Crunchers Accountants

Crunchers Accountants

Sell, Sell, Sell

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Sell, Sell, Sell

One of the privileges of being an accountant is to see into many different people’s businesses.  After a while you start to see the patterns.

Something that becomes clear quite quickly is that whilst most people are getting by not many are really making a profit.  And when you start to look why you can’t help noticing the weakness of most business’s sales and marketing.

Maybe selling has a bad name.  Maybe we are afraid to make promises to customers.  Maybe we just prefer to stay in the comfort zone of delivering our product or service.

Whatever the reason and honourable exceptions aside the marketing systems are puny and the effort we put in is paltry.

Another place this shows up is in the price people charge.  Selling is much easier if you are giving something away for nothing and this is exactly what happens in a lot of businesses.  Often the price charged simply doesn’t cover the costs, especially if you include the value of business owner’s time.

So in this newsletter we want to celebrate marketing and selling and remind ourselves what a fundamental aspect of business this is.

Of course sales and marketing is culturally very associated with swindling and conning people.  But in fact we assert that good sales and marketing is the only place in your business where you can create value for your customer.  Here’s why:

The sales and marketing process is the means by which you uncover what is important to a customer and show them that what you are offering is going to make a difference over and above the alternatives.

When people get that, they get that what you are offering has value.

Delivering our product or service may seem like the place where we create value because that is where people get to experience the value but unless the value has been created first there is no experience of it later.  You can see this when products or services are given away, recipients often do not get what is on offer.

In fact we assert that our fundamental fear that our service or product may not have value is often what stops us from selling.  Conversely people who themselves get the importance, possibility and value of what they have to offer also have no problem in sales and marketing.

If you want to sell with integrity you need to be clear to whom and in what circumstances your offering has value and also to walk away if in particular instances you find it does not.

So let’s go out and sell, for ourselves to make money and for the value we will create for our customers.

Motivating Staff

As business owners one of our jobs is to get the best our staff.  From time to time we get asked about performance related pay and bonuses and our response is always the same – beware!

Somewhere it has entered business culture that offering financial rewards or perks is an effective way to motivate staff.  Unfortunately study after study by psychologists disprove the theory.

There are numerous studies we could quote from but the one we have chosen is a study on the effects of rewards on children done by Mark R Lepper and David Greene from Stanford University and the University of Michigan.

A cohort of children were selected for their interest in and fondness of drawing.  The test consisted of inviting them into a room by themselves and asking them to draw for 6 minutes.  A randomly selected group were also told they would get a reward if they performed this task.

Then over the next few days the children were watched to see how much they continued to draw of their own accord.

The study revealed that those who had been rewarded almost spent half as much time drawing and the drawings produced were found have less artistic merit.

The implication is for these children the reward damaged their desire to draw.   The theory is that the reward interrupts the natural flow of enthusiasm for a task and introduces the idea that the task is something we are suffering for.  After all if we weren’t suffering why would we need to be rewarded for it?

If we follow the logic of these studies, clearly we will ditch rewards as motivational tool but it begs the question – how then can we motivate staff?

Here are Crunchers recommendations for an alternative:
  • Only employ people with a natural motivation to do the job you have in mind.  People need money to live, but some people do also love doing their jobs.  People who do their jobs well generally have an intrinsic love of the job well done.  We need to stop thinking we can provide that motivation to do the job well if they don’t have it innately.   Recruit in such a way that you find the people who just love the work, doing it well and your company.
  • Cultivate a culture of appreciation for the job well done.  We need to acknowledge and thank people publicly for the job well done and weed out those who fall below accepted norms otherwise those who perform well will feel like no-one cares about their good work.
  • As far as possible get pay to disappear as a motivation for doing the job.  This is a tricky one because people need a job for money.  They also don’t want their pay to communicate to them that they are not appreciated.  This will happen if you pay markedly less than the norm and is also a danger to anyone paying the minimum wage.  However we say that if people are doing the work for the money they probably won’t be doing a great job.  We recommend to have a transparent pay policy that everyone understands and takes away any question of why one person is getting paid more than another.  Our recommendation is to pay people at or a little above the market rate.  You don’t want good people leaving because they can get paid better elsewhere but you equally don’t want people staying because they can’t…that just leads to people staying for the wrong reason.
  • Find out as much as you can about what naturally motivates someone apart from enjoying the work and doing it well.  Then as far as possible see how you can facilitate them achieving what motivates them.  Perhaps someone loves organising social events – put them in charge of the Christmas party.  Perhaps someone really wants to progress in their career, provide them with that pathway even it means them eventually leaving you.  This is why regular reviews with staff are important so you can keep in touch with what is motivating your staff.
Finally having warned of the dangers of rewards, there is one type of reward that the above study found to be at least benign and perhaps even beneficial.  As well as telling some children about a reward for doing their 6 minutes of drawing some children were given a surprise reward for their efforts.  Those children went on to draw just as much as those who had not been given any reward and in fact drew slightly more, although not a statistically significant amount.

So if you are going to reward someone for their good work, do it without telling them, as a thank you, but make sure it doesn’t turn into something that is expected.

Daily Bookkeeping

Here at Crunchers we’ve been toying with the idea of providing a daily bookkeeping service and we are now proud to announce that after trialling it with some clients, we are rolling it out across the practice.

The traditional model of a remote bookkeeping service is that you send over information once a month and get the books brought up to date month by month.

Increasingly we have felt that is a redundant model.  Xero updates tbe bank feed daily, many clients send purchase records through to Receipt Bank daily so why couldn’t we do the bookkeeping daily?

In a world where we are getting used to our needs and wants being met almost instantaneously it starts to feel out of place to wait a month for anything.

Interestingly our trial indicates that our job is easier if we don’t allow a month’s worth of transactions to build up the bookkeeper’s job is easier.  It becomes simpler to what is matching with what if there are fewer transactions to deal with at a time.

For anyone interested in the service – just register your interest on our Contact Page.

The Rise of the Digital Accountant

In October we attended Xerocon London which is Xero’s annual conference in London.

By rights this should be one of the dullest experiences known to man – a conference on a piece of software that does bookkeeping.  It hardly sets the pulse racing.  But it turns out that Xero and it’s ilk are right in the crucible creating the future of technology and work.

In particular Xero is at the cutting edge of machine learning and what that will mean for white collar workers.

Xero is already a semi-automated bookkeeping system because can teach it how you want transactions recorded but the next step will be to get the system to teach itself.  If DeepMind’s Artificial Intelligence took only three days to master the game of Go and beat the world masters how long would it take to master bookkeeping?

Xero is already testing automated bookkeeping, the Ok button on the reconciliation page may eventually disappear.

So much for the bookkeeper, but what about the accountant?  Here too the landscape is changing.  Whilst HMRC’s Making Tax Digital delayed, no-one who really questions whether it will become a reality.  When it does the bookkeeping software will be connected directly to HMRC and potentially the information for the tax return could be taken directly from there without human intervention.

There is a lot of speculation about how far machine learning and integration can take us.  Could accountants become redundant for submitting tax returns and accounts?  Will business owners rely on a version of Amazon Echo or Google Home to get questions answered?  Might machines even give business advice?

There is also a lot of speculation on how long it will take.   Our feeling is that people underestimate the amount of engineering there is to get the whole thing to work.

Perhaps as accountants we should be nervous we are talking about a technology that could wipe out our business.  For some reason we don’t think it will quite work like that.  But if it does so be it.  As our accountants we have a choice to resist this change and cling onto ways of working that are increasingly inefficient or to embrace the change and find ways to add value to our customers.  At Crunchers we are committed to the latter.

Dragon’s Den Success!

Congratulations to our client Adelle Smith and BKD London Ltd whose success on Dragons Den was made public last Sunday on BBC2.

Multi-award winning children’s baking company, BKD  has secured investment from British entrepreneur and businessman Peter Jones CBE assisted by Crunchers in preparing for the bid.

Adelle Smith launched BKD from her kitchen in Shoreditch, London, in May 2015, after reigniting her passion for baking when making her son’s first birthday cake. The business has grown rapidly since then, with revenues of £151,000 in 2017 and over 30,000 units being sold.

The brand’s products are now stocked in retailers including John Lewis, Moonpig, Gousto and Arnotts throughout the UK and Ireland.

Adelle pitched to the five dragons, including new investors Jenny Campbell and Tej Lalvani, asking for £80,000 in return for 20% equity in the business. Dragons Peter Jones CBE and Jenny Campbell were both interested and offered the full amount in return for 35% and 30% equity stakes, respectively.  Adelle opted for Jones’ higher 35% offer due to the investments he has made in serveral food businesses, including Levi Roots and for his connections with key UK retailers including Sainsbury’s.

Adelle has been very generous in her acknowledgement of our role saying:

‘Thanks again for all your help, literally couldnt have done it without you.’

Of the investment Adelle Smith says, ‘I’m absolutely ecstatic to have Peter on board and the investment will allow us to massively escalate our growth. We plan to continue expanding within the UK and Ireland, via direct customer sales, retailers and supermarkets, as well as looking into European export opportunities. BKD has had a lot of interest from countries all over the world. We also intend to spend the investment on digital marketing, PR, website and technology improvements and extra machinery.’

Peter Jones CBE, says, “I’m absolutely delighted with my investment in Adelle and her company BKD.  I’m sure that both she and the business will benefit from the explosion in interest in the baking category over the last few years. I’ve already tried out the kits with my own family and we had great fun sharing the experience so I’m confident about the company’s future.”



Intoducing Vivienne Johnson

I am originally from New Zealand, a country which I adore and am lucky enough to travel back to regularly to see family and friends. Having been educated there and spent my formative years in New Zealand, I moved to the UK with my now husband in 2006 to work and travel.  Fast forward 11 years and we have now acquired a house, some goldfish and two beautiful young children, William and Lucy.
From a career perspective, following university I have worked in a variety of roles within client services in the Financial sector in New Zealand and in the UK. Once my youngest child Lucy came on the scene I took a career break and got involved in the world of nurseries, school playgrounds, PTA’s and the occasional school cake sale.
I love to travel and have been lucky to venture to many parts of the world. I also love food and cooking, especially sharing it with family and friends. 
So after a few years off work I have decided to plunge back into the world of work.  While working for large corporations I often felt that they were rather impersonal and you were but a number in a massive business. The ability to make change was rather restrictive and the variety of work very limited.   What really attracted me to accountancy and the Crunchers ethos is the ability to support small businesses and help them grow in their ventures.  I believe that small businesses are the backbone of the community and I hope that I can support and nurture your business in order for it to thrive.
I am looking forward to working with you.

Canvases – creating a Business Model that works

If your business is struggling, you might say you have not found a business model that works.  And even if a business is working, it is well worth understanding one’s business model because it can help to focus resources.

Wikipedia defines them thus: A business model describes the rationale of how an organisation creates, delivers and captures value.

In practice a business model ties together a conceptual framework (who your customers are, what they are looking for, what you will provide them with, how you’ll provide it) with some financials (cost structure and revenue streams).  In essence it is a planning tools and as with much planning the value comes from the clarity of action that emerges in the process. There are many different ways to approach defining your business model but the tool we like most of all here at Crunchers is something called a Canvas.

A canvas is a way to put the business model on a one page document and it has the advantage of making something that could be very complex relatively simple.  Obviously it will not have the rigour of a full business plan but it is a way to rough something out quickly, like sketching the house you are building vs doing architect’s drawings.

What is great is that it allows you to clarify some basics quickly that can massively help in focusing action.

There are different types of canvases that we can use each with slighly different sections to complete but our favourite is the Lean Canvas, developed by a business coach Ash Maurya.  As you can see above the canvas consists of the following sections to complete:
  • Customer Segements
  • Problem (the customer has)
  • Solution (the business is providing)
  • Unique Value Proposition
  • Unfair Advantage
  • Channels
  • Key Metrics
  • Revenue Streams
  • Cost Structure
As Ash Maurya says in his excellent video coaching you through the Lean Canvas:, this process can be done in 20 minutes and he advises do one quickly because the point is not have a perfect business model but to get to one before your resources run out.

We find this tool so useful we have built it into our Improving the Numbers software GoalDriver.

Company Director Responsibilities

Many of us in small business have signed up for being Company Directors.  It would be interesting to know how many of us found out our legal responsibilities before taking on the role.  I’m prepared to wager that it is a small percentage.

In practice this lack of knowledge is rarely a major problem, but it does crop up and our sense is that it lurks as an answered question in many Company Director’s minds.  Therefore we attempt to answer the question – ‘What are my responsibilities as Company Director?’.

The fundamental duties of Directors are set out in the Companies Act 2006 and are set out below:

1.  Promote the long-term success of the company
Top of the list is a responsibility to act in the interests of the company’s long term success.  This could be against the interest of the majority shareholder or the employees or of other directors.  The success of the company is measured by increase in value over the long term and therefore will be in the interests of the shareholders over the long term, but not necessarily the short term.

2.  Act according to the company’s constitution
All companies are governed by a constitution set out in the Memorandum and Articles of Association.  This is a set of rules that everyone in the company must play by.  So what this requirement means is to know the rules and abide by them.  In small business where the Directors and Shareholders are the same people there is little likelihood of dispute because rules were not followed but occasionally it comes up in transactions with tax consequences eg transfer of shares and HMRC may dispute transactions that are not backed up by the correct minutes etc.

The specifics of each company’s constitution will vary but there are not many that do not include the following:
  • Maintaining records of Directors, Shareholders, Members, Board Meeting Minutes, Resolutions
  • Maintaining statutory records at Companies House (submitting the annual Confirmation Statement and other ad hoc filings)
  • Keeping accurate accounting records
  • Paying Corporation Tax and other liabilities by given deadlines
  • Submitting accurate accounts to Companies House
  • Providing shareholders with Annual Accounts
3.  Exercise reasonable skill, care and diligence
This is not to say Directors must be expert in their duties and running the company, it simply means that they must take reasonable care to get it right.  For example Directors are not required to know Company Law or to accounting standards when compiling statutory accounts but they are expected to employ appropriately qualified people and provide some level of scrutiny of the work done.

4.  Make decisions independently
Obviously this is much more of a problem in the corporate world where constituents such as employees and shareholders may be lobbying for conflicting actions.  The idea here is that company directors should be impartial in evaluating what is in the long-term interests of the company.

5.  Avoid conflicts of interest, decline inducements from Third Parties and declare personal interest
Directors are required to avoid situations where their decision making is compromised by self-interest and specifically to decline offers of gifts or other benefits from Third Parties.  Finally they if they do find themselves with a personal interest in a proposed transaction they are required to declare that interest.

6.  Special responsibilities in the case of insolvency
If a company’s assets are smaller than its liabilities it is said to be insolvent.  In this situation special duties start to become important if Directors wish to avoid being personally responsible for debts.  This is a complex area and one where specialist advice should be taken but a basic concept to understand is that the decision to continue trading in this circumstance can mean Directors end up personally liable for others losses.  In other words, in this circumstance there are responsibilities to creditors (those to whom the company owes money) as well as the company itself.

As well as Company Law, Directors may have some personal responsibilities for business decisions that are illegal – for example under the Health and Safety at Work Act.   Whilst these are too varied to go into in effect it is important that Company Directors comply with the following areas of legislation:
  • Employment
  • Health and Safety
  • Insurance
  • Tax

Everything you ever wanted to know about P11d

It’s tempting to leave it there because we are not sure anyone ever wanted to know anything about P11d –  surely one of the least comprehensible and most mind numbing pieces of reporting required for running a company.

The trouble is that there are really quite large penalties attached to failing to do them – £100/month.  And so with the 6th July deadline approaching we give you our guide and hopefully answer these questions:
  • What is a P11d?
  • Do I need to do a P11d?
  • What do I need to include on a P11d?
  • What is Section 336 form?
  • How can P11d easier?
  • What benefits escape tax on P11d?
What are P11ds?
If P11ds are painful to deal with, the business community perhaps has itself to blame because they close a loop-hole of enjoying perks exploited by companies for many years.

The basic concept to understand is that an employer can include whatever it likes as part of its remuneration package for Directors and employees.  Obviously the most important part will be money, but it can include anything else – gym membership, company car, trips to Disneyland, the only limit is the imagination of the HR department.

Whatever these costs are become tax deductible for Corporation Tax because they are part of the cost of employment which is a cost of the business.  At the same time they do not appear in PAYE earnings so they did not (until P11d) attract Income Tax or National Insurance for the employee or Director that benefited.  What that meant was that, until P11ds, employees and particularly Directors had found a way to earn money without getting taxed.

So in a nutshell P11ds are a way to apply PAYE and NI to benefits to employees and Directors so that they pay tax the same as if they had received the cash equivalent.

Do I need to do a P11d?
The basic principle here is that you do if you have received a non-cash benefit of being a Director or employee.  The problem is that there is no exhaustive list of what might constitute a benefit because as we said earlier the only limit to possibilities is the creativity of employers.

There are also some benefits that do not require reporting because the government is happy for them to be offered to employees tax free (eg childcare).  Finally to make matters worse there are a few expenses that require reporting but do not require tax to be paid.

So the complete answer to the question is that a P11d is required if you have no benefits or expenses that require reporting and the only way to establish that is to go through all your benefits and expenses and see if any of them need to be reported on the P11d.

If that sounds arduous we must be thankful that since 2016-17 tax year the amount of expenses that have no benefit but must be reported has reduced dramatically because we only need to report on benefits / expenses if part of them resulted in a taxable benefit to the employee/ Director.

What do I need to include on the P11d?
You will have to report all of these benefits or re-imbursed expenses if they result in a taxable benefit to the employee or Director.

Unfortunately each type of expense or benefit has it’s own rules about what constitutes a benefit that must be reported.  The only way to know is to identify the areas where you might need to report and then refer to HMRC’s guidance on that specific area.  We are given this A-Z of areas by HMRC:

Typically you are required then to report the type of benefit and the cash equivalent involved.

What is Section 336 form?
If this was not confusing enough, P11d information eventually needs to appear on a Director’s Self Assessment.  Here we hit a problem because the Self Assessment asks us to total all the employment benefits and expenses paid to the employee in order to pay personal Income Tax.  However a few of these expenses may not have been of benefit to the Director/ employee.

Essentially the Section 336 form lets the Self Assessment department of HMRC know that some of the expenses reported on the P11d do not result in a taxable income.

A Section 336 form should be sent if there are expenses or benefits on the P11d being reported that do not result in taxable income.

How can I make P11d easier?
Probably the best way to make P11d easier is to avoid giving Directors and employees any benefits.  At Crunchers we have a once a year conversation with clients to establish if there is anything to report and if so what sums there are to report.

What benefits escape tax on P11d?
As small number of benefits escape Income Tax and National Insurance essentially because the government wishes to promote their use.  We have listed the most important ones here:
  • Childcare – up to a £55/wk limit, with Ofsted registered providers and when offered to all employees
  • Bicycle expenses – as long the the scheme is open to all employees
  • Death in Service payments –  but not life insurance
  • Environmentally friendly cars – depending on the environmental credentials some car benefit is escaped
  • Mobile phones where the contract is in the company name (one per employee)

EPOSNow vs Vend vs Shopify

We are edging ever closer to an integrated world and for retailers one obvious link to make is between the EPOS system and the bookkeeping.

In this blog we compare the three front runners in Xero / EPOS integration – EPOSNow, Shopify and Vend.  With all these systems a lot depends on the hardware and the level of functionality.  We have based our comparison on the following scenario:  A delicatessen, 4 employees, one register, 700 items of stock, stock management, bar code scanner, Xero integration and support.


The basic idea with EPOSNow is that you make an upfront purchase of the till, the touch screen, card machine and thereafter you only pay for Xero integration and support if you want them.  In our experience both usually are required/ desirable and as extras  these cost £25/month each.

The hardware and the software is robust but perhaps not the most elegant and the upfront cost of touch screen register, till and card machine is £1,199.

Functionality includes stock management, reporting, and a healthy roster of add-ons.  We like the Xero integration which includes posting payments to the correct bank accounts / cash.  What it will not do is deal with Ecommerce, nor will it keep customer details.

Visit the Website


In the Vend model hardware is not included and the product is the software which for our example delicatessen costs £79/month or £708 if you pay annually.  The software works on PC or Mac and there is an iPad app however there is no Android app and they do not recommend to use with an Android tablet.  The cost of getting a till, receipt printer and other hardware is likely to be around £300.

Sales and payment integration with Xero is excellent.  It supports mobile and contactless payments which is great and provides an online store and order management.  Customer support is included as standard.

Visit the Website


The Shopify model is also on a subscription basis with our delicatessen would need the £79/month version.  In a twist on the charging, Shopify integrates card payments into the system taking 2.6% of transaction costs.  The software is supported on a browser or iPad/ iPhone and includes the same functionality of Vend for online store and customer database.

We have had more problems with the Xero integration mainly in the area of cash payments but otherwise it works well.  Customer support again is included as standard.

Where Shopify really excels is in its online store.  In fact there is another way to look at the subscription which is to see it as an incredible eCommerce platform that also allows for EPOS with integrations into Facebook, Amazon, Pinterest and other platforms.  When seen this way the cost is extremely good value.

Visit the Website


Clients tend to go with EPOSNow on price but we have found that with the Xero integration  and customer support which they find is essential, the costs are similar.  In terms of interface and reporting there is no doubt much more work and love have gone into the Shopify and Vend systems.

As for choosing for these two, at the level of our delicatessen there really is not much to split them apart but at the next level if another shop were to be added it starts to look like Vend pulls ahead, giving much more functionality around multiple locations and inventory.