
PAYING BILLS When you have paid your supplier, you will need to tell QuickBooks Online Essentials that you have paid the bill.
Click Transactions then Expenses
Next to the bill you will see a Make Payment button
All the fields will be prepopulated, however these can be changed for example if you have not paid the bill in full
Once the details are correct click Save and Close
Exercise 9 Pay Bills
Pay the bill you created in exercise 8 from your main business bank account
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Add your notes about entering and paying bills
3. Expenses There will be costs that the business pays straight away – normally when you get a receipt, rather than a bill. You may not want to track these costs as bills, but simply record each payment instead. This might be expenses from petty cash, or payment made directly by credit or debit card or indeed by cheque.
From the menu on the left hand side choose Transactions
From the drop down in the top right select Expenses
ENTERING PAYMENT DETAILS •
You can record the name of the supplier in the top left or simply call this October Expenses if you are going to put more than one expense on here
Select the bank account that the money was paid from, for example, Current account or Petty Cash.
Enter in the payment method
Select if the amount is Tax Inclusive or Tax Exclusive
Under Account choose the Expense Account this needs to be assigned to
Enter a description of what the payment was for. This is in case your accountant needs more notes, or your books are inspected by HMRC. It is also good practice to number receipts and put the receipt number in the description field.
Enter the value of the expense in the Amount field.
Select the correct VAT code.
Repeat the process, adding each expense receipt on a new row until have entered all your receipts.
Click Save and Close in the bottom right hand corner.
You will see a
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confirmation that the expenses have been entered
Exercise 10 Expenses
Record an expense that you pay for upfront, out of your Petty Cash bank account
Add your notes about recording Expenses
Part 4 Banking 1. Bank Transfers This option allows you to move money between your banks accounts. For example:
Transferring to and from your deposit or current accounts
Paying off your credit card bill.
Banking money from the till.
RECORD A BANK TRANSFER
At the top of the screen click on X sign
This then opens up another window
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Under the Other column select Transfer
Select the bank account the money is going into in the Transfer Funds To field.
Enter the amount of the transfer.
You might want to write a memo giving the reason for the transfer. For example, Weekly Takings or Petty cash withdrawal.
Click Save and Close
Exercise 11 Bank Transfers
Record transfer from your petty cash account to your main current account for banking cash sales.
Add your notes about transfers
2. Bank Reconciliation Bank reconciliation (sometimes called balancing accounts) is a way to compare statements issued by your bank against information you’ve entered in QuickBooks Online Essentials. This is very important because it allows you to catch mistakes – like things you forgot to enter or may have entered twice. It is particularly important to do this before you file your VAT return. To reconcile within QuickBooks Online Essentials, you must first get your ending bank balance from your bank statement or online banking.
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From Company Cog in the top right under the Tools options select Reconcile
Choose the bank account you want to reconcile.
Click Reconcile Now.
The Statement Ending Date is the date of the bank statement.
Enter the Ending Balance of the bank statement.
If you know you have had bank service charges or interest earned, enter the details.
Click OK.
This produces a list of all the money that has been recorded in and out of QuickBooks Online Essentials.
When the transactions are showing on your bank statement, you must then tick the transaction in QuickBooks Online Essentials.
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The difference is at the bottom of the screen and should say £0. If the difference is not £0, here are a few things to look for:
If a transaction on your bank statement is not shown on the Reconcile screen, enter it now and reconcile again.
If a transaction looks incorrect, check it, click on it to correct it and reconcile again.
If a transaction has not cleared yet, leave it unticked to check again when you next reconcile. If you want to make an adjustment as a discrepancy without tracing the source for the difference, you can do this in the next step.
When you are ready to reconcile click Finish Now.
If there is still a difference, a warning will appear. Click Add Adjustment to continue.
A Reconciliation Report will be produced.
Once you have run through these steps, your bank reconciliation is complete. Any changes you have made will be posted to your QuickBooks Online Essentials transactions. Your transaction list in QuickBooks Online Essentials should now match your bank statement.
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Exercise 12 Bank Reconcile
Start to reconcile your main bank account Enter today’s date as the statement ending date Enter a fictional ending balance View the transaction window Leave without saving by choosing Finish Later
Add your notes about Reconciliation
Part 5 VAT and Reporting 1. VAT Returns If you are registered for VAT, you will need to run a quarterly VAT return to calculate how much VAT you owe HMRC and also how much you can reclaim. Within QuickBooks Online Essentials, the VAT is calculated automatically on transactions when the appropriate VAT rate has been applied.
PRODUCING A VAT RETURN
From the VAT tab choose Prepare VAT.
Check the filing period frequency and dates.
Review the detail area; it shows all the lines in the VAT return, with the balance owing or receivable at the bottom.
To see individual amounts that make up a line, click on the line then click View Transactions.
If you need to make an adjustment, click Adjust.
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SUBMITTING YOUR VAT RETURN Once you’re confident that you’ve correctly entered all your transactions into QuickBooks Online Essentials for the VAT return, mark it as filed:
Click File online with HMRC
QuickBooks Online Essentials then launches a separate window to HMRC’s website.
When you’ve finished filling out the online return, close the HMRC window and return to QuickBooks Online Essentials.
Click Mark as filed at the bottom right of the screen.
QuickBooks Online Essentials will then create a bill for the amount owing to HMRC.
When a VAT return period has been marked as filed, you won’t be able to change any transactions, or enter any new ones, dated during that period.
Exercise 13 VAT calculation
View your VAT report Mark as filed
Tip: Before you can submit your VAT return to HMRC online, you must have registered and enrolled for the VAT online service. For more information go to www.hmrc.gov.uk
HOW TO RECORD WHEN YOU HAVE PAID HMRC
In the VAT section, choose View VAT History
Select Record a Payment.
Fill in the Payment amount and Memos fields.
Click Save.
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Exercise 14 Pay VAT
Process your VAT Payment/ Refund using your main bank account
Add your notes about VAT
2. Accounting Reports QUICKBOOKS ONLINE ESSENTIALS REPORTS One of the most powerful features in QuickBooks Online Essentials is its reporting function. It enables you to analyse your business in detail and drill down to see which transactions are included in the report. This feature helps you stay in control of your business. REPORT LIST Here you can access and explore what each report does from the Reports tab on the menu on the left hand side
COMPANY SNAPSHOT The Company Snapshot report gives you a great overview of the money coming in and going out of your business. To access the report:
Go to the Reports tab and select Company Snapshot.
Tip: You can click on the Income and Expense pie charts to "drill down" to more detailed reports.
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When the report opens you will see four sections:
In the top-left box you will see a graphical representation of the five income accounts with the most income for the selected period. All other accounts are listed in the Other category.
The top-right box will show a pie graph of the five expense accounts with the greatest expenses for the selected period. All other expenses are listed in the Other category.
The next set of boxes are Previous Year Income and Expense Comparison charts. These charges have been added so you can compare income and/or expenses from year to year. You can click on the chart itself to see the detailed data used to make up the chart.
The bottom- left box lists all the customers who owe you money and their current open balance amount.
The bottom-right box shows all the suppliers you owe money to and your current open balance with them.
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PROFIT AND LOSS The Profit and Loss Report tells you what happened between two specific dates. It tells you whether you are – or were – trading profitably over any fixed financial period. It is one of the two types of annual account (the other is the Balance Sheet) that limited companies have to file with Companies House every year. A Profit and Loss Report analyses your income and outgoings, and strips out any extraordinary income, such as the one-off sale of a piece of machinery, which would distort your true profitability. For example, if it was only the sale of your car that kept your business in the black, the company is not financially secure – you cannot keep reselling the same asset.
From the Reports tab choose Profit and Loss.
In Transaction Date select the period you want to view.
Click Run Report.
The Profit and Loss Report for this year to date will be displayed.
Numbers that represent more information show a hand cursor and blue underlining when you move the mouse over them. Click the number to go to the detail.
To return to the report, click your browser’s Back button. BALANCE SHEET A Balance Sheet shows everything that your business owns (its assets) and everything it owes (its liabilities) at a given moment in time.
From the Reports tab choose Balance Sheet. Exercise 15 Reports
View your Profit and Loss report for this year to date
Add your notes about reports
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QUICKBOOKS ONLINE ESSENTIALS TECHNICAL SUPPORT If you need any technical support with QuickBooks Online Essentials, you can call 0845 6080280. Our lines are open from 9am to 5.30pm, Monday to Friday. CONGRATULATIONS You now know the basics of how to use QuickBooks Online Essentials and what you can use it for, so you can start using it straight away.
Getting Started Checklist Company name and address
VAT registration number and information
QuickBooks Online Essentials Start Date
Bank statements
Client and supplier balances Credit card balance
PAYE reference number and liabilities
Assets and liabilities
Fixed assets
You’ll need both the trading name and legal name of your business. The legal name is the one you use when you file taxes. The trading name is the name you use on invoices, statements, etc. These can be one and the same. If you registered for VAT with HMRC, you will have been issued a VAT registration number. You need to know this number – as well as the VAT scheme you are registered for and when your VAT reporting quarters are (e.g. July/Aug/Sept, with VAT due 31 Oct). Decide on the first day that you want to start keeping records in QuickBooks Online Essentials. If you just started trading, the start date should be the day you formed the limited company with Companies House, or the day you told HMRC you started trading (sole traders). If you are an established business, a good start date is the first day after the end of your last financial year. If you have recently started trading you need to have all the bank statements beginning from your start date, as well as a list of cheques that have been written but did not clear your account yet. If you have filed year end accounts in the past, you will also need a list of cheques that were yet to be cleared at your last year end date. You will need to know the amount each client owes you and the amount you owe each supplier at the start date. You will need to know the balance on each of your business credit cards. If you pay employees you should have been issued a PAYE reference number by the tax office. You can find it on the front of the yellow payslip booklets (P30BC) sent out by HMRC. You will also need to know the amount of PAYE and National Insurance outstanding at the start date. You need to know the balance of what your business owes (liabilities) and what it is owed (assets). If you had stock on your start date you need to know its value. You need to know the value of each category of each fixed asset, such as the total of your vehicles, office equipment or computer equipment.
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LESSON 8 Technical troubleshooting tips What are the system requirements for MyBusinessWorks? Operating systems The following operating systems are compatible with MyBusinessWorks: • Microsoft Windows XP SP3 and above, including server versions • Mac OS X 10.4 and above, desktop and server versions
Browsers The following browsers are compatible with MyBusinessWorks: • Microsoft Internet Explorer version 7 and above • Mozilla Firefox version 3.5 and above • Apple Safari version 4 and above • Google Chrome version 7 and above JavaScript must be enabled for the service to work properly. Adobe Flash, Adobe Reader and other plugins may also need to be installed on request. What if I have not received the activation email? You can activate your details by entering the URL on your order form and putting in your registration code. You will also receive another activation email a week after subscribing. Where can I find my registration code? You can find your registration code on the copy of the order form you got from your Barclays Business Manager when you bought MyBusinessWorks. What happens if I have lost the order form and do not know my registration code? If you have lost your order form, you can get a copy of it by speaking to your Barclays Business Manager. You can also contact the MyBusinessWorks support team on 0845 6080 280. What happens if my email address has changed since I completed the MyBusinessWorks order form? You can still activate your details by entering the URL and registration code on your order form. You will need to use your previous email address at first but, once you have activated the details, you can edit your profile on the MyBusinessWorks portal.
Got another question? Don’t worry, our MyBusinessWorks telephone support team are here to help. You can email us on
[email protected] or call us on 0845 6080 280, Monday to Friday from 9am to 5:30pm (excluding UK bank holidays). We will respond to your email within 24 working hours.
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Glossary Glossary of common business terms Articles of Association – this sets out the rights of the shareholders and the powers of directors in a limited company. Asset – property owned by the business that has a monetary value – usually stock, business equipment or premises. Audit – the process of checking items in a set of accounts to make sure they agree with the original information (e.g. checking stock values against the original purchase and sales invoices). Audit trail – a list of transactions in the order they were recorded. Award – a sum of money acknowledging achievement in competition with other businesses, and therefore not a guaranteed source of funding. Balance sheet – a summary of all the assets and liabilities of a business at a particular time, usually prepared at the end of each financial year. Business plan – a document that sets out your business goals, how the business will operate, and what resources will be needed. This is supported by financial forecasts. Capital equipment – equipment such as plant and machinery, which is used to produce goods and services. Capital Gains Tax – when a fixed asset is sold in excess of its original cost, the profit may be liable to Capital Gains Tax. Calculating the tax can be complicated - taper relief adjustments for inflation and other allowances all need to be considered. Cash accounting – an accounting method where only invoices and bills that have been paid are accounted for. For most types of business in the UK, as far as the HM Revenue and Customs is concerned, any invoice (paid or not) which you issue must be treated as revenue and accounted for. Cash flow – a report which shows the actual flow of money in and out of the business over a particular period of time. Cash flow forecast – a report showing the estimated cash flow based on future plans.
Certificate of Incorporation – this document is issued by the Registrar of Companies once all relevant documents have been satisfactorily completed. A company is only recognised as a legal entity when this document has been issued, and it is only then that it can start to trade. Class 1 National Insurance Contributions (NIC) – are payable by all employees and directors based on their salary. In addition, the company or business is also liable to pay employer contributions. Class 2 National Insurance Contributions (NIC) – are payable by all self-employed individuals (sole traders and partners) at a flat rate for every week of self-employment. Class 4 National Insurance Contributions (NIC) – are payable by all self-employed individuals (sole traders and partners) whose taxable profits are greater than the lower limit specified by HM Revenue and Customs. Companies House – all UK limited companies have to register at Companies House, an Executive Agency of the Department of Trade and Industry. The main functions of Companies House are to incorporate and dissolve limited companies, examine and store company information delivered under the Companies Act and related legislation, and to make this information available to the public. Company Secretary – a company official who ensures that a limited company’s statutory obligations are met. Construction Industry Scheme (CIS) - The Construction Industry Scheme (CIS) sets out the rules for how payments to subcontractors for construction work must be handled by contractors. The scheme applies mainly to contractors and subcontractors in mainstream construction work, however businesses or organisations whose core activity isn’t construction but have a high annual spend on construction may also count as contractors and fall under the scheme.
Corporation tax – this is payable by limited companies to the HM Revenue and Customs based on their taxable profits. Cost of sales – costs relating to the production of an item for sale (e.g. the cost of raw materials). Credit – credits are a record of transactions in the business’s books. For example, if a £50 cheque is paid by the business for petrol, the credit and debit entries in the books using double-entry bookkeeping would be: CREDIT Bank £50 (increase in liabilities on the balance sheet). DEBIT Purchases £50 (purchase on the profit and loss account). Credit note – a sales invoice cancelled in full or part. For example, you issue an invoice for £100, the customer returns £25 worth of goods, and you issue the customer with a credit note owing the customer £25. Creditors – suppliers or third parties to whom the business owes money. Current assets – assets such as stock, money owed by debtors (for goods, services or materials not yet paid for) and cash. These are held for short term (less than one year) use within a business. Current liabilities – amounts which you’re obliged to pay out in the short term (less than one year). These include amounts owed to trade creditors (who have supplied goods, services or materials not yet paid for) and money borrowed e.g. a bank overdraft. Debit – debits are a record of transactions in the business’s books. For example, if a business asset is sold for £250 cash, the debit and credit in the books using double-entry bookkeeping would be: DEBIT Bank £250 (increase in assets on the balance sheet). CREDIT Sales £250 (turnover on the profit and loss account). Debtors – customers or third parties who owe money to the business. Directors Loan – Created if a director lends their business money. Dividend – a payment made to shareholders who have invested in the business.
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Drawings – general living expenses that can be taken out of a business by the owner. Double-entry bookkeeping – a system which accounts for every aspect of a transaction – where it came from and where it went to. This ‘from and to’ aspect of a transaction (see Credit and Debit) is referred to by the term double entry. Equity Funding – also known as shareholder funding. This is money put into a business by its owner(s) or from external investors. Expenses – goods or services purchased for running the business. This doesn’t include purchases relating to sales or any items of equipment such as fixed assets. Fixed assets – property such as buildings, machinery and capital equipment that is bought for longterm use in a business and is not intended for resale. Goodwill Payment - A payment made to someone or a company where this is no legal obligation to do so. It is usually done to retain the business of a specific customer Grant – usually a one off payment by a charity, the government, a local authority or business support agency to help finance a business. Gross profit – turnover less cost of sales. If the resulting figure is negative, this represents a ‘gross loss’ rather than a profit. Hire purchase – funding for assets that you can use for a fixed time period whilst making regular fixed payments. When all the payments have been made, the asset belongs to your business. Income – turnover plus any nontaxable income e.g. dividends received. (See Revenue.) Invoice – an original document either issued by a business for the sale of goods (a sales invoice) or received by the business for goods bought (a purchase invoice). Journal entries – a term used to describe the transfer of an item in the books and records.
Leasing – funding for assets that you use for a fixed period whilst making regular fixed payments. The asset never belongs to your business; ownership is kept by the company supplying it. Ledger – also called the nominal ledger. A book in which entries recorded in the books and records are analysed. Liabilities – represent what a business owes. This includes bank overdrafts, loans taken out for the business and money owed by the business to its suppliers. Limited company – a business that has a legal identity separate from the people who own it (the shareholders). Their share of any profits, or liability for any debts, is limited to the amount of shares they own. Limited Liability Partnership (LLP) – a LLP offers businesses such as solicitors and accountants the flexibility and tax status of a partnership but has the advantage of limiting personal liability for the businesses debts. LLPs need to be registered with Companies House. Limited partner – a limited partner can be an individual or a company. The partnership must have at least one general partner with management rights and unlimited liability and at least one limited partner. Liability for debts is restricted to each partner’s financial contribution. Loan – an amount of money that you borrow for an agreed period of time. You normally repay this in fixed monthly instalments. Long-term liabilities – these usually refer to long-term loans (i.e. a loan which lasts for more than one year such as a mortgage). Memorandum of Association – this document records the name and Registered Office of a limited company as well as its purpose (the object) and its liability. Net profit – income less total costs, including cost of sales and expenses. (Where this results in a negative figure, this represents a ‘net loss’ rather than a profit.)
Notary public – a person authorised to perform certain legal formalities, in particular to draw up or certify contracts, deeds, etc. Off-the-shelf limited liability company - this is a company which has already been formed as a non-trading company by a formation agency. When it is sold, new details are registered with Companies House. Overdraft – a way of obtaining short term finance by borrowing money from a bank up to an agreed limit, usually on a business current account. Overheads – the general costs involved in running a business. They consist entirely of expense accounts (e.g. rent, insurance, petrol, and staff wages). Partnership ACT 1980 – the legislation that governs partnerships Partnership – a business set up by two or three people. Its legal identity is not separate from its owners, who share profits according to the terms of the partnership and have unlimited liability for any debts. P.A.Y.E (UK only) – ‘Pay as you earn’ is the name given to the income tax system where an employee’s tax and National Insurance Contributions are deducted before their wages are paid. Petty Cash – a small amount of cash kept on hand by a business for incidental expenses Private equity company – a company that helps investors make decisions about investments in smaller businesses. They may also provide consultancy and support services to business. Private limited company (Limited or Ltd) – a company that is privately owned – shareholders are usually family members, acquaintances or employees. Its legal identity is separate to that of its owners. Public limited company (PLC or plc.) – a company which is authorised to sell its shares to the public. Its legal identity is separate to that of its owners and it must have a minimum authorised share capital of £50,000. PLCs may or may not be listed on the stock exchange.
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Profit and loss account – an account made up of income, cost of sales and expenses which shows the current profit or loss earned by a business over a particular period (i.e. whether a business has earned more than it has spent over the period). The profit and loss account is usually prepared for the 12-month period to the financial year end. Purchase ledger – a separate ledger which shows the full accounts of a business’s suppliers. A record of purchases is also included in the nominal ledger which shows the outstanding balances owed to individual suppliers. Receipt – a term typically used to describe confirmation of a payment (e.g. If you buy some petrol you will normally ask for a receipt to prove that the money was spent legitimately). Reconciling – the procedure of checking entries made in a business’s books with those on another statement or ledger (e.g. checking a bank statement against your own records).
Self-assessment tax return – this form is issued by the HM Revenue and Customs to all selfemployed individuals, as well as company directors and other individuals who have more complicated tax affairs. The return brings together all the figures HM Revenue and Customs needs to calculate and check on individuals’ liability for tax. This information can be completed and calculated online. Share – a share is a legal document of ownership over part of a company. A shareholder is normally entitled to a proportionate share of any profit or dividends. Shareholder – limited companies are ultimately owned by their members. In the case of a company that issues shares, its members are shareholders i.e. persons who own ‘shares’ of the company’s capital. Sleeping partner – a person who makes a financial contribution to a partnership but who is not involved in the day-to-day running of the business.
Registrar of Companies – the Registrar of Companies manages all paperwork handled by Companies House. There is a separate registrar for England and Wales, Scotland, and Northern Ireland.
Sole trader – a business that is owned, developed and managed by one person, who is entitled to all profits and is responsible for all its liabilities. The business’s legal identity is not separate from the owner.
Retained earnings – the profits earned by a business after its expenses have been paid. These are kept in the business to provide extra working capital or to buy equipment or asset
Stock – goods manufactured or bought for resale by a business. Raw materials used to produce goods for resale may also be classified as stock.
Revenue – the sales and any other income of a business (e.g. interest earned from money on deposit). (See Income.) Sales – income received from selling goods or services. (See Revenue.) Sales ledger – a separate ledger which shows the full accounts of a business’s customers. A record of sales is also included in the nominal ledger which shows the balances owed by individual customers. Security – an asset which is legally assigned to a lender when borrowing. If the borrowing isn’t repaid, the lender can recover their money by selling this asset.
Turnover – the income of a business over a period (usually a year). Value Added Tax – VAT is a tax administered by the HM Revenue and Customs on behalf of the Government. The standard rate of 20% (at February 2011) is added to the selling price of goods or services. Any VAT incurred on goods or services purchased by a company may be offset against the VAT charged by the business and the net balance only paid to the HMRC. Other rates include Zero Rated, Reduced Rate at 5% (at Feb 2011) and exempt (see www. hmrc.gov.uk for more information) Venture capitalists – investors who finance private companies in return for a share in the business. Wages – payments made to the employees of a business for their work on behalf of the business. These are classed as expense items and must not be confused with ‘drawings’ where money is taken out of the business by sole proprietors and partners for their own use. Working capital – also known as net current assets. The current assets of a business less the current liabilities.
Stock taking – the process of physically checking a business’s stock for total quantities and value. Trading account - an account that shows turnover less cost of sales and the resulting gross profit or loss of a manufacturing or retail business. Transaction – entries that are recorded in a journal which correspond to an original document such as a sales invoice or purchase receipt. Trial balance – a statement showing all the accounts used in a business and their balances at a particular time.
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Appendix Your Mindleaders training and development plan Course Name
Key Skills
Date for Completion
Completed
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Notes
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