Course Contents

have instructions and examples to help you. Part 4 Planning your Marketing. As mentioned earlier, every good business plan should include a marketing ...

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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 LegalManager?...... 13 Part 2 What common compliance issues can LegalManager 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 LegalManager............. 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 …………………………………………


Part 4 Support for your site ……………………………………………… 36 LESSON 6 Data backup Why is it important to back up your data?........... 37 What is mozypro?...................................................... 37 Your mozypro.............................................................. 37

LESSON 7 Financial management Why is financial management important?........... 43 Part 1 Getting started.................................................... 43 1 Signing up........................................................... 43 2 Setting up your details..................................... 43 3 Overview page........................................................ 46 4 Help and support................................................... 46 5 Introducing the Chart of Accounts................... 47 6 Adding a new income or spending category

....... 47


7 Creating a new bank account.............................48 Part 2 Money in...................................................................... 49 1 Setting up customers........................................... 49 2 Invoicing.................................................................. 51 3 Sales receipts......................................................... 57 Part 3 Money out................................................................... 58 1 Setting up suppliers.............................................. 58 2 Supplier bills........................................................... 58 3 Bank Payments

........................................................ 61

Part 4 Banking........................................................................ 62 1 Bank transfers........................................................ 63 2 Bank reconciliation............................................... 64 Part 5 VAT and reporting...................................................... 66 1 VAT returns............................................................. 67 2 Accounting reports............................................... 69 Getting started Checklist........................................................ 72

Troubleshooting Technical troubleshooting tips.............................................. 73 Glossary Glossary of common business terms.................................. 74 Appendix Your MindLeaders training and development plan.......... 77 Notes................................................................................................. 78


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 FreeAgent - 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 LegalManager 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.


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. To logon you must enter your email address and password.

The MyBusinessWorks portal 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 For additional services you can purchase these through the MARKET Tab:-



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.

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.


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.


Type your headings like this

Click here to add your financial data

Choose how to forecast your sales

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.

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 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.


LESSON 3 Legal compliance Helping you stay compliant To help you address the most common compliance issues for your business, you have access to LegalManager 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 LegalManager?       

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 LegalManager can help you with? You will find all the information in your LegalManager 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 LegalManager 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 LegalManager service. Then you will have 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. LegalManager 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 LegalManager 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.

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 LegalManager 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

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 1.1 million people suffered from a work related illness in 2011/12 and there were 591,000 self-reported injuries at 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 LegalManager 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 LegalManager Service provides you with: -


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 LegalManager Before you access your LegalManager service please make sure you are connected to the internet. Then from within MyBusinessWorks, click to launch “LegalManager” 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:


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 LegalManager 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.



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.


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


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


Creating a partnership

Covers how to set up a Partnership

Liability of partners

Explains the different types of liabilities

Sole traders


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


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

 

Domain names

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

Covers Registration and re-registration, and Fees for transfer


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

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


Covers the common cause of accidents, slips and trips, and reporting accidents


Covers using Visual display units, and how to treat disabled workers


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


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


Covers noise in relation to Health & Safety and employers’ legal duties


Covers the regulations, types of vibrations and vibration levels

Vulnerable employees

Assessing stress

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 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

Covers what it is, regulations required and the use of

Fire assessment risks


Document templates include: Domain name transfer agreement Covers a customer’s right to cancel and the cooling off period


regulations explained

(WAHR) Regulation 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


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


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


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

 

Includes how to set up a tenancy Document templates include: Residential and assured shorthold tenancy agreement

Rent and deposits

Covers rent reviews, increasing rent and rent arrears

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

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


Debt recovery

Recovery of debt through third parties How to recover debt yourself


Discipline and Dismissal

Employment claims

Employment Tribunal


Covers the types of property purchase contracts 

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 Arbitration Service (ACAS), steps before the hearing and the hearing Covers information about the key provisions, the types of redundancy, Employers’ obligations and redundancy payments

Disciplinary procedure

 

Includes setting out disciplinary rules, informal and formal disciplinary documents, penalties and appeals Document templates include: Employee



Employee rights

Work time regulations

Flexible working

Discrimination and equal pay

Employing Staff

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


Explains employers’ obligations to offer stakeholder pension scheme when they have 5+ employees, and the types of schemes


 

Employment contracts


 

Covers the recruitment process, all appropriate documents, background and 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

Unusual employees

Covers employing international students, staff with criminal convictions, and working holiday makers


Covers distance working, contractual issues, data



protection, equipment provision and Health & Safety Part-time working

Flexible working

Covers part-time employees’ rights, rate of pay, fair treatment of part-time workers  


Grievance procedures

 

Sickness absence

Intellectual property

Protecting your ideas

Copyright and trade marks

Self certification

 Statutory sickness pay

Passing off

Non-disclosure agreements

Includes alternatives to non-disclosure agreements and covenants in restraint of trade


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


UK sales and

Design rights


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

Sales contracts

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


and sales agreements

agreements Consumer protection Competition law

Agency distribution agreements

Money Laundering

Privilege and privileged circumstances

Obligations and good practice in the regulated sector

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 


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


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

Internal control and monitoring compliance

Covers how monitoring businesses is achieved


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


Explains which staff should be trained and how frequently, and covers the criminal sanctions and defences


Anti-money Laundering

The legal and regulatory framework

Get advice on how to stay compliant with Anti-Money Laundering regulations


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.

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



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 Business Management/Sales and Marketing

Setting Goals and Business Planning Spotting and seizing opportunities Communication

Add to Plan

Communication/Leading Teams



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

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. 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.

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.

Helpful Tip Don’t forget at the start of many of the courses in MindLeaders you can take a quick Skills Assessment to


3. Now prioritise this list, and rank the skills you need to acquire first at the top.

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.



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.


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’.


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.

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’.


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.

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 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.


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’.

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.


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’.


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. for help.


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. 1. Select Back Up Sets

2. File System

3. Options

4. History

5. Restore

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’.


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!


LESSON 7 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 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 with FreeAgent 1. Setting up your details To speed up the process of creating your company file, you will need to gather various bits of information before you start. Have a look at the Getting Started Checklist on page 58 for more help.

Your company details Company name Enter your company name here. Company type UK-based businesses have a choice of four account types: • UK sole trader • UK partnership • UK limited liability partnership • UK limited company It’s important you choose the one that matches your business; otherwise you won’t see the correct tax calculations or relevant options on the screen.


COMPANY DETAILS Company address Fill in your business address details. These details will appear on your invoices automatically. Company registration number If your business is a UK limited company, fill in the company registration number. You are legally required to put this on your invoices. If you miss out any essential information this warning will appear:

You then need to go back and fill in the gaps so you can carry on.

ACCOUNTING DATES Company Start Date This is the day your business officially started. For sole traders and partnerships, this will be the day you told HMRC it began trading. For limited companies, it will be the incorporation date, as shown on the certificate of incorporation issued to you by Companies House. If you’re not sure what your Company Start Date should be, ask your accountant. First Accounting Year End Date FreeAgent will use the First Accounting Year End Date to set the year end date for future years. So if your first accounting year finished on 31 December 2010, FreeAgent will work out your second year to 31 December 2011. It will produce a report ending on your first accounting year end date and for each year after that. FreeAgent Start Date This is the date you start keeping your books on FreeAgent. It might be today’s date, or you might


decide to start keeping your books on FreeAgent from a new VAT quarter, or the start of a new accounting year for your business.

Once you have chosen your FreeAgent Start Date, you shouldn’t enter any transactions dated before that date. All your opening balances will be in line with the FreeAgent Start Date.

UK VAT Registration This is where you fill in your VAT information. FreeAgent needs your VAT details to make sure VAT reporting can be carried out in an accurate and timely manner. If you are VAT registered, you should enter your VAT registration number here.

ADD A BANK ACCOUNT Banking lies at the heart of FreeAgent. By analysing what goes in and out of your bank, FreeAgent builds you a true picture of your business accounts. The only compulsory fields when adding a new bank account are the Account Name and the Opening Balance. Once you have put this information in, wait a few moments while FreeAgent creates your company. You will then be taken to the Overview page and you’re ready to start


2 Overview Page The Overview page is the first screen that appears when you launch FreeAgent. It provides the big picture of how your essential business tasks fit together, making it more intuitive and easier to find your way around.

3 Help and support You’ll find extra support and access to the comprehensive FreeAgent Knowledge Base which is at the bottom of each page or at You can also email for support on a specific topic or question.


4 Introducing the Chart of Accounts The Chart of Accounts is the most important list in FreeAgent. 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. The government requires all companies to publish annual financial statements, although smaller companies only need to publish them in abbreviated form. The accounts set up by FreeAgent in the set-up process make up the Chart of Accounts. This list will help you set up appropriate accounts for the kind of information you want to work with in FreeAgent. The ability to change the income and expense categories is one of the ways you can customise FreeAgent to meet the needs of your company.

5 Add a new income or spending category To add a new category, click,

then click ‘Income and Spending Categories’.

Click ‘Add New’ and choose which type of new category you want to add. For example, choose: • ‘Income’ if you want to split your sales into different income streams • ‘Cost of Sales’ for costs that relate directly to the sales you make (for example, if you’re a jeweller this would be purchases of metal and precious stones) • ‘Admin Expenses’ for all your other day-to-day business costs. At the moment, you can only set up new income or spending categories, that is, profit and loss account categories. You cannot create new balance sheet categories, except for new bank accounts.


Once you have chosen your category, enter a description for the new account. Here’s an example:

6 Creating a new bank account You can manage all your bank accounts and transactions by clicking ‘Banking’. You can Add a new bank accounts in FreeAgent to reflect your own business bank accounts, for example savings accounts.

When you first set up your company in FreeAgent you were guided through setting up your main bank account. FreeAgent treats this as your primary bank account, which means it will put these bank account details on the invoices you generate, so that your clients can pay you online.


It makes good sense to set up and use the bank accounts in FreeAgent to mirror the way you use your actual bank accounts. To open the Bank Accounts area, select ‘Banking’. To create a new bank account, select ‘Add New’, then ‘Bank Account’. Enter the relevant details, and then click ‘Create New Account’. The Opening Balance is the balance at the start of the day of your FreeAgent Start Date – which is the balance at the end of the previous day. For example, in this case, you would look at your bank statement for 01 July 2012 and put the balance at the end of that day in here.

“Bank” account for cash Dealing with business cash in FreeAgent 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.

Part 2 Money in 1 Creating new customers You can set up and view customers from the Contacts area. Here you can see all your business contacts, both customers and suppliers. A contact becomes a customer automatically when you enter an invoice or estimate for that contact. Similarly, a contact automatically becomes a supplier when you enter a bill from that contact.


To create a new customers, click

from the Overview page, then click

to open the New Contact screen. Many of the boxes on this screen are optional. The boxes that you have to fill in are marked with red asterisks.

CONTACT DETAILS Name Enter a first and last name and/or organisation name for the contact.

FURTHER CONTACT DETAILS You can enter the contact’s email addresses and phone numbers here.


Enter the postal address where you will send customer invoices.

INVOICING OPTIONS Contact-level numbering sequence You may want to tick this box to set a specific sequence for invoices you issue to this contact. For example, you might want to prefix the invoice number with the initials of the customer or business. Display names on invoices Here, you have the option to display the contact’s individual name, as well as the organisation’s name, on the invoices. This is useful if you need to mark the invoice for a particular person’s attention, for example the bookkeeper or purchase ledger clerk.

Charge VAT Sometimes you may have clients that do not need VAT added to their invoice, depending on where you are delivering services to them. So you have the option to: • charge VAT only if the client is based in the UK (which is the default) • always charge VAT • never charge VAT. VAT registration number Enter the customers VAT


registration number here, if you know it.

Choice of language You can issue invoices and estimates to your customers in several different languages. Choose your language by clicking the drop-down arrow. When you have filled in all the details, click .

VIEW CUSTOMERS You can view your ‘Contacts in a grid view or in a list view by clicking on these symbols this will switch between the two.

CHANGING A CONTACT’S DETAILS If you want to change any details for a contact, from the overview screen, click the pencil icon for that contact. Or, with the contact open, click ‘Edit Details’ at the top of the Contact Details screen.

IMPORTING CONTACTS If you already have an existing list of contacts it may be easier to import that list into FreeAgent. Click and follow the on-screen wizard instructions.

2 Invoicing You can use FreeAgent to create professional invoices to send to your customers. Here’s how to create a new invoice from scratch. Click on ‘Work’ and select ‘Invoicing’. To create your first invoice, click

After you have created your first invoice you’ll


see a list of invoices. You can then click

to create a new one.

INVOICE DETAILS Customer contact Select the name of the customer you are producing this invoice for. Project/Contract If you’re producing this invoice as part of a project or contract, select it from the drop-down menu. Invoice reference number FreeAgent then automatically gives the invoice a reference number. Invoice date Enter the date you create the invoice here. Payment terms Enter the number of days your customer has to pay the invoice. Currency Select the currency you would like to use for this invoice. For more information about multi-currency, see knowledge base guide Multi Currency Invoicing. Additional text You can use this to display a client message on the bottom of the invoice. For example “Please make payment to A/C 12345678 Sort Code 12 34 56 using the invoice number as the transaction reference”. You can set this as default for all invoices by clicking ‘Set Default Additional Text’. Click ‘Create New Invoice’ to create your draft invoice.

Helpful Tip The same referencing system will be used for all your invoices. The other options are client-specific or project specific, and you can set those to each customer or project in those areas. FreeAgent will automatically use the next number in sequence, whichever system you have set. So the first time you create an invoice in FreeAgent, enter the number, which will be 001 if your business is brand new, and then FreeAgent will pick 002 for your next invoice, and so on

DRAFT INVOICE This invoice is in draft stage so you can edit and add details if you need to. If you want to add another charge to the invoice, click ‘Add an Invoice Item’. This brings up the New Invoice Item screen.


NEW INVOICE ITEM Quantity and unit Choose the quantity and the unit using the number box and the dropdown menu. For example, you might be invoicing the cost of 4 hours’ or 5 days’ work. If you don’t want to show a unit, click ‘No Unit’ to leave this box blank. The ‘Discount’ option lets you apply an exact-amount discount to your invoice, e.g. £100 off. To enter a discount, put the quantity as 1, and enter the amount of the discount in the unit price box as a minus number. (You cannot enter this as a percentage.) Details Type in the details of the item so it is clear what you are charging for. Unit price Enter the unit price. This should be the net rate (VAT will be added on top of this figure if it applies). Income category Choose the appropriate income category from the dropdown menu to track this item. It will appear on your Profit and Loss Report. VAT Make sure the selected VAT rate is correct with the drop-down menu.


Price list If you invoice for this item regularly, tick and add a name for the item. FreeAgent will remember the details for you to use again. Once you have created your first price list item you can select it from the list when you need it again. To use an item on your price list select ‘Add from your Price List’ when creating a new invoice item. Select the item you want and amend the details if you need to. Click ‘Create and Finish’ to complete the invoice or ‘Create and Add Another’ to add another item to the invoice.

Send the invoice to your customer You can choose to save the invoice as a PDF for printing, or for sending as an email attachment from your own email programme

To save as a PDF, click ‘Save as PDF’. Once the PDF has been created you can choose to print or save it from the ‘File’ menu.


MARK THE INVOICE AS SENT Once you have proof read the invoice and sent it to your customer, click ‘Mark as Sent’. This will mark the invoice as sent so it is no longer in draft format. It will appear in the accounting section and the overview screen, and will show as sent in the list of invoices. Make sure you either print or email the invoice to your customer.

VIEW AN OUTSTANDING BALANCE You can use the ‘Overview’ menu to see an overview. This will display any outstanding balances down the right-hand side.



To view outstanding Invoices you can click on the tab next to Invoice Timeline and this will give you a breakdown on those invoices outstanding.

RECEIVING PAYMENT FOR AN INVOICE When a customer pays an invoice you must record this. First, go to Banking and click the bank account that the money has been paid into Then click ‘More’ then ‘Add Transaction’ This opens up the New Manual Bank Account Entry window

RECORDING PAYMENT Type Choose Money In- Invoice Receipt Credit value Type in the amount you’ve received – whether it’s full or part payment. Invoice Select the invoice number this client payment applies to. You only need to do this if you have invoiced the same customer more than once.


Attachment You can attach things like a copy of the remittance advice or the cheque or credit card receipt to the transaction if you want to. To do this, ‘Browse’ to it and give it a description if you like. When you have filled everything in, click ‘Create and Finish’ to mark the invoice as ‘Paid’.

3. Paying into a bank (POS) There are times when you need to record other income into the business, when an invoice has not been created. This process could be used to record other sales income, such as cash sales to the cash register, dividends or money received from a grant or award. To do this, go ‘Banking’. Select the name of the account the money is to be deposited in from the left-hand ‘Bank Accounts’ menu. Select ‘More’ and choose ‘Add Transaction’.

NEW MANUAL BANK ACCOUNT ENTRY Type Select ‘Sales’ under ‘Money In’ from the drop-down menu. Dated on Enter the date the money is deposited in the account. Credit value Enter the total amount of the income, including VAT if it’s relevant (gross). Then select the relevant VAT code.


Description Give the income a reference, for example, a description, the paying-in slip reference, receipt number or till report number. Attachment If you need to, you can upload an attachment – like a scan of the cheque, receipt or till report summary. To do this, ‘Browse’ to it and give it a description if you like. When you have finished, click ‘Create and Finish’. You will now see that your cash till balance has increased. When you are ready to bank the values in the cash register, you can add another manual bank transaction to process this transfer

Part 3 Money out We will now look at two ways of recording money we spend – supplier bills and bank payments.

SUPPLIER BILLS Bills are costs that the business pays for itself from its own bank account, but not straight away. For example, a utility bill or a sub-contractor’s invoice.

BANK PAYMENTS Bank payments are costs that the business pays for itself straight away. Normally you would 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 explain it as a bank payment.

1. Supplier bills Creating a new supplier record in FreeAgent is similar to creating a new customer. FreeAgent holds information about the companies and people you buy goods and services from to run your business. For example, subcontractors, utility companies or your office supplies company. You can add a supplier at any point.

ENTER BILLS By recording your bills and invoices as soon as you receive them, FreeAgent can help you manage them, and your cash flow. Successfully managing the relationship with your creditors can have a positive impact on your cash flow, your relationship with suppliers and the financial health of your business. It is just as important to pay attention to the credit that you have with your suppliers, as it is the amount of credit you give your customers. Choose

from the menu and then click ‘Create my first Bill’.


After you have created your first bill the bills list will appear. You can then click to enter a new one, which will bring up the Create a New Bill window.

BILL DETAILS Supplier contact If your supplier is already in the contact list, select the name of the supplier from the drop-down menu. If the supplier is new, click ‘Add a new contact’. If you want to add a new contact in this window, you will need to enter a first name and a last name if the organisation field is blank.


Reference Enter a reference number for this bill. This will usually be the invoice number that your supplier has put on the bill. Bill date Enter the date shown on the bill. Your supplier will usually call this the “Invoice Date”. Due on This is the date the payment is due. If the date given here is wrong, you can overtype it or change it using the calendar next to the ‘Due On’ box. Total value and VAT Enter the total amount of the bill, including VAT. Choose the correct rate of VAT. If you leave the VAT rate as ‘Auto’ FreeAgent will assume the VAT rate for you, based on the category you choose. Category Pick the category that the bill applies to from the drop-down menu. If the bill divides into more than one category, particularly if those categories have different VAT settings, you’ll need to divide the bill up into its components and post it as two or more different bills. Comments Put a comment in the ‘Comments’ box if you like. 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, purchases of capital assets or sundries.

ADDITIONAL OPTIONS Project bill If this bill was incurred while you were working on a particular project, you can link it to that project. You can then choose whether you’re going to charge the client for it, and if so, how much. Recurring options You may have recurring bills, for example rent, where you have a regular standing order or direct debit set up. You can tell FreeAgent here how frequently this bill recurs. It will then put it in for you in the future, without you having to go through the routine of creating a new bill. You can edit a recurring bill if the charge is slightly different each time, for example on telephone bills. Attachment You might want to upload a scanned image of your bill. To do this, ‘Browse’ to it and give it a description if you like. When you’ve finished, click ‘Create and Finish’ to save the bill.

VIEW BILLS To keep track of your bills, click ‘Bills’ from the Overview page and the list of bills will appear. To filter the bills you can see on screen, you can filter the view. In the ‘Show’ drop-down menu select the type of bills you would like to see. For example ‘Open or Overdue


bills’ only.

PAY BILLS When you have paid your supplier you will need to tell FreeAgent that the bill has been paid. From the banking menu click on the bank account that the money has been paid from Click ‘More Transaction’ then ‘Add New This will open the New Manual Bank Account Entry window.

BILL DETAILS Type From Money Out choose Bill Payment Dated on Enter the date you paid the bill here. Credit value FreeAgent will automatically enter the total value of the bill. If the amount of the payment you are making now is different, for example if you are making a part payment, you can change the value in the box.

Bill You can select the bill you have paid here. Make sure you pick the right one. Attachment You might want to upload a scanned image, for example a credit card receipt. To do this, ‘Browse’ to it and give it a description if you like. When you’ve finished, click .

Bank payments These may be expenses from Petty Cash, or those paid for directly by credit or debit card. From the Overview page go to ‘Banking’. Click on the account name you want in the left-hand menu. Click ‘More’ and choose ‘Add Transaction’ to open the New Manual Bank

Account Entry screen.


ENTER PAYMENT DETAILS Type Leave the type as ’Payment’. Dated on Enter the date of the payment here. Total amount Enter the total amount of the payment here, including VAT (gross).

MORE DETAIL Category Choose an expense category for the payment. If you’re registered for VAT, make sure you choose a category in the right area – standard or zero VAT – if you want FreeAgent to automatically calculate the VAT for you. Description Enter a description of what the payment was for. This is in case your accountant needs more details, or your books are inspected by HMRC.

OPTIONAL REFERENCES Project Bill If this payment was incurred while you were working on a particular project, you can link it to that project. You can then choose whether you’re going to charge the client for it, and if so, how much. Receipt number Number your receipt and enter the number in this box so you can find the receipt again later.

ATTACHMENT Upload an attachment You might want to upload a scanned image, for example a copy of the receipt. To do this, ‘Browse’ to it and give it a description if you like. Click ‘Create and Finish’, or if you want to enter another payment, ‘Create and Add Another’

Part 4 Banking 1 Finding transactions You can see a summary of your bank accounts by clicking

on the Overview page.


Click on the bank account name on the lefthand side, for example Business Current Account, to see the details.

Click on the transaction you want to see details for.

2 Bank transfers This allows you to move money between your bank accounts. For example, you can: • transfer to and from your deposit or current accounts • pay off your credit card bill • bank money from the till. To make a transfer, go to ‘Banking’ from the Overview page and click on account name that will be

wanting to debit.


Then click ‘More’ and choose ‘Add Transaction’ to open the New Manual Bank Account Entry screen.

RECORD A BANK TRANSFER Type Select ‘Transfer to another account’ from the drop-down menu under Money Out Dated on Enter the date of the transfer here. Total amount Enter the amount of the transfer here.

Transfer from The account that you are transferring money from will be displayed. Then you select the account that the money is being transferred to. Attachment You might want to upload a scanned image, for example a copy of the credit card bill, cash machine withdrawal receipt or paying-in slip. To do this, ‘Browse’ to it and give it a description if you like. Click ‘Create and Finish’ or, if you want to enter another transfer, ‘Create and Add Another’.

3. Bank reconciliation Bank reconciliation is a way to compare the statements issued by your bank against information you’ve entered in FreeAgent. They are very important because they allow 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 returns. E-reconcile is a feature available in FreeAgent, which uses electronic statement data to help you with bank reconciliation. How to do a bank reconciliation 1. From the Overview page go to ‘Banking’ 2. Select the bank account you will be reconciling from the drop-down menu 3. Click 4. Click ‘Browse’ 5 Select where on your computer your bank statement is stored 6. Click


REVIEW UNEXPLAINED TRANSACTIONS FreeAgent will now match up the transactions on your bank statement against those you have logged in FreeAgent. Any transactions on your bank statement that do not match up with the information you have entered in FreeAgent will show up in red on the next screen. You will then need to explain these transactions. You do this one at a time by clicking on each relevant transaction.

Select Transaction

Delete Transaction

For any unexplained transactions, which have not been automatically matched, you have two options: 1. If you would like to remove the transaction from FreeAgent, select ‘Delete this Transaction’. 2. If you want FreeAgent to add the transaction against your bank account you can select the type of transaction, as well as adding any other details. Once you have run through these steps for each unexplained transaction, your bank reconciliation is complete. Any changes you have made will be posted to your FreeAgent bank transactions. Your transaction list in FreeAgent should now match your bank account statement.

Select transaction type/add details


Part 5 VAT and reporting 1. VAT Settings 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. 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 you have actually received or paid. To qualify for the VAT Cash Accounting scheme you must have an annual turnover below a certain figure. For more information, go to FreeAgent, automatically calculates the VAT for each transaction you post when you select the transaction’s VAT rate. When you come to do your tax return, FreeAgent will include all VAT transactions, depending on their tax rates. By default, all new businesses set up in FreeAgent are listed as not registered for VAT. When you first set up your business in FreeAgent, you will choose your VAT settings. So you must make sure you choose the right setting. To do this, click ‘Settings’ Whilst in any page.

Then click ‘VAT Registration’ to bring up this screen:


UK VAT REGISTRATION Are you VAT registered? Select the most appropriate answer. If your business is already registered, change this setting to ‘Registered’. If you are not sure, check with your accountant or HMRC. VAT registration number Enter your VAT registration number here. This is a compulsory field if you are registered for VAT because your VAT registration number must be printed on your invoices. VAT Registration Effective Date Enter the date your business’ VAT registration started here. First VAT Return Period End Date Enter the date your first VAT return period ended. FreeAgent will then date your next VAT return to finish three months after that date, and so on. Initial VAT accounting basis Enter whether your business is invoice accounting or cash accounting for VAT. Initially on flat rate scheme If your business is using the VAT flat rate scheme, choose which sector it’s in. FreeAgent will work out the correct percentages, including the discount for your first year of registration. If your business is accounting for VAT in the normal way, (i.e. not the flat rate) then choose ‘Not on Flat Rate Scheme’.

Enable EU VAT reporting Select this box if you do business with other EU countries. Once you’ve done that, click ‘Save Changes’. You can revisit this area to make changes later. But if you need to change the basis between invoice and cash, or change whether or not you’re on the flat rate scheme once you’ve entered transactions, you’ll need to do that on the individual VAT returns instead.

2. VAT Returns If you are registered for VAT you will need to run a quarterly or monthly VAT return to calculate how much VAT you owe HMRC, and also how much VAT you can reclaim. In FreeAgent, the VAT is calculated automatically on transactions when the appropriate VAT rate has been applied.

TO PRODUCE A VAT RETURN From the Overview page, go to the ‘Taxes’ menu and select ‘VAT’. This brings up the VAT statement of account.


You can see here how much VAT was due. Previous VAT returns, and how much you paid. Bank payments that you explain as payments of VAT or VAT refunds will show on this screen, so that you can work out whether you owe anything to HMRC or whether they should be paying you. Click ‘VAT return’ to show the details.

This brings up the VAT screen. Click ‘Full Report’ which is a tab next to the VAT Return Preview tab that we are currently in.


FreeAgent will warn you if there is a gap between the last set of data you entered and the end of the quarter. It will also warn you here if you have unexplained bank transactions on a business account. This is because you won’t be able to mark your VAT return as filed, until you have explained all the transactions on all your business bank accounts. The ‘Details’ box shows you how the VAT return is being worked out. To change any of this information, click .

COMPLETING VAT RETURN Once you are confident that you have correctly entered all your transactions into FreeAgent for the VAT return, click ‘Mark as filed’ at the top right of the screen, next to ‘Edit Details’.

IF YOU CAN’T SEE THE ‘MARK AS FILED’ BUTTON This could mean: • you haven’t finished explaining your bank transactions for the VAT quarter • your accountant has restricted your access to your account – you’ll need to speak to them about this.

WHEN THE VAT RETURN IS MARKED AS FILED When you mark a VAT return as filed, you won’t be able to change any transactions or enter any new transactions dated during that period. You must enter and check all transactions before you mark the return as filed.

3. Accounting Reports OVERVIEW Click on Overview to see an overall view of your accounts.


ACCOUNTING REPORTS To view more in-depth reports you can visit the ‘Accounting’ menu from the Accounting tab and then clicking on Report select the report you want to see. You can filter these reports by date – just select the period in the date drop-down box.

PROFIT AND LOSS The Profit and Loss Report tells you what happened between specific dates. It tells you if 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, then the company is not financially secure – you cannot keep reselling that same asset. Yearly profit and loss The yearly statement can show you a full accounting period’s worth of profit and loss, going back as far as your FreeAgent Start Date. Or it can show you your current accounting period’s profit and loss so far. If you need to see the details of what makes up any of the figures on the profit and loss account, you can click on each figure. Monthly profit and loss The monthly statement shows you the profit and loss broken down into months. This is useful if you want to track monthly trends.

BALANCE SHEET A Balance Sheet shows everything that your business owns (its assets) and everything that it owes (its liabilities) at any date you choose. Trial Balance A Trial Balance is a list of all the balances in all your business accounts at any given time. “Accounts” in this case doesn’t just mean bank accounts. It means all the categories that you put bills, expenses and income into. All these categories are accounts and they will all show separately on the Trial Balance. You can filter the Trial Balance by date using the drop-down menu. You can check the figures for the year so far, or look at the full year – which is useful if you want to see costs that will come in at a later date, such as payrolls that have been run for the whole year. If you need to, you can also export the Trial Balance as a CSV file. This might be useful if you need to create your own reports from the information you’ve put into FreeAgent. You can choose from the following Trial Balance exports: • Summary CSV gives you just a list of the balances in each account.


• Transactions CSV gives you a breakdown of these balances. • Nominal Codes CSV lists the codes only, but doesn’t say what the amount in each code is.


Getting Started Checklist Company name and address

VAT registration number and information

FreeAgent 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 FreeAgent. 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.


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.


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 (eg 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 (eg 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 eg 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.


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 eg 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 (ie 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 (eg 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.


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 (ie 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 (eg 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 (eg 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 ie 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 (eg 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. 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.


Appendix Your MindLeaders training and development plan Course Name

Key Skills

Date for Completion