Streets Annual Accounting Software Update 2015

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Streets Annual Accounting

Software Update 2015

Tuesday 29th September

Holiday Inn, Cambridge

Thursday 1st _{October 2015}

The Showroom, Lincoln

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Introduction

James Pinchbeck

Marketing Partner

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Introduction

 An update on popular accounting software

Sarah Leonard, Accounting Software Specialist at Streets Chartered Accountants

 Relieving the burden and cutting the red tape

Lee Maughan, Director | Robin Lee, Partner at Streets Chartered Accountants

 Getting the best from your financial reporting

Sarah Leonard, Accounting Software Specialist | Ched

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An update on popular

accounting software

Sarah Leonard ACA

Senior Manager

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What’s new in

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Cloud Accounting Software

QuickBooks Approved Partner

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Advantages of the Cloud

Mobility:

• Enter your figure on the go

• See your figures on the go

• Check customer balances

on the go

• Email invoices from tablet/phone

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Create a virtual office:

• Split the workload without having to share the same laptop

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Advantages of the Cloud

Make use of new technology: • Works on Macs

• Bankfeeds

• Do you re-write the bank statements? - use bank feeds to speed up this process

• ‘Scan’ your documents by taking photos on your phone/iPad

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Make use of new technology:

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Advantages of the Cloud

A fresh reporting approach:

• Weekly reporting – ideal for retail organisations

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https://www.youtube.com/watch?featur

e=player_embedded&v=cuV87B8tHy4

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Record Costs or Stock Record Due Dates

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Post Memos

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 Freephone support

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http://www.streetsweb.co.uk/services/a

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 Bespoke due dates

 Auto rules on bank reconciliation

 Repeat auto billing

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Desktop

• Fixed location

• Remote connection - VPN…

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Sage 50 v2015 +

Sage Drive (Hybrid)

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A copy of the data is stored on the cloud (Sage Drive)

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The data can be viewed on external devices

Transactions can be posted from external devices

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Why Sage Drive?

Mobility:

• I love Sage so much I want to take my Sage home with me

• Access Sage from home/second location

• No technical knowledge required to set up - just an internet connection

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Why Sage Drive?

Mobility apps:

• Salesmen access on

tablets to raise invoices, check stock, check

customer balances

• Check key balances from your phone

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Sage Mobile Sales - for Tablets

https://www.youtube.com/watch?feature=

player_embedded&v=0RCXkQvq_ZM

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Sage Tracker - for Smart Phones

https://www.youtube.com/watch?v=QsFk

qe5IkDI&feature=player_embedded

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Why Sage Drive?

Create the virtual office:

• I hate doing my accounts - I wish I could get someone else to do it

• Split the workload without having to share the same laptop

• Bookkeeper offsite access

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New Sage 50 - v2016

Version 2015 New UI (layout) Automatic Backups Windows Keys Sage Drive

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New Sage 50 - v2016

Version 2016

Sage Drive

Removing some pain Adding some help

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The bit you won’t

like to start with…

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Now for the bits

Improved Error Correction

Edit Journals

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Improved Error Correction

Un-allocate Transactions

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Improved Correction Control

See what’s been edited,

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Surfacing Information

• Easier to analyse data • New columns and fields

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Surfacing Information

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Bank Feeds

 Bank Feeds powered by Yodlee*

 Version 2016 onwards

 Sage Cover Extra /Subscription

 Makes reconciling bank accounts simple and error free.

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powered by Draycir

Sage Accounts Bank Feeds

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• Integration from your online bank into Sage

• Download transactions from your bank into Sage

• Automated matching of transactions for reconciliation

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Bank Feeds

 Match payments and receipts quickly and easily

 Spend less time on time-consuming data entry

 Real-time view of your cash position at a glance

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Subscription

vs

One-off

vs

Cover

vs

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• Short Story - whenever considering Sage software, upgrades or cover contact us for a quote

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One off Cover Cover

Extra Subscription

Subscription with cover

Own or

‘rent’ Own - - Rent Rent Service

packs & fixes

FOC - - FOC FOC

Updates Chargeable Chargeable Included FOC FOC

Sage Drive – one free user

Free for first 12 months -then £ -Free if you have Sage Cover Extra FOC FOC

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Advantages of Subscription

• Software always up to date

• No up front cost

• Includes Sage Drive for first user & accountant FOC

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Advantages of Subscription

• Offer prices

• A chance for a review

• Pay for what you need now

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Streets Discounts

• Streets Client Discount - One off prices

• Streets Client Discount - Subscription

For a quote - email:

[email protected] [email protected]

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Relieving the burden and

cutting the red tape

Lee Maughan BSc (Hons), FCA

Director

Robin Lee BSc FCA CTA

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A topical update

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VAT MOSS

 VAT Mini One Stop Shop (effective 1 Jan 2015)

 Digital services to non-business customers in

other EU countries

 What are digital services?

 Outside the scope of MOSS

 How VAT MOSS works in Sage

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VAT on Discounts

All change for VAT on prompt payment discounts.

Previous rules permitted a discounted rate to be adopted on invoices, regardless of whether the discount was actually taken up. so, if a prompt payment discount ('PPD') was freely available, under the old rules, the VAT was calculated as follows;

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VAT on Discounts

Net Invoice Value £1,000.00 VAT at 20% £ 200.00

Total £1,200.00

PPD available; 5%

Net Invoice Value £1,000.00 VAT at 20% £ 190.00

Total £1,190.00

Thereafter, it was irrelevant whether the discount was actually taken up, and the supplier would pay £190 to HMRC and the customer could

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VAT on Discounts

From 1st April a whole new regime replaces this system.

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VAT on Discounts

Option One

The original invoice shows full values and, if the PPD is taken up, credit-notes are subsequently issued (plus VAT) for the PPD values.

&

Invoice Goods £1000 VAT £200 Total £1200 Credit Note Discount Taken £50 VAT £10 Total £60

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VAT on Discounts

Option Two

The VAT elements are adjusted by both supplier and customer without issuing credit-notes:

Invoice Goods £1,000

VAT £190 Total £1,190

A discount of 5% of the full price applies if payment is made within 30 days of the invoice date. No credit note will be issued. Following payment you must ensure you have only recovered the VAT actually paid.

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VAT on Discounts

Option Two

The original invoice must contain full information about the available PPD, including the following as a base requirement;

 the terms of the PPD (PPD terms must include, but need not be limited to, the time by which the discounted price must be made).

 a statement that the customer can only recover as input tax the VAT paid to the supplier.

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VAT on Discounts

Additionally it may be good practice to include:

 the discounted price

 the VAT on the discounted price

 the total amount due if the PPD is taken up.

 It is recommended by HMRC that the following words are always included in all PPD invoices being issued post April 2015

 “A discount of X% of the full price applies if payment is made within Y days of the invoice date. No credit note will be issued. Following payment you must ensure you have only recovered the VAT actually paid.”

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VAT on Discounts

 Whichever process is adopted, it is vital that there is a

good audit trail for both supplier and customer to

provide support for the treatment adopted

 HMRC will not want to enter into discussions between taxpayers at each end of a transaction concerning

whether or not discounts were actually taken. They will

rely instead on a taxpayer's systems and audit trail

to prove entitlement if they are looking to reduce their

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VAT FAQs for Small Businesses

 Flat rate scheme

 Cash accounting scheme

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Auto Enrolment

 Where are we up to?

 Are you in the ‘Test tranche’?

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AE - Watch Out!

 Are you in the ‘Test Tranche’?

 10% of the 0-30ee’s staging in June 2015

 5 months to register – non-compliance notice Oct/Nov 2015

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Sage Pension Module Update

 Automate the Pension review process

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‘Emergency Budget’ Update

 Highlights include

 New IHT for main residences

 Future cut in corporation tax

 AIA set at £200,000

 Employment allowance increase to £3,000

 Living wage

 Non-dom status

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 Corporation tax falling from 20% to:

 19% in 2017 and

 18% by 2020

 Annual Investment Allowance will not fall to £25,000 but be set at £200,000 “both this year and every year”

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‘Emergency Budget’ Update

 Employment Allowance increasing by 50%

to £3,000 from next year

 Abolishment of Dividend Tax Credit

 Replaced by a new Dividend Tax

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 National Living Wage for workers over 25 of £7.20

 Personal allowance from £10,600 to £11,000

 The higher rate tax threshold, 40%, also climbs from £42,385 to £43,000

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‘Emergency Budget’ Update

 Property related changes:

 mortgage interest relief for landlords

 reform of the wear and tear allowance

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Taxation of dividends

 No more dividend tax credit

 Dividend allowance of £5,000

 In excess of £5,000 taxed at:

 7.5% basic rate

 32.5% higher rate

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Taxation of dividends

 An example:

2015/16 2016/17

Salary 20,000 20,000

Dividend – received 50,000 50,000

Dividend – tax credit 5,556

-75,556 70,000

Personal allowance (10,600) (11,000)

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Taxation of dividends

2015/16 2016/17

Taxable income 64,956 59,000

Tax at 0% - £5,000 dividend allowance -

-Tax at 7.5% - 1,350

Tax at 10% 2,239

-Tax at 20% 1,880 1,800

Tax at 32.5% 10,780 10,180

Less: tax credit (5,556)

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Taxation of dividends

 Questions to consider:

 Is incorporation less attractive?

 What might happen to Class 4 NIC when Class 2 contributions are abolished?

https://www.gov.uk/government/publications/

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HMRC Enquiries

 HMRC Campaigns

 Electronic information

 Volume of tax enquiries

 Tax enquiry fee protection:

 £350 per annum (excl. VAT) for a company with turnover of £1.5million

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Online filing

 Online digital accounts are coming

 Various exceptions:

 Savings allowance

 Dividend allowance

 Certain BIK

 Will the filing deadline change?

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FRS 102

 A new balance sheet

 Consolidated Statement of Financial Position

 FRS 102 mandatory for accounting

periods beginning on or after 1 January 2015

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FRS 102 - Assets

 Goodwill - 5 years life or less

 Investment Properties:

 Revalued annually to fair value

 Movements taken to profit or loss

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FRS 102 - Stock

 Long term contracts become 'construction contracts'

 Contract costs expensed as incurred

 Percentage completion used to recognise the corresponding revenue

 Cost of stocks must be measured using the FIFO or weighted average method

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FRS 102 – Financial Instruments

 Recognition and disclosure of financial instruments is a key area of change

 Unlikely that a set of accounts under FRS 102 will not contain financial instruments.

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FRS 102 – Cashflow Statement

 No exemption from preparing a cash flow statement under FRS 102, although

reduced disclosures do exist for qualifying entities.

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FRS 102 – Leases

 Classification of leases as finance or

operating still relies on the substance over form

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FRS 102 – Provisions

 Deferred tax must be recognised on revalued assets

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FRS 102 – Holiday Pay Accruals

 An accrual for holiday pay is specifically required

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FRS 102 – Tax Implications

 Change of accounting basis:

 Goodwill amortisation

 Loans and financial instruments

 Lease incentives

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Relieving the burden and

cutting the red tape

Lee Maughan BSc (Hons), FCA

Director

[email protected]

Robin Lee BSc FCA CTA

Partner

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Getting the best from your

financial reporting

Sarah Leonard ACA

Accounting Software Specialist

Ched Howard

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What Should I be

Doing at Month End?

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Getting Ready for Month End

Level One

• Post all sales invoices

• Post all purchase invoices • Bank reconciliation

• Credit card reconciliation • Run VAT return

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Level Two

• Review sales ledger

• Review purchase ledger • Post wages journals

• Post stock journals

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Level Three

• Consider prepayments • Consider accruals

• Consider accrued income • Consider deferred income

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Getting Ready for Month End

Level Four

Review the Balance Sheet first: • Fixed Assets

• Stock

• Trade Debtors • Other Debtors • Bank

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Level Four

• Trade Creditors • Other Creditors • VAT • Wages

• PAYE/ NIC & CIS • Capital & Reserves

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Getting Ready for Month End

Level Five

• Review P&L

• Consider timing/accruals

• Correct coding, consistency • Miscellaneous/suspense…

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Level Six

• The game changer

• Moving on from compliance

• The next level - what matters to your business?

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Getting Ready for Month End

Level Six

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Budgets

To compare results to… Restraints

Targets Fixed

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Level Six

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Forecasts

Predictions Updated

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Forecasts

Q1 – Actual £k Q2 – Actual £k Q3 – Actual £k Q4 – Forecast £k Year -Forecast £k Sales 152 136 123 150 Cost of Sales 74 63 51 60 Gross Profit Overheads Net Profit

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Forecasts & Budgets

Q1 – 3 Actual £k Q4 – Forecast £k Year -Forecast £k Year – Budget £k Year – Variance £k Sales 152 150 Cost of Sales 74 60 Gross Profit Overheads Net Profit

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Level Six

• Profitability reporting • Cost centres • Job costing • Tracking

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Level Six

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Level Six

• Interpretation - what can be learnt from the numbers?

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Presentation

• Manual

• Reports within the software

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Examples of Reporting

 Off the shelf

 Edit

 Bespoke

 Send to Excel

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Summary

• Get the bookkeeping tidy

• Get the accounts prepared on an accruals basis

• Report for profitability • Report in the right way

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Want Some Help

• Exploit our experience • Feedback form

• Chat over lunch • Call/email us

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System Review

• Time for a fresh start? Time for a review?

• House that Jack Built • Staff

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• New coding set up

• Change of personnel - unnecessary steps • Change of technology

• Understanding the numbers • Do you need some help

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Training

 Accounting/bookkeeping

 Reporting

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Support

 Onsite

 Sage Drive/Cloud

 One off

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Getting the best from your

financial reporting

Sarah Leonard ACA

Accounting Software Specialist

[email protected]

Ched Howard

Accounts Senior

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