Category Archives: Accounts and Accountancy

UK economic recovery loses some momentum in Q3 as higher prices and shortages slow growth

High global growth as countries bounce back from the economic effects of the pandemic weakened in Q3, but confidence and orders remain at high levels in the UK, according to the latest Global Economic Survey from ACCA (the Association of Chartered Certified Accountants) and IMA (Institute of Management Accountants).

Confidence fell back 23 points in the UK during Q3, but remains at a relatively high level, having dipped from a record score last quarter.

Global confidence fell by nine points in Q3, with falls in Western Europe (-24) and North America (-41) pulling down the score. However, both regions are also at relatively high levels of confidence, as is the case globally. In fact, confidence jumped in Asia Pacific (+11) and South Asia (+20), after falls in the previous survey.

The Middle East was the only region to record improved confidence for the six months of Q2 and Q3.

As regards to orders, which is a useful benchmark to measure real economic activity – the score fell slightly by two points in the UK. However, orders are still well above the pre-pandemic levels.

Globally, there was a split between advanced regions and emerging markets. There were falls in orders affecting North America and Western Europe contrasted with modest improvements in emerging markets.

However, the wider economic prospects in developed economies remain brighter than in emerging markets, where low vaccination rates continue to drag on economic recovery. And, apart from Africa, all major regions are now reporting order levels above their pre-pandemic level, indicating a continued global recovery.

The UK also saw positive news in terms of employment and investment, which both increased, especially employment, which rose by 16 points this quarter.

Another positive indication from the global survey are the two ‘fear indices’, which measure concern that customers and suppliers may go out of business. Both declined again in Q3 and are now back in line with their long-run average levels after spiking around Q2 2020.

Concern about operating costs is now at its highest level since the start of 2019 and increased five points in Q3. This is driven by higher transport and commodities costs, leading to higher inflation and weaker growth now.

Lloyd Powell, Head of ACCA Wales, said: “The UK labour market has proved resilient during the pandemic, helped by the furlough scheme which has now finished. The UK economy is growing more slowly in the latter period of 2021 after exceptionally strong growth in Q2. But it is likely that the level of output will regain its pre-pandemic level by the end of this year.

“A moderation in growth was to be expected, as the pace set earlier this year could not be maintained indefinitely.

“Although confidence and orders have lost momentum in regions including North America and Western Europe, we are still seeing an encouraging picture of global economic recovery overall.

“Concerns about extra operating costs for businesses should prove temporary as the price mechanism operates to encourage increased supply and reduced demand. But for now, the effects are to moderate global growth from a rapid to a steady pace.”

“Although economic growth has slowed in many regions and the prevalence of the Delta variant of COVID-19 particularly in developed countries expectedly drove down global confidence, underlying demand remains strong,” said Loreal Jiles, vice president of research and thought leadership at IMA.

“As COVID-19 vaccinations continue to increase and we remedy supply shortages and increased prices in advanced economies, there is an opportunity for overall confidence to increase significantly.”

The full GECS report can be found here:

https://www.accaglobal.com/gb/en/professional-insights/global-economics/gecs_q3_2021.html

Global accountancy bodies come together for net zero

Thirteen professional accountancy bodies from around the world – including AAT, ACCA, ICAEW, ICAS, and the Association of International Certified Professional Accountants – have joined forces to fight climate change by committing to reach net zero greenhouse gas emissions.

The accountancy bodies are part of The Prince of Wales’s Accounting for Sustainability Project (A4S) Accounting Bodies Network. This network represents more than 2.5 million professional accountants and students, who work with businesses and governments in 179 countries.[1]

The bodies have committed to reach net zero emissions as soon as possible and will publish plans to do so within the next 12 months and report annually to show progress.[2]

Accountants are well placed within their organisations and with their clients to drive action on the climate crisis. The bodies have therefore also committed to provide their members with training, support, and resources to help them create their own net zero plans and reduce their emissions.

In addition, the bodies have pledged to provide advice to help governments create the policies and infrastructure necessary for transitions to net zero economies. The profession is already at the forefront of helping societies adapt by using accounting practices to help governments adjust economic policy in ways that minimise climate change.

 

Heather Hill, AAT President, said: “Following the 2020 call to action by the professional accounting bodies, AAT is pleased to support this statement of commitment to net zero. Climate change is an existential crisis and every one of us, as individuals and organisations, has a part to play in driving the effort to achieve net zero. At AAT we will continue our organisational activity to improve our carbon footprint, but to also help equip our members to engage in this crucial collective effort, and to bring our influence to bear on the government where appropriate.”

 

Lloyd Powell, Head of ACCA Wales, said: “Making these commitments is important to create positive business change – and professional accountants are core to this. They are in a unique position to drive good business decisions with positive impacts on sustainability, including on climate action, in the organisations they lead and work for. ACCA is proud to support these commitments and play our part.”

 

Michael Izza, ICAEW Chief Executive, said: “The fight against climate change requires urgent global action, so we were pleased to join our fellow bodies from around the world to confirm our commitment to a zero-carbon society.

“We were the first major professional body to become carbon neutral and have brought in measures to help us reach net zero, such as setting up carbon-reducing projects. We will continue to look for ways to minimise our carbon footprint, guide our members on their own net zero journeys and support global action.”

 

J Bruce Cartwright CA, ICAS Chief Executive, said: “ICAS is proud to be a signatory to the Accounting Bodies Network commitment to net zero greenhouse gas emissions and to commit to provide training, support and resources to help our members establish their own net zero pathways based on our experience. The accountancy profession can be a key enabler in the transition to a net zero economy. I believe that if we pool our collective efforts and resources we can achieve our climate change ambitions and make the creation of a healthy and sustainable planet a reality for future generations.”

 

Barry Melancon, CPA, CGMA, CEO at the Association of International Certified Professional Accountants, representing AICPA & CIMA, said: “Over the past decade, we have been witnessing the direct and indirect impact of environmental-related risks on our communities. It is now abundantly clear that to address these risks and achieve climate-goal ambitions, we must work together and lead the accounting profession by example. Public and management accountants have an important role to play improving an organisation’s integrated thinking and decision-making capabilities to promote responsible and sustainable business practices. They have the necessary skills and expertise to help effect meaningful change in this area. As an organisation, we are fully committed to doing our part and will continue to help our members, their organisations and their clients across the globe support with this mission”.

 

UK Businesses Waste £25million+ Annually Trying To Do Their Own Accounts

Written by Ask yourself why you went into business for yourself. We’ll bet you don’t respond with ‘to spend my days working on financial accounts’!

Managing your accounts yourself is an understandable approach, particularly amongst start-ups and small businesses. After all, it’s these early days where you need to be as frugal as possible to turn a profit and begin to grow your enterprise.

However, it turns out that by taking on this administration yourself, you’re actually costing your business money rather than saving it.

 

What if we told you that managing your business accounts is losing you at least £15,000 a year?

Gravitate Accounting surveyed over 500 business owners in the UK, and 27% stated that they tackle payroll, VAT returns, invoices and other finance-related admin tasks themselves.

This takes up, on average, over 80 days per year, according to the study, time that you could spent growing your business. So we worked out magic and calculated that based on this data, every year, UK businesses waste more than £25million.

Additionally, 54% of businesses surveyed reported that, they don’t have bank feeds tied into their accounting software, and nearly 20% don’t use any accounting software at all. This disconnect means they’re spending even more time away from their businesses than they have to and, more importantly, losing even more money.

Only 42% of small-to-medium companies are still operational after five years; therefore, finding ways to save as much as possible is essential for the safety and health of your business.

More than that, you may not be aware of the multiple ways you could save money and be efficient with your company finances.

 

What £15,000 annual savings could mean for your business

£15,000 is a considerable loss, one that could be put to much better use. For example, you could use your savings to:

  • Take on an apprentice – the minimum age for an apprentice aged 16-18 means their gross salary would be £6,708 each year for a 30 hour-per-week contract.
  • Build your own warehouse space – each square foot will cost you between £64 and £84 to build your own space rather than rent it. That means that you can snap up 178 square feet of space on the lowest end of the scale to store your products.
  • Set up a great financial system. Just over 15% of UK firms polled haven’t done this, which means they are spending far more time and money than required monitoring business budgeting, pursuing bad debts, and other time consuming tasks.
  • Launch an entirely new product line – most enterprises raise £5,000 to launch their business. So, you could easily launch three entirely new product lines with your savings.​

ACCA: Optimism as small businesses in Wales start to get back to normal but financial support lagging behind

Small business owners in Wales are feeling upbeat about the prospect of trading getting back to normal but are still struggling with their mental health and finding financial support, according to a survey from ACCA UK (the Association of Chartered Certified Accountants) and The Corporate Finance Network (CFN).

All owners reported that business trading is at the level they expected or slightly higher this month, a jump of 11% over last month.

And there was also unanimity from 100% of respondents that their businesses will return to pre- Covid levels of productivity and turnover within two years, with more than half (57%) believing they will achieve that goal within 12 months.

The SME Tracker, which reports what small businesses tell their accountants, reported data from accountants representing 10,900 SME clients in Wales and ran until yesterday.

However, despite the optimism, about their own prospects, business owners continued to report on the struggle to find suitable financial backing from traditional outlets now that government-backed loans are winding down.

More than half (57%) said they found it more difficult to obtain even an overdraft and the same percentage struggled to obtain an unsecured business loan. Others also had problems qualifying for a commercial mortgage (43%), which was a 10% increase from last month.

Anecdotally, some members even told the survey that even the most straightforward tasks, including opening bank accounts, have been made more difficult.

This frustration with the real-world practicalities of delivering on the opportunities now re-emerging may have contributed to another worrying set of responses concerning business owners’ wellbeing.

More than one in five (22%) said they were more stressed and anxious and 19% reported that they were either not sleeping, feeling unable to cope or that their mental health had deteriorated.

Lloyd Powell, Head of ACCA Wales, said: “Our survey shows business owners are still struggling to secure the right financial support.

“They are telling us that conventional and traditional sources of business finance, such as banks, are lagging behind and are making it difficult for them to complete even the most basic functions like opening bank accounts and securing an overdraft.

“We would like to see government working with finance providers to improve access to the right finance options to help to support recovery and we will be engaging with both parties on this matter.”

Kirsty McGregor, founder of the Corporate Finance Network, said: “Small business owners can see the opportunity on the horizon and are seeing the early signs that trading can return to normal. However, they are also feeling uncertain about navigating the current financial landscape, which is causing them stress.

“They are generally optimistic about the future, but they perceive a high degree of risk and uncertainty stands between them and achieving their targets.”

More than 3 million SMEs in the UK still not using accounting software study finds

Despite unprecedented growth in eCommerce during the pandemic, millions of small businesses are still stuck in the past when it comes to accounting. That’s one of the findings of the latest research report from Codat, the API providing connectivity to financial software used by small businesses globally.

Codat’s research shows that since the pandemic’s start, there has been an explosion of new business registrations and a cultural shift towards enhanced digitisation, forever impacting the accounting software market. Specifically, since July 2020, the UK experienced the largest increase seen in eCommerce with their small-to-medium enterprises (SMEs) growing by 100,000 to 6 million in total.

What’s most surprising is that not all of these businesses use accounting software. The report estimates that “50% of businesses in the UK have adopted accounting software and the remainder use a combination of Excel spreadsheets and manual records.” That means that more than 3 million SMEs in the UK aren’t using accounting software.

With a plethora of accounting software options available, the question remains, why are SMEs not taking advantage of these solutions? One study from Capterra that interviewed over 400 self-employed individuals and SMEs from various industries and sectors found that freelancers and companies with fewer than five employees view spreadsheets and manual methods as sufficient.

While it may not be an issue right now, it will become one down the line as the company grows and more data needs to be recorded efficiently. Tasks such as uploading and downloading data and checking the accuracy of the work become increasingly cumbersome and consume valuable time. The Capterra study found that, in general, the top three challenges that SMEs are currently facing when it comes to accounting are: lack of time (45%), difficulty keeping up with new regulations (20%), and lack of knowledge (19%).

Both studies observe that a cloud-based accounting solution mitigates these challenges by managing the entire accounting process from start to finish.

Cloud-based software is vastly different from traditional accounting software, which is installed on a single computer. With a cloud-based accounting solution, documents are stored online, meaning they can be accessed anywhere at any time using any device with internet access. This allows for an unlimited number of users to collaborate simultaneously, with the data being securely stored and encrypted and the software itself always up to date.

SMEs can also connect their cloud-based software to online payment platforms, allowing them to get paid on time (e.g. setting up automatic payment collection from recurrent customers).

While bookkeeping can be tedious, cloud-based accounting solutions can save SMEs time by managing their bank transactions (e.g. importing bank transactions every business day, eliminating the need to manually enter this information). Data can even be extracted automatically from bills and receipts with certain apps.

Cloud accounting improves business efficiency with time-saving features such as employee management, reporting, expense management, financial monitoring and so much more. This type of software helps save SMEs both time and money, both of which are priceless commodities in today’s world.

Sayer Vincent is recruiting Charity Auditors as part of their 2021/22 growth strategy

Sayer Vincent, the award-winning firm of charity auditors and advisers, is looking to recruit experienced charity auditors as the firm takes on more clients following the COVID-19 pandemic.

Qualified auditors will work as part of the audit team doing statutory audits along with other client assignments, such as due diligence, VAT, internal audits, and training activities. They will also provide coaching to less experienced colleagues.

Sayer Vincent works exclusively with charities and social purpose organisations and is looking for people with external audit experience but who may not necessarily have worked with charities or social purpose organisations before. However, they need to share a passion for the charity sector and want to make a difference in their audit career.

Jonathan Orchard, Partner at Sayer Vincent said, “This year we’re busier than ever and we’re looking to expand our audit team to work with both our existing clients and new ones. There is an increasing demand for our services, and we are taking on more clients throughout the UK.

“The past 18 months have been an extremely challenging time for charities. Many have seen their income reduce, at the same time when demand for their services has increased. We are dedicated to helping them become more effective in how they manage their finances, so they can achieve the best outcomes for their beneficiaries.

“We offer a friendly and supportive working environment, and the chance to become part of a brilliant team committed to doing the best work for clients. As an organisation we place value on employees as individuals, and learning, development and fairness are part of our organisational values. We encourage auditors looking for their next career move to apply.”

Joanna Pittman is a Partner at Sayer Vincent. Commenting on what she enjoys about the charity sector, Joanna says, “Almost 20 years into my career, I still love my work and I am proud to be a Sayer Vincent partner. I love working with charities and offering them the financial expertise they may not have in-house. This might be audit, accounting, tax, risk management or governance Sayer Vincent enables me to work with many organisations who are very different, but who all share values focused on people, rather than profits.”

Irene Mortimer is a manager who joined Sayer Vincent in 2017, having previously worked for PwC and the Audit Commission. She says, “Charities need our help, and they look to us for guidance and support. I’m engaged with clients year-round, not just when their audit is due. This means I know what is happening in the charity and I build up a great rapport with them

“The best part of the job for me is the people, both the staff at Sayer Vincent and the clients. I work with. I enjoy the variety of my diverse portfolio and listening to the challenges each charity is facing. It’s really rewarding to support charities and learn about the positive impact they are making.”

Jon Connell is a manager at Sayer Vincent. Commenting on what attracted him to the firm he says, “After seeing the advert for trainee accountants at Sayer Vincent I was immediately drawn to the values of the firm and their expertise and passion for the charity sector. I love how we go beyond just ticking boxes with our audits and really engage with our clients to help them – and by extension the wider sector – develop and improve.”

For more information about Sayer Vincent visit: www.sayervincent.co.uk

Pandemic pushes one in ten young people to change their career choice, says ACCA

A new poll commissioned by ACCA (the Association of Chartered Certified Accountants) suggests the Covid-19 pandemic has proved to be a time of career contemplation and change for young people.

There are around six million 16 – 24 year olds in the UK, and ACCA polled over 1,000 to better understand their views about jobs. While before the pandemic 21% wanted to pursue a professional career like accountancy, that figure has now increased to 30%.

Being on furlough has offered a lot of people already in work the chance to reassess and aim to take new qualifications to target a new job.

40% of those surveyed said financial security is most important to them in their job and that traditional career paths with qualifications helped increase the chances of that job and financial security. There was a fifty-fifty split on the numbers of people aiming to go to university and those who said it wasn’t for them. The numbers of people wanting to go into apprenticeships – or aiming to work and study at the same time – now matches the number of people wanting a place at university.

Lloyd Powell, Head of ACCA Cymru Wales, said: “The Covid-19 crisis has made many rethink career aspirations and their futures. This research, alongside a global survey we did earlier this year into Gen Z and their careers, shows how the pandemic has transformed aspirations about the world of work, while also shaking up how employers run businesses and organisations. The role of accountants is wider and more important than ever before, offering a secure and flexible career whatever your age.

“For Gen Z, developing strategic accountancy skills offers a great launchpad into a career, with benefits our research shows that they crave – such as the opportunity to learn valuable skills and progress rapidly; to be paid well and enjoy greater security of employment; to enjoy a good work-life balance; with varied and meaningful work for organisations with purpose and values, and also the opportunity to make a contribution towards a better, fairer, more sustainable future for all.”

ACCA has three case studies of people who have been inspired to recently pursue a career as finance professional, making the change during and before the pandemic:

  • 24-year-old Cristina Oprea from Greenwich in SE London was a chef in a nursery before being furloughed in Spring 2020. With some time to plan her future afresh, Cristina opted to study an accounting degree with the ACCA. Cristina now works as an Accounts Assistant for a care company while continuing her studies. She has now purchased her first property before the age of 25.
  • 37-year-old Gaurav Kumar from Ashton-under-Lyne in Greater Manchester worked in the hotel industry looking after serviced apartments that were forced to close by the pandemic. While furloughed, he enrolled with the ACCA. He’d always loved working with numbers and has now started a new job at Barclays while he continues his studies.
  • 37-year-old Craig Maclean from Cambuslang, on the edge of Glasgow, was a baker with Greggs for nearly 20 years. Wanting a career change, he’s now switched to studying at the University of the West of Scotland for an ACCA accredited degree. He’s also working at the university as a Finance Administrator.

Lloyd Powell concludes: “The pandemic has initiated a change in career outlook, and we also see this being played out on our global jobs board, ACCA Careers, which has recently seen a 43% year on year global uptick on usage. This shows a level of demand not seen before, and which we believe will continue.”

Kilsby Williams eyes further expansion on the back of client wins

Leading independent accountancy firm, Kilsby Williams, is celebrating its 30th year with significant client gains and exciting recruitment plans.

Kilsby Williams, which was launched in 1991, has seen record growth in the past six months with many lucrative client wins including both Newport and Cardiff Bus, Fordthorne, Pensord Press, Poundstretcher and London-based Cutler and Gross. Added to existing gains this has seen the firm’s annual growth rate rise to a record 20%.

This success can be attributed to Kilsby Williams’ expert knowledge, technical ability and years of experience advising businesses, all of which mean that the company can attract national organisations that would traditionally work with the Big Four accountancy firms, putting it in a unique position for a business of its size.

Simon Tee, Managing Partner at Kilsby Williams, said: “We have been really pleased with the way business has gone since the start of 2021 and see our success as a fitting way of celebrating our 30th anniversary.

“We are proud of our ability to compete with the Big Four accountancy firms and other larger organisations. We believe that we offer clients and staff many of the benefits of these bigger companies but within a unique, family team culture.”

Accountancy and taxation specialist Kilsby Williams provides solutions for businesses through a variety of services such as company audits, accountancy advice and technical tax solutions designed to avoid tax leakage.

Currently a team of 55, Kilsby Williams is looking for staff across all levels of the business from trainees to partners and believes that there are plenty of opportunities available for people who are looking for a chance to push on in their career.

Simon said: “Due to the size of our firm we are able to get to know our staff well and see what they are capable of. We offer clear progression plans and development opportunities and believe that this is a great place for people to thrive and become clever accountants.”

Established in 1991, Kilsby Williams works with clients from across South Wales, the Midlands and London, ranging from sole traders to companies in international quoted groups.

Finance firm doubles workforce and secures major investment for revolutionary recycling plant

FFP SOLUTIONS has more than doubled its workforce and secured £35m for clients during the Coronavirus pandemic.

In just 12 months the North Wales firm unlocked millions of pounds for SMEs nationwide via the Coronavirus Business Interruption Loan Scheme (CBILS).

And now the St Asaph-based finance brokerage is aiming to support more people through the UK Government’s new Recovery Loan Scheme (RLS), the replacement for CBILS.

Having grown from four to 11 staff in the last year, FFP Solutions is even better placed to help those affected by the pandemic to access relevant funding.

Director Richard Lloyd-Jones said: “To have secured more than £35m through CBILS is a fantastic result for us, and there is still more to come.

“A lot of people missed out on CBILS because they had not been trading long enough or didn’t meet the lending criteria, and many still don’t know what they are entitled to. It was uncharted territory.

“We encourage them to get in touch because they may be eligible for the RLS and should capitalise on any support available.”

He added: “Throughout Covid it hasn’t just been a case of getting money into businesses to help them survive, for us it’s always been about long-term planning.

“As a result, so many of the companies we work with have pivoted and shown great innovation so they can move forward with confidence and be even more resilient in the future.”

Among the companies to have benefited from joining forces with FFP Solutions was Waring Waste Ltd.

The Nottinghamshire waste recycler is set to unveil a £3m facility transforming household and garden waste into ethanol for the aviation industry after completing a £1.5m refinancing package with Directors Richard Pape and Gareth Jones.

“We are delighted to be able to help organisations looking to diversify and create solutions to global issues,” said Gareth.

Richard added: “The way we as a business have been flexible and dynamic has enabled us to grow, but also to add significant value to the companies we work with, and Waring Waste is an example of that.”

Waring Waste owner John Brooke thanked FFP Solutions for helping to make his vision a reality.

“I have already invested more than £1m into our Wildmerpool site and this extra finance will enable us to implement the changes needed – including new technology, equipment and infrastructure – and open the facility this autumn,” said John.

“We will be able to produce up to 10 million litres of sustainable ethanol a year from around four tonnes of waste a day, so it’s a massive operation.

“Our workforce will double to almost 40 staff and the output will have a positive impact on our environment and the local economy, so we are so glad to have worked with FFP Solutions on bringing this huge project to fruition.”

Visit the website www.ffp-solutions.co.uk or email admin@ffp-solutions.co.uk for more information.

Alternatively, call 0800 783 3117 or follow them on social media at @FFPSolutions.

NOTES: The Recovery Loan Scheme (RLS) is to help businesses of any size access loans and other kinds of finance so they can recover after the pandemic and transition period. Up to £10m is available per business, and the UK Government guarantees 80% of the finance to the lender. No personal guarantees are required to be signed by the business owners up to £250,000. The scheme is open until December 31.

Azets’ Regional CEO eyes quadruple growth

Paul Clifford is celebrating 12 months in post

Azets, the UK’s largest regional accountancy and business advisor to SMEs, with 14 offices across the Midlands, Shropshire, and the Welsh Borders, is targeting quadruple growth in the region within the next five years as part of ambitious plans set out by Regional CEO Paul Clifford.

Paul is celebrating 12 months in the role having been handed overall responsibility for Azets’ Central region at the height of the COVID-19 pandemic. During that time, Azets has continued to invest in people, technology, and infrastructure, and has significantly expanded its regional presence and expertise under Paul’s leadership.

This year, Azets has celebrated a record level of activity in its tax and corporate finance teams, employed 40 graduates and school leavers, and announced 100 new roles in the Midlands, available over the next 12 months, as Azets aims to increase national revenue by 50% by 2026.

Earlier in July, Azets, which rebranded and launched in September 2020, was named Accountancy Firm of the Year 2021 at the prestigious City of Birmingham Business Awards (COBBA) for its accelerated growth and regional impact.

Paul Clifford, Regional CEO with Azets, said: “I’m immensely proud to have led Azets’ in the region for one year, during which time we’ve overcome significant challenges caused by the COVID-19 pandemic, brought a new top 10 accountancy firm to the market, and rebalanced our regional presence to position the business for continued growth. Our strategy now is to quadruple in size within the next five years, both organically and acquisitively.

“I was honoured to be given the role of Regional CEO last year whilst working from home, and I’d like to thank both the Azets’ senior leadership team and my teams across the region for all their support. We’ve welcomed some talented new people into the business, including several graduates and school leavers, and created a fully digitised, mobile-enabled hybrid working environment, enabling staff more choice and the flexibility and encouragement to work from anywhere.

“We’re in the middle of a national recruitment drive, with 100 new roles available in our Central region in the next 12 months, and we’re also proactively looking to expand our regional footprint in to areas where Azets is not currently represented. It is an exciting time for Azets, and I am looking forward to leading the team through the next phases of our regional growth strategy.”