Tag Archive | "sage"

Accountancy Software Company in Data Breach

The well known accountancy software Sage, was recently involved in a data breach that is believed to have exposed the details of UK businesses.

Around 300 businesses were involved in the breach, with some of those potentially being contractors and freelancers who were no doubt not too pleased their personal and bank account details would have been on show.

It’s a shame when these kind of things happen, especially when multi-million pound companies like Sage should be right at the forefront of customer security and privacy. However, these things do happen, even to the biggest companies, and I think it’s their response that tells you the most about the company.

With that in mind, it is good to see that Sage, who are a FTSE 100 Company, have made it a top priority to investigate the breach and then take the necessary steps to make sure it doesn’t happen again.

They should be applauded for this approach in my opinion. Instead of hiding away and trying to pass the buck, they are taking responsibility and showing their willingness to tackle these kind of issues right away.

“Our customers are always out first priority,” said Sage. “We are communicating directly with those who may be affected and giving guidance on measures they can take to protect their security.”

No doubt many contractors and freelancers who have accounts with this accounting software company will be watching this news story very closely over the next few weeks, and will be interested to see how it all ends.

They can take comfort knowing that The Information Commissioners Office is also involved with the investigation, so everybody can be assured all lines of inquiry will be followed through with until the matter is resolved and a satisfactory conclusion has been reached for all those who had their details on show.

Personally, I think this kind of thing will happen more in the future as we put all of our details online and have accounts for just about everything.

Sure, the security technology is getting better, which means online criminals have a harder time getting inside, but there will always be mishaps and breaches like the one we have just seen at Sage, and although they are doing everything in their power to put it right, it still doesn’t change the fact that a few hundred business owners in the UK had data on show that should not have been there.

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Sage advice for start-ups and entrepreneurs

Back in March, Sage surveyed over 500+ start-up business in the US in their attempt to see what made SMEs works. The research wasn’t about finance, per se, although that did surface as an indirect effect.

No, this research would look at what made a small business a success beyond the initial capital. And, of course, its continued profit and growth.

Why a predominantly accounts-based company is interested in SMEs

Sage, as most will know, supplies some of the world’s most used accounting software. On top of their business management programs, they’re an actual service provider, too.

The thing is, bespoke sage packages don’t come cheap. Knowing the sage software inside out is a desired skill in its own right.

In that sense, there are the barriers to entry for freelancers or limited company contractors. The learning curve itself and the cost for a one-man business are prohibitive. With so many people across the globe now looking to set up shop on their own, Sage can see their market potentially shrinking.

The State of Startup: what makes a successful business model

A couple of the more interesting facts to surface from the study are:

  • women are more likely to start up their own business than men;
    • (57% v 43%)
  • 30-50 year olds are the most likely age bracket to start their own business, having:
    • earned their stripes as an employee, and
    • still being young enough to do benefit from their industry acumen
  • those approaching middle-age/retirement found it easier to start a business than millennials.

There are other striking, but expected, differences and similarities across the age ranges.

Those who’ve been brought up with social media are more likely to use it as a marketing channel. Those in their twilight are almost 2½ times less likely to use Twitter, Facebook, et al.

But there are commonalities, too, with the following elements reported as issues across the board:

  • increasing revenue beyond the startup capital (46%);
  • new customer acquisition (42%);
  • securing startup capital in the first instance (41%).

What actually works, then?

In order to segment the study group, sage grouped the startups into tiers.

In the top tier, they found that 9 out of 10 had achieved their initial goals. The key to their success, compared to only 12% of the bottom tier attaining similar results, can be found in the following common traits:

  1. Partnerships:
    • For contractors offering a bespoke service, the concept of starting a business can be narrow. 59% of successful business ventures were found to have more than one founder in the sage survey;
  2. Business Plan:
    • That old adage, “fail to plan, plan to fail” was never truer than for the startup business. Those who’d launched successfully in the top tier were 78% more likely to have planned a business map than those in the bottom tier;
  3. Use your Yoda:
    • It might be a very British thing to do to have a mentor, but most limited company contractors know the benefit of having an accountant who knows how their payment structure works.In the sage survey, the best-performing businesses leveraged the knowledge of mentors and accountants to fill in the blanks.
  4. Marketing: it’s not a dirty tactic:
    • Marketing is no longer about cold-calling, pinning leaflets to windscreen wipers or leaving a tear-off flyer in the bus stop. Invest in a blog, engage on social media and leverage the relationships in forums.Using a branded website as the hub of your online marketing strategy is crucial to success in 2015.
  5. It’s not all work, work, work:
    • At first glance, you may think this list all sounds like too much. You’ve got to find the time to sell your service or product, too. So this will surprise you.Those in the top tier of the sage study were more than half as likely to achieve a great work/life balance than those in the bottom tier. Yes, they were the most successful. But they also enjoyed the best work/life balance. If you enjoy your business and find the time to recharge your batteries, you’ll be invigorated when new opportunities present themselves.

What do the experts make of the findings?

According to those who nurture startups, 40% of new businesses fail. They either don’t:

  • consider the demand for their service with a critical enough eye;
  • borrow so much capital that they ever make enough to clear the debt;
  • have no conception of controlling the costs associated with running a business.

It’s the latter that we can identify with. In the survey, more than a third of advisors don’t trust the figures that entrepreneurs present to them.

It’s no wonder that almost 8 in 10 of those advisors suggest either buying bespoke accounting software to handle your business or appoint an accountant.

Knowing a trade is one thing. Being able to run a business another entirely.

For contractors, it’s taken you time to get to a stage where you can make good profits from your expertise. You don’t want to dilute your earning power by labouring over company accounts. Leave that to the experts in finance, while you focus on earning. It is that simple.

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Contractor accountants should prepare for payroll year-end

It’s payroll year-end time again and some accountants will have a list of key tasks that need to complete for their clients.

HMRC has published a checklist of all the various PAYE deadlines for this year on its website. The first important deadline is April 19th. This is the date by which postal payments of outstanding PAYE and Class 1 national insurance contributions must reach HMRC.

People who use electronic payments must make sure their payment reaches HMRC’s bank account by the 22nd of April. However, HMRC has warned that because the 22nd falls on a Sunday this year, payment will need to be in its account by the 20th unless your bank operates a faster payments system that allows transactions to clear on Sundays.

The next date for the diary is the 19th of May. This is the deadline for submitting Employer Annual Return P14 and P35 forms. Employees should be given their P60 form no later than the last day of May.

The majority of employers are required to file their end of year returns online. Similar to the system of online self-assessment filing, the first step of the process is to register on the Revenue’s website. This needs to be done at least a week before the deadline date in order to leave enough time for the activation code to arrive.

People who use accounting software to process their payroll will find that their program does most of the work for them. Employers should already have received information about any changes they need to implement to their payroll package and it would be a good idea to check these over as soon as possible.

The major software providers, such as Sage, keep their telephone support lines open longer during the payroll year-end period but even so, the lines are often extremely busy and there can be problems getting through to somebody if you have a problem.

Don’t let yourself get caught out at the last minute. Start preparing for payroll year-end as soon as possible!

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Image: check list by Artois Bibliothèques

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Are contractor accountants providing online services?

Accountants for contractors might want to brush up their online skills after Sage reported that online services will be the biggest growth area over the coming 12 months.

41% of the accountants who took part in Sage’s research said they will be focusing on online services for the rest of this year and nearly 75% said their working practices would change over the next three years.

It would appear that only 29% of accountants carry out the majority of their work in the office and now that around 60% of accountants are using devices such as tablets and smart phones, clients are becoming increasingly interested in online collaborative reporting.

However there is a difference in opinion over what services should be available using mobile apps. SMEs think business planning advice, final accounts and financial services should be offered whereas accountants say mobile technology is best suited to bookkeeping, compliance services and tax planning apps.

Jim Scott, the MD of Sage Accountants Division, said that sharing financial information online is a natural progression for entrepreneurs who have been brought up with Apple, Facebook and Google and accountants should take advantage of the opportunities available.

Online accountants need to demonstrate that they understand collaborative working practices and are able to provide them if requested. Not every business is suited to online accounting so accountants and clients must be able to choose the way in which they access data.

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Will HMRC really show leniency towards iXBRL failings?

Contractor accountants will probably be wondering whether the taxman is going to stick to its word and be lenient towards businesses that were unable to file their corporation tax returns using iXBRL.

HMRC has sent letters to software developers promising sympathetic treatment for the next two years due to iXBRL software packages that are unable to handle the new Minimum Tagging List requirements.

However, the letters also warn that the Revenue expects companies to progress towards full compliance before the 1st April 2013.

Accounting software giant, Sage, are still having problems meeting the tagging requirements laid down by HMRC. Software solutions provider, IRIS, pointed out that Sage customers could be approached by the Revenue after submitting their returns. IRIS’ product director, John Pattenden, welcomed the news that HMRC will not immediately reject returns that do not comply with MTL, but customers will need to rely on the goodwill of the Revenue in order to go on operating and submitting returns.

Meanwhile, accountants and tax advisers have been warned that the cost of implementing the necessary iXBRL software could lead to expenses rocketing. The system is meant to highlight key information automatically but experts claim that 20% of tagging will still need to be done manually.

Donald Drysdale, the assistant director of tax at ICAS, said UK advisers will see an increased administrative burden due to iXBRL. The profession is already trying to help struggling businesses and they now have the dilemma of whether or not to pass on the additional costs of iXBRL reporting to their clients.

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Plea to delay compulsory online filing as solutions aren’t ready

The CIoT and the other main professional accountancy and tax bodies have sent a letter to the Exchequer Secretary asking the government to reconsider the timing of compulsory iXBRL online filing. However, it seems unlikely that HRMC will bow to the request.

The ACCA last week flagged up the lack of software capable of handling iXBRL. Chas Roy-Chowdhury, head of tax at ACCA, said they had been trying to negotiate a deferral with HMRC for some time but the furthest they’ve got is a promise of a light touch on compliance when the system is first implemented.

Accounting software provider Sage has admitted that its new iXBRL product will not be ready in time for the corporation tax filing deadline of April 1st. The company says it will have an interim product available, but the release of the full version will be delayed. CCH has not yet delivered its integrated package but has indicated it will be ready in time.

It will be possible for people using Sage accounts production software to file UK GAAP and IFRS tax returns. They will receive a temporary product, ONESOURCE, from Thomson Reuters, which includes the minimum requirements for iXBRL filing.

Contractor accountants will be able to compile tax returns as usual within Sage software and then transfer the data into ONESOURCE. The majority of this process is automated but some IT experts believe this could add a lot of extra time onto the filing process.

In addition to understanding the mechanics of iXBRL, accountants using Sage now need to learn how to transfer data into ONESOURCE and there’s just 3 months left to do it. They will then need to learn Sage’s iXBRL product when it is released later this year.

Will this workaround cause accountants to lose faith in Sage and switch to another software provider? Only time will tell…

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The VAT increase is near but are contractor accountants’ clients prepared?

Although UK businesses have had plenty of warning that VAT will increase to 20% at the beginning of January, almost 20% of small businesses are still not prepared.

Business software provider, Sage, conducted a survey of 1,500 SMEs and discovered that 11% have not even thought about the increase and another 7% are worried that they have not done enough to prepare for the change.

This change will not necessarily be as daunting a task as it was previously. We’ve had two changes in the last couple of years, so it’s not as if contractor accountants and businesses are faced with a completely new phenomenon. Small firms will have to decide whether to pass on all or some of the increase to their customers, or absorb the full amount themselves.

The other problem for businesses this time around is that the increase does not take place on the first of a month. Therefore some firms will need to complete VAT returns showing two different standard VAT rates. If business owners are in any way unsure of how to proceed, they should contact a contractor accountant for advice.

Meanwhile, third-sector employers who are not registered for VAT could find January’s increase represents a commercial nightmare, according to the MD of Cash Simply, David Thornhill.

The standard rate of VAT will rise to 20% as from the 4th of January next year and the Charity Tax Group estimates that this will increase costs for the third sector by an extra £140 million.

Employment businesses must charge VAT on the wages of the workers they supply. Businesses that are registered for VAT claim this back as input tax on the VAT returns, but charities are not VAT registered and therefore they cannot reclaim this cost.

However, there is a way around this problem, Thornhill explains. If a temporary worker was to be engaged on a short-term contract and the charity outsourced the payroll processing to an independent payroll company that also funded the wages, invoiced them separately and was effectively the charity’s PAYE agent, the unrecoverable VAT would be removed from their costs.

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