Transcript
Speaker: Hello, everyone, and welcome back to another episode of the podcast. In today's episode, i interview John Richardson. So John is also known as the startup accountant and through his accountancy business, he not only helps people with their accountancy needs, he also helps people understand their businesses and plan their finances and is truly a fantastic communicator to help business owners understand their finances and get rid of that fear that comes with bringing in money to a business and what to do with it and the fear of tax and expenses and everything that's running around your head. John is fantastic at explaining what's important to know, what's important to do
Speaker: and I find any time I talk to him, i leave feeling clearer a about my own business, my own finances and what I need to do.
Speaker: And I think that's really, really important as a business owner. One of the biggest causes of anxiety for a lot of small business owners and startup companies. and Is finances.
Speaker: As creative people, we can sometimes be a little bit and fearful of the finance side of things and the numbers. And they are such an important part of running a successful business. So in this episode, we cover so much. and We will definitely be doing a part two further down the line because there was a lot we didn't have time to cover. But we talked about getting started as a business owner.
Speaker: We talked about the fear and lack of knowledge around finances that a lot of entrepreneurs experience. We talk about sole trader versus limited company and what's appropriate and when's the right time to think about a limited company. We talk about managing your tax for both of the above sole trader, at limited company. Is there any differences and and what we need to do? We talk a bit about putting money away for tax so it's not a huge cause of anxiety. and We talk about putting profit into a separate savings account. Also, we talk about the importance of invoices and receipts and actually creating a system around these so that when it's time to do your tax return, it's not a massive job that's causing immense stress in your life. It's something that you've just tipped away at and also helps you actually keep on top of knowing your finances, knowing your numbers month to month as well. and We talk about business expenses. The one question everyone wants to know, what's allowed, what's not allowed? and What might we not know that is allowable? And I think one thing I've taken from this conversation, it it does depend on the actual business.
Speaker: and But we do have a good conversation around business expenses. We talk about VAT, dreaded VAT, when we need to be VAT registered, what that actually means, when it's not really worth pushing to the VAT threshold and when it's what well worth pushing past it. i what to do in relation to your clients and charging when it comes to VAT and VAT returns and claiming VAT back. We cover all of that lovely topic that none of us really want to think about, but we really need to. And we also have a really, really frightening conversation around revenue audits. The biggest fear of business
Speaker: business owner is being audited and and he talks through the process of what that actually looks like. He talks about what we can do to just keep on top of things so that it doesn't have to be a big deal and it shouldn't be something that we fear and things that we shouldn't be doing and things that we should be doing. And I've left this conversation feeling so much clearer, as I said, as I always do, and feeling so much clearer about my finances, about my business. And i that was my objective with this conversation was that I would be able to offer some clarity
Speaker: to someone who is listening who might be really feeling stuck in the sand about this stuff and so here is the episode with John Richardson all things finances I hope you find it as helpful and as clarifying as I have okay John welcome to the podcast Thanks a mil, Kate, for super having me on. and Hopefully I don't put anyone to sleep now talking about accounts and taxes and finance. what The exciting, sexy side of it, yeah. know I have so so many questions, though. So many questions what that and might seem like stupid questions, but they're genuine questions that...
Speaker: I over the years have really struggled with and some of them that I still probably very much do so i don't worry I'll have so many questions but but brilliant no absolutely just just just bring them on because like again like it's it's first of October now this is really coming into our deadline season and I always think like the sole traders coming in that you never hear of throughout the year that they started a business 18 months ago and They're dreading me ringing them going like, John, you know, okay, right, but can we do it next week or the week afterwards? Like, you just jump in, rip off the band-aid and see what it is.
Speaker: and but But the best way to do it is be proactive. And if you're starting a business, like, get your foundation right on whatever it is. If it's like, just right registering yourself for income tax or setting up a standing order with revenue just for your taxes like i think that's actually one of my number one tips is like if you're starting out a small business and you're going at yourself like don't let a big tax bill build up in the back of your head because it will eat a away at you and if you can just kind of like to set it up like it could be even be a hundred or a month but like have a chat with your accountant and like think, okay, if I do go down this certain path and I can take the pain off of those October, November meetings with deadlines, because Christmas isn't too far away and you don't want to ruin Christmas. I would always say to just kind of just set up a standing order throughout the year. So you come in to meet me then and it's grand. It's like, right, we have amount on account and it's kind of just bobbing along nicely like versus and coming in you cut out of a 15 grand bill or something, which is it's ah a huge amount of money.
Speaker: Yeah. And gene like, I think this like finance for a lot of business owners, especially startups, it is the one cause of so much anxiety. And for myself, right. So I came from like a 15 year teaching career where I didn't really have to think about tax or pension or anything like, you know, i was, you know, if anything, I got a tax refund every year, you know, from overpaying tax or whatever. And like all the things from like setting up the business with with CRO to, you know, to putting money by for tax or even, you know, when I started my business and I thought I'll be making this amount per month thinking, oh, God, this will be brilliant. And then realizing, oh, wait, hold on, I have to give away half of it. What? You know, a lot of that stuff.
Speaker: It's and it took me years really to. get over a lot of the fear and the lack of understanding around finances. And I think that's why i really wanted to have this conversation with you that so that it would be really helpful to others, because it took me a long time to find someone who could really explain things to me. and And ah I think I think it can be quite hard to understand what's non accountant folk or the ones like me anyway, that it's really that it can be really hard to understand. What am I supposed to do? Am I doing this right? And I'm like, like you said, getting the sudden tax bill and be like, holy shit, that could absolutely wipe out your business if you if you aren't expecting it.
Speaker: Yeah, and that's the thing. It's like, you know, if you get this, like, sudden, like, tax bill you weren't expecting and, you know, all of a sudden, if you've been doing something wrong the last 12 or 18 months in your business and you need to go back and correct this, like, oh, e you have a big tax bill. We'll stick with a 15 grand example there. You know, now they only need to manage this and probably pay it back over in the next 12 months if you don't have the money.
Speaker: And then also you need to, like, change your business that like you're putting this money aside for the next tax year like and all of a sudden like you know your lifestyle or you know your spending has to drastically change so if if you take the foot off the pedal and you're not actually engaging with it like it can be can be it can be terrible like and you know i'd say 90 clients don't have finance background They great idea for business. They went out, they set it up, they did really well, they scaled it.
Speaker: And they're in a situation now where they have to develop a lot of compliance. Like if you have a small company, i.e. you're the only one and in the company, you're on payroll, monthly payroll, you're VAT registered, like you probably have about 23 filings year, which...
Speaker: you know, month to month doesn't seem like a lot because they're not all landing on you, but like that is like two of them a month and you stop and think going, right, well, what two are due this month? And if you don't like give yourself like half an hour a month to try and engage this or think, right, what taxes are due, when are my accounts CRO or revenue?
Speaker: Like you are leaving a bit behind you because you need to kind of really know when they're coming because You know, it's it's it's it's just like you don't want to get caught out and you don't want to miss one either, because if you do, there's penalties and funding fees and everything else.
Speaker: And it is it is crazy. Like, so I always think like and I get it like you're busy running your own business. It's like you need to get money and to pay the bills. need to pay staff you to keep customers happy because if you don't they'll leave but like you also have to wear that hat of accounting and finance and that's why you do need a good partner there that kind of has the experience that can kind of make it easy for you flag the things need to know about do the heavy lifting the things you don't want to do or you'll be wasting your time and then you know report back to you with how the business is doing and give you a good steer because you know, without that, it's like, like, demand like I've often come across people and like, they're really good businesses, but like, they're just missing that bit of profitability in it, or maybe even it's not even a viable business and they keep chasing debt, which is absolutely dangerous as well. And,
Speaker: You know, so sometimes as well with limited company, you're chasing debt just to keep the bills in and just to keep to so keep the bills paid and just keep the show on the road, like you can get absolutely hammered then because like that debt follow you personally. Like you could easily have 30 grand following you after you close up a business and all of a sudden like,
Speaker: your income is gone you've no you've no job and you still have mortgage and kids and a partner but like you have this 30 grand that's following around and like the bank don't really care that you your business has finished up you've signed a person a guarantee you did it at the time because you needed the money and they've gone very quickly. But, you know, that's the situation people can find themselves in. And you could be carrying that around for a couple of years and its it leaves an awful sour taste in some people's mouths.
Speaker: You know, but maybe the right decision was two years before that was to close the business. It just wasn't viable. should have gone out and gotten a job somewhere else or change industry. Or, you know, it's it can be very difficult difficult because as well, like, you wear all the hats. If you're the boss, you're making the decisions. Like,
Speaker: no one's there telling you don't sell this service or sell this product or you need to do more of X or Z. It's difficult because you have to keep yourself accountable, like, It's and this is so hard. And I think what you're saying, everyone's probably feeling sick at the thoughts of that, because that is literally everyone's worst fears, isn't it, when they start a business? And I think it's creative people quite often that will start up a business. You know, they're excited. They want to help people. They have a great product, but they want to change the world in some way. And they're they're so excited and
Speaker: the finance side of it quite often is not their strong point. I'm generalizing, obviously, im like myself as an example, not the strong point. And I think as well in today's at world of social media and mentorships and, you know, that there can be a lot of, you know, you can make this amount per month, you can make this amount. And it's like push, push, push, hustle, hustle, hustle. And it's all about taking all of this money in with absolutely no knowledge or skills.
Speaker: of how to manage that money and what legal things actually need to be done in the background. And like for me, it was like I was losing sleep over it. So when my my business started to grow and I started to make quite a significant amount of money,
Speaker: I didn't know what to do with it and I didn't I'd never dealt with that kind of money before. I was genuinely now because i I err on the side of fear as a person, I was like, oh, my God, how much of this do I own tax? how well What do I do with this? And, you know, and then as the business grew, the expenses grew.
Speaker: And then it's like, oh, wait, I'm not actually as rich as I thought because I'm paying out left, right and center. and I really need to look at expenses. And I think this happens a lot as well to startups. And as you've kind of alluded to there, that suddenly they're chasing debt or they're like, this will pay off. And it's great to be, like, you have to be a little bit crazy to have your own business, don't you? You have to have a vision and you do have to take risks, but like there has to be a balance between your risks being, you know, somewhat you're like, okay, fool okay, phew, now we need to be sensible and just being reckless.
Speaker: Yeah, like I always think someone that has the bottle to go out and set up their own business, like it's a massive move. Like the amount of people around you will say, no, don't leave your job. What are you doing? You're crazy. that lot And like you kind of need to you have that good feeling that you know what's going to work and you have to back yourself. And.
Speaker: At the end of the day, other people can't see the world through your eyes either. So like if you do know something is right, absolutely exhaust everything and go for it. you know If you do have a good idea as well, engage with an accountant or like you can book in with us for free 15-minute call. We can shoot the breeze on it. on I can give you an idea of I think it's a runner, very high level. Like, I'm not going to tell you to go off andm like put a hundred grand into a business. set some But John, this is what I was missing at the start, right? Because not all accountants do this.
Speaker: And it took me a long time. And I know for some accountants, they would say, that's not our job. Our job is to do the numbers. You know, you bring us the numbers and we, whereas, and And what you need is a financial advisor. But then I contacted a financial advisor and it was more about wealth management. And that was it. I wasn't there yet, you know, and it took me a long time. It wasn't until and I found James Gibson and then yourself through him that I found people who could actually help me and teach me what I needed to know. And I learned a lot from James. and i'm learning a lot from you because like that if there's something i really need to know or things i need to get set up you're like let's have a call yeah a lot of accountants don't particularly offer that i i think it's lot of accounts just fall into this compliance bracket and it's like right you need your income tax done you need your tax your corporation tax done oh you need to file your accounts to cro and
Speaker: vat whatever it is and they're just constantly going around this kind hamster wheel but like the value add services like what james does is amazing like with his spreadsheets and he helped me understand my finances yeah yeah like it's absolutely brilliant it doesn't leave a penny or a cent behind which is absolutely amazing and and i think it's it's it's the likes ourselves know we just need to go that bit further like and you know just take a step back and think right but where are you going with this business like you know is it making you money or are just keeping yourself busy? Because again, you made a really good point there, Kate, about like the pressures social media. Like some people enter industries, setting up businesses, thinking, oh God, so-and-so is on social media there.
Speaker: They have a new car. They have a new watch. They're going on a holiday. But like, i always call that social accounting right that's potentially the tip of the iceberg you don't know what's beneath that there could be credit cards there could be loans car loans mortgages blah blah blah like you don't actually know and unfortunately there's no safeguard on social media to to to verify that like oh this person is making x or whatever it is but people just see that and they think right well that's what they see and now i need to do it if i want to be successful and Usually the people who are showing off wealth are not usually the ones with real wealth. Isn't that right? Yeah. Yeah. Yeah. Like it's funny because some of my most successful clients, like they, you wouldn't even think like that they're that successful. Like they just kind of do their own thing under the radar. And,
Speaker: Yeah, they date they dress nice and everything, but, like, it's not... Not out with the Lamborghinis and the... Yeah, they're not showing off the Lamborghini. If it was to open their accounts for, like, and you saw it, you know, wow, Jesus, like, and that's...
Speaker: that' that's the more interesting part I find. Now I know it's probably not as exciting, but you have to make your own excitement. And what I always say to people... Is this what accountants say? Yeah, absolutely. Yeah, yeah. But it's like you're trying to save money and you've never done it before. like That's a very hard thing to do because something has to get sacrificed and you need to be consistent. Because, you know, if you think of it like in a week or a month, there's only so much you can possibly do. But if you have a really good three or five year plan,
Speaker: you can do so much like that is a serious mental monster like 60 months or whatever it is that you can continuously do something but it's like even health and fitness like you need to change things drastically because you need to have the hunger to do it and the desire and commitment and there's no point in setting goals that like are completely unrealistic because you're not going to maintain them you do it for two months and then you'll be like i affect this Yeah, I'm going like off to McDonald's for lunch again or whatever it is like and you need you need to have have peace and happiness with something. So what I would always say to people is like just like if you are trying to save money, like save us instead of a savings account, of course.
Speaker: to your 300 euro whatever you can afford into it a month and leave it there a business savings account so separate to to your business account yeah absolutely because i always think like the current account in your in your business it gets so busy like there's so much money coming in so much going out and like you're you're trying to do the cash flow carousel going okay well this money is going to come in next week and oh god i'll have to pay the back then and payroll and then insurance but oh this other money's coming in and like whenever you do that like you're wasting time i think because you're trying to reassure yourself that everything's okay or else you're actually trying to make sure there is enough money there which is a different problem but like you should have a system where you know how much money is coming in
Speaker: and it stays in that bank account and then any excess like oh e your profit goes to savings account if it's 200 or 300 euro a month or a week or whatever it is and then you know that's your profit if you start like say if you haven't set your goals right and you need to start dipping into the profit account to bring it back over then you know okay you're physically moving a back but like if it's all swishing around in your current account it can nearly be too late before you know there's a problem. And I always just think physically having to transfer money from one account to another, it kind of annoys you because if you have that goal of getting 1,000 euros into it or 5 grand or 10 grand or whatever it is,
Speaker: then it's kind of psychologically, your your your brain's just working differently. You're going, hang on, I'm taking a step backwards here, moving this over. So what did I you do wrong versus did you just have to one account?
Speaker: it's story It's like something needs to be fixed. If you need to dip into the profits, unless it's a big purchase that you're making an investment in a course or something, you know, but if it's something you're like, if you need to dip into that to to pay for the the regular stuff, be like, right, something's off and I either need to cut expenses or I need to bring in more money.
Speaker: Yeah, yeah, absolutely. And I always say to people as well, like, you know, you don't need to be an accountant to get stuck into this. Like, literally, I always say, know your numbers, right? It's the 1st October over today.
Speaker: i always say, to start of the month, go off to a coffee shop you usually don't go to. Get the laptop out, you know, give yourself an hour or half an hour, whatever it is, and go down to your bank's bank for the last month and go, right, where did I spend money? Do, do, do, do, do.
Speaker: Okay, am I going to spend the same amount money next month? And you'd probably say, yeah, probably. And then you go, right, well, that's like... four grand to keep the lights on. Like, that's the money you need to come in.
Speaker: So if you want to save money, you actually need four grand plus that 500 euro or plus that 1,000 euros, whatever it is, to move money to your profit account. And, like, even that approach, like, you learn so much about your business because the one thing when people start doing that is they go...
Speaker: geez, I'm paying web hosting for a website I'm not even using, or like a domain, like I didn't realize there's 50 euro going out for that, or, you know, have a Loom account that I never use, or, you know, or even sometimes people come back and they justify having them, and I'll be well when did you last use that subscription they'll like oh I haven't but I'm going to and it's like well cancel it and then use it when you need it and there's all the little ones isn't it that that they add up like they add up to a few hundred every month when you yeah yeah yeah and like what I always say is like if you get that and like multiply it by 12 like say it's 20 euro a month
Speaker: That's 240 euro in the year. And you think, right, how many customers is that a month or how many customers would that cost to cover? like So say, for example, if it's a coffee shop, I'd always say, it was 240 euro in a year that you spend on all of these subscriptions. Like how many cups of coffee is that like?
Speaker: And yeah when you start like rewiring your head like that, you start going, Jesus, like, am I actually bothered, like, giving my money away for this? Or like, that's tough to sell that amount coffee cups. And then of think, oh, wow. And like, the other thing I'd say as well is, with to know your numbers, think it's brilliant, like, have your own little spreadsheet that makes sense to you. Don't overcomplicate it But actually look on a daily basis how much it would take to break even or keep your lights on.
Speaker: And convert that then into your actual sales. If it's like maybe client calls or coffee cups or sets of counts or whatever it is that you do and think, hang on, right? That's a lot. I need to reduce this. Or it just rewires your brain that you go, right, well, how do I find another two that I break even or drive on? And I always find that's a really good example just to relate it back.
Speaker: Yeah, no that's that's really helpful. And with this like saving, not saving, yeah, the savings account, the profit account, is this the account that it is your profit, but you know that you're going have to have pay tax on it? You know what mean? So then you're not panicking a about tax. Like, so if you're a sole trader, for example, is that where your're forty percent your 40%, your 20% and your 40% tax is going to come from? Or if you're a company, your 12% corporation tax is going to come out of this account when when you get your tax bill?
Speaker: Yeah, no, absolutely. That's a good point. And sometimes people make peace with that as well. They say, right, well, I'm going to put my provision in here for my profit and my taxes just so it's out of your bank account. Because at the end of the day as well, like you look at your account, there's like seven grand in it. You're going, brilliant. We're loaded. We're going on the holiday.
Speaker: But then it's like you get your tax bill and that's 11 grand. You're going, oh, God, Jesus, I was actually off the mark there completely. So that's where you know there's a couple of different ways doing it. One would if you're a sole trader starting out, I would strongly recommend to set up a standing order of revenue. So the money's out your account completely.
Speaker: You don't even need to worry about it. And should that standing order be... About 50% of what you were you're earning a month. It actually depends because like if you're in an industry where like it's a service-based, where you don't have many overheads,
Speaker: You may be, it depends on how how how much further over you are on the and the higher rate of tax and then also what expenses you have. Because if you have like say maybe like allowable expenses, like just's a training seminar you went to or you know we have your phone bill or internet or office rent, et cetera, et cetera. It depends on how lean the business is. So I would say, and for funny if it is a question i get asked so often, it's like, how much do I need to put away for tax? And it's like, it's case by case.
Speaker: And even in that situation, it could be like, what's your marital status? Like, do you have extra tax credits? Like, are you renting? Because there's a rented tax credit now. You know, it's there there's so many moving parts. But I'd say, engage your accountant and, you know, just come up with a figure once it's consistent.
Speaker: and be putting that aside and because then at least it's gone over I know that's not answering your question because I'd say 50% is too much I'd say start with like 10 or 20% at least and but but but your accountant which will be able to work out once you can provide them with like your sales your expenses you should have a ballpark kind of idea of like what kind of taxes is you're paying yeah yeah um oh yeah because obviously you're you're only getting taxed on, like your expenses get deducted from your from from your taxable earnings. It's not right if they're if they're legitimate expenses. Regardless of whether you're a company or or a sole trader.
Speaker: Expenses are expenses, yeah? Yeah, so expenses are expenses. Now, with a sole trader, again, i know it's a lot more, say, easier to set it up and get going on it. But, like, again, another reason why your sole trade and for for profit may not be taxed at 50% is, like,
Speaker: You could have like an employment going on as well. Like you could be working somewhere part-time for like 20 grand a year or something. And like that complicates the situation or maybe you have your partner's tax credits. And yeah yeah like did did it it is a lot. I'll be honest with you If anyone has a query about this or is keeping up at night, like book in for a 15 minute hello call with me. And I should be able to give you a reasonable stab in the dark at it. Now, it's not going 100%. don't know, first of all, but I can definitely give you an educated guess on it.
Speaker: Yeah, that's really helpful. And I will share your details in the show notes so that people can click the link and they can they can book it in. And because it's hard to know. And the reason why I because like what I was told ah when I started my my business, when it when it was Soul Trader and initially was just put 50 percent by every month in a savings account. And whatever is not paid in tax, then is is a nice little lump sum to put towards your holidays or whatever. But I was working as a teacher when I first started. yeah so I was already on the higher tax bracket as it was. So initially, when I was earning fuck all for my business.
Speaker: I was revenue was taken 50 percent of it because I was already on that higher tax bracket. and And so as soon as I was earning enough, it really made sense to go to go limit a company for me. But also then I left teaching. I went a job shared, which I was still kind of tax wise. It it wasn't great for me with my my business when I was a sole trader. And then I took a career break before I actually left teaching. I took two years career break. And I was doing a few hours in the local gym, but that was obviously kind of not much more than minimum wage. So then suddenly it changed, which and yeah and I didn't have to pay as much tax. But like these things really, really stressed me out at the time. And I didn't have anyone to...
Speaker: to book in a call with. I didn't like, you know, I didn't know about you. I didn't know that these kind of services existed. And and my accountant was great for doing the numbers and, and you know, making sure everything was done legitimately.
Speaker: But it was like me, the person. There was just this and this lack of understanding and this lack of knowledge and this fear around it. And as kind of a creative person creating this business, it really like you can't be creative and in fear at the same time. It's a really, really like opposite thing.
Speaker: And even that fear creates doubt as well, because like you, it's distracting you you're just kind of back your head going, oh, geez, I have to look at that tax. What the hell is going on? And that's stuff that that's that's actually a really good example and a very common one that would have as well of your journey as an entrepreneur, Kate, that like you started off with a side hustle.
Speaker: Then you went to did it and picked up a small job on the side. And then like but what happens there is people, because they just think your tax bill is a tax bill, like they kind of go from, oh God, a real high bill. Then i'm working full time at it. And then my tax bill has gone down. And then the next year you might get a bigger bill. Like it's it's very much sort of history channel that you need to be like nerdy. I always tell people like, just check in with your account. Don't just at the moment talk about your 2025 income tax return.
Speaker: sussed them out on your 26 return and going, okay, like they they should be saying to you, oh, how's 2026 going? And like, it's pretty much like, it's not too far out of the year now. So people can have a good stab at it to say, right, oh God, it was actually great. We're up like 50 grand year on year or something. So then you go, right,
Speaker: you You may have more tax to pay. you want to put put something aside now? Do you want to like increase your standing order? Or you want putting money into pension? Or do did you want to start doing something with that before you've spent it? like Because that point in time where you're two months before your year-end, you can still do stuff versus if you're nine or 10 months after the year-end, there's like a year between that.
Speaker: And it's like... just so much more damage can be done because you've all a 2026 to deal with and then also potentially a good chunk of 27. So you just need to jump in and kind of rip off the band-aid as well and to just just judge ordo really...
Speaker: engage with the process and educate yourself and like it doesn't have to be crazy either it's like just just set yourself targets of going right well i want my accounts done early like get onto your accountant i'm sure they'd love to hear from you and say oh yeah here can i get my income tax done in february or march like and you don't have to file it then but you can be hit with the bill then then you have like seven or eight months of runway to actually to know how much yes yeah you don't have to wait till october kind of is what you're saying No, absolutely. Yeah, yelling yeah because yeah you can have it there and you can wait till the middle of November to file it. And even if it is the case, you still don't have the money. like You can kind of start build up whatever you can and then maybe put it down as a down payment for a phased payment plan revenue.
Speaker: And that's where you can put like 25% or if you need tax clearance, maybe you pay 40%. at least that's just like you're staying compliant and you're boxing clever with it instead of yeah you know just waiting to last minute get hit with a big tax bill and it's it's it they're tough conversations because nobody wants to give that that kind of news either like so yeah i would always say Be looking forward when you deal with your accountant. Don't be thinking, oh, here, how do I get off the phone or how to get out of the meeting here? Like, and you know, just pay whatever taxes to you. Like, actually proactively think, going, okay, so what can my next tax bill be? And you can start up just, like, working towards that.
Speaker: Yeah. And even just bringing it back to kind of, you know staying on top of where your business is at, like, you know, knowing at the end of each month, like having your your books and your actually myself and one of the girls in in my leader mentorship, we were talking about this the other day. And because she has she's getting all her bits ready for her her tax return. And she was like, oh, my God, I have to go through all my receipts for the whole year. and and And we were talking about how going forward now into this new year that every month, just picking a date, getting all your receipts, downloading your invoices, taking photos of your receipts and uploading them to a Google Drive folder month by month by month so that it's not a huge job then at the end of the year. Is that something that you'd kind of recommend that people do?
Speaker: Yeah, absolutely. Like there's so many different ways. Like the old school way was like someone would have a drawer and a black sack and they just sit and throw everything in and throughout the year and they send it in to us.
Speaker: And you have to go through it. Yeah, no, I remember there was one case where like i was dealing with this guy and he actually said to me on the phone, oh, like I have a drawer to keep everything in, I'll send it into you. And I was like okay, grand, yeah. And like, literally about two hours later, like a taxi man arrived at reception with like a drawer and a black sack full of envelopes and full of like receipts and everything. And I was like, wow, he actually took the drawer out of his desk.
Speaker: put it in a black sack and gave it the taxes he had to bring. and then he rang me a week later. He goes, are you getting on with that? was like, oh, no, no, I got your stuff. Like, yeah, we're going work on it. He goes, well, could please just send the drawer back. The wife is going mad here. I was like, holy butter of God. Like, yeah, but it's whatever system works for you. I think the Google Drive thing is great.
Speaker: What some people do is they just set up like even a Gmail address and they just take photos and email stuff into that as well. So they have it saved somewhere. Yeah. What I do actually is with my Gmail. So like, you know, a lot of my my invoices and my subscriptions are online. So I actually just have like a folder. So when it comes in, I just send it to the the folder on Gmail. So then when and when Jenny is looking for my and for my VAT return, then I literally just, like I can go into that folder and I can see the dates and then I'll, you know, either download the PDFs from the, and if there's no PDF on the email, I'll just take a photo of it and then I'll upload the photo of it and to a Google Drive folder so that all the receipts are kind of easy to follow. And then, you know, they have some physical ones like, you know, my I have a company car, so like the diesel or whatever, you know, that kind of stuff. Then I just take photos of it and upload it. Yeah.
Speaker: So it's it's just really about finding system that works for you then, is it? And trying to make the anxiety at the end of the year less. Yeah, like it's... I always think it it's like you're you're trying to catch butterflies or something like that. You can't just wake up one day and say, I want a little butterfly collection.
Speaker: You have to constantly be going out and like capturing them and the storing them. like So I think... But I think, you know, that accountants forget that some of us people, we don't do that. And then it comes to the end of the year and we're like, shit. And you're like, oh, you sent it in. And we're like...
Speaker: I don't remember what I did in March, 2025. I know, I know. i take I think absolutely embrace technology as much as you can, because yeah at least you have a system in your head you're going, right, I have all my receipts somewhere, like ah a Google Drive, and it's it's sitting there, which is amazing. and I also think another tip is like when we go to do a set of accounts, we'll get your bank statements,
Speaker: your purchases and then your sales, right? So yeah they're the three main pillars in the set of accounts. So what we would do is we would like post all the sales, post all the purchases, then we reconcile the bank against these transactions, right?
Speaker: So my other bit of advice there is if you use one bank account for all your expenditure, So if you use your card or buy things online, e etc., like use the business account because then at least for us, it's a second source of information that we go, right, well, you know, what did you get in Harvey Norman for like €620? And then you might think, oh, God, yeah, I bought like a computer screen or laptop online or a coffee machine. Yeah, brilliant.
Speaker: I have the email here and you send it on. So it just helps us actually verify it because I'd always use the bank statement as much as possible as the Bible.
Speaker: And then we reference it back then with going, okay, well, where are these receipts? Where is this? Where is that? And it just really, like if you use it right, like it's took your whole, it tells so much about your history the business in 12 months. Yeah. yeah At the end of the day, it's like, you know, obviously money coming in should all hit that account and then money going out as well. So I think it's... sam you know what i used to Do you know what I used to feel when i first started out? I used to feel like my accountant, like i I was really like embarrassed about my expenses or, you know, being like, oh, my God, they're going to think that my expenses are so high and my like that I'm doing these crazy things or that they'll question my, you know, but what my expenses. And like, it was nearly like I felt like I was going to get in trouble or something. And it was a really weird mindset that I just of obviously just a real amateur
Speaker: business owner mindset. And then it took me a long time to realize, i'm like, oh, no, they're actually just trying to help me, first of all, make sure that I'm doing everything legally and also help me get some money back on that, which I know we're going to talk about in a minute. But, you know, ah so and then it was it it took me a couple of years to really just be like, OK, Kate, you don't need to be filled with anxiety. No one's judging you. You know, lots of businesses sometimes make losses some months and, you know, or not much profit. It's normal. The accountants are looking at the numbers and, you know, it's you're not getting in trouble by anyone.
Speaker: No, no, absolutely. And like the amount of people would like kind of have that mindset, it's crazy. Like, and, you know, I suppose sometimes they can come back and ask questions and they're going, oh, God, right. Why are you asking this or whatever? But like.
Speaker: I'd say, so so so one thing we always get asked about expenses is like, what is an allowable expense for my business? Because I was talking to Paddy in the pub or talking to Sarah in the coffee shop and she dary said they're pulling through X, Y, Yeah.
Speaker: yeah All businesses are different. It's like cars, right? If you walk out to the road there now, you see like Volkswagen Golf, a Mercedes, a Jeep, a truck, a motorbike. They're all on the road going somewhere, but they're all different and they need to be serviced, et cetera, differently. So, you know, I would say absolutely, like take what you hear with friends and everything, like with a pinch of salt and think, okay, well, do you absolutely go back and ask your accountant about it?
Speaker: but don't be banking on it that you can do it. What revenue say and their guidance and expenses is if an expense is wholly and exclusively for your trade, it's allowable.
Speaker: So what that mean? You need a pen for work, that's an expense. You need paper, a laptop, a microphone, a printer, like a mobile phone, like absolutely key nowadays, they're all allowable.
Speaker: Things like, say, a television screen, like you may need that for your office because it's for displays or it's for a meeting room or, you know, Zoom calls or if you're a coach, maybe you do workouts need able to see the screen, everybody on it or whatever it is.
Speaker: Going out buying 10 televisions for a small business like that is not for the business. like it's yeah It can be great as well, people thinking, oh, yeah, sure, I'll just claim the Vapak and all all the TVs in the house. And, you know, sure, I'll get the kids a laptop as well or an iPad and brilliant happy days. and But when you're actually sitting in revenues office and you have an audit,
Speaker: that doesn't seem like such a great idea. You say, oh, sure, i need, like, the laptops for work. And they're like, well, you're the only employee in in the business and we've already gone through all this. And it's a different kind of like, set up then. You're going, right, ooh, maybe you do have something there.
Speaker: But I would think, like, with an air of caution, like, don't go, don't be too optimistic with it or too extravagant with it. Like, you know, if you think, like like, you might need a comfortable chair in your office, if it's a home office a nice desk or et cetera. But, like,
Speaker: Yeah, like it has, there is a line there. You don't want to take the piss on it because. Yeah, like you can't furnish your whole sitting room on your business, or but you might be able to get an armchair if it's in your office and it's relevant to making content or whatever it is or are or appointments or whatever.
Speaker: Yeah, yeah. or Or even if you have your own studio at home, like, you know, you need it to be painted. You need like your equipment there. You need lighting, etc. Like you probably do need a nice chair. You need a nice kind of like bookcase, whatever else is like.
Speaker: That's all you have to treat it seriously. Like, and that's what and I think there's two ends of the spectrum, isn't it? There's people starting out who don't know like all of these things that we and I think we should talk about, you know, things that people might know that they can actually expense. yeah regardless whether they're sole trader or or and limited company because one of the questions i got was i was saying no you can expense this um with one of my girls and she was like but is that not if you're just a limited company so that is one question yeah but just on my point there that we've got some people who genuinely don't know what they can expense and then there's other people a bit like myself who are a bit like we'll try and expense everything and then the accountant has to be like kate
Speaker: your runners are not a business expense. You know what i mean? That kind of... Yeah, yeah. and Where's the balance, like? and And that's actually a good example, clothing. Like, it's... Even people in the social media world, they think, oh, yeah, right, I i need clothing or i need to look a certain way. Or even even people in the fitness world as well are going, right, I need, like, runners, I need gym gear, blah, blah, blah. But, like,
Speaker: Because there's a thing called duality of purpose, there's dual purpose to it. You can't actually claim it unless it's gym gear and you get your logo and your branding on it. Then it is allowable. So yeah that's kind of like the mindset that you need. like you know so and If it came to an audit, would you would they be like, show me this clothing? Or could you just have like a bill for the logo company and a bill for Nike? Or will they be like...
Speaker: Looking through your social media to see the branded stuff. Yeah, yeah, yeah. But potentially, like, it it depends on how much you do it. Like, if, yeah, like, there's one side of it. Like, if you say, right, there's my invoice from Nike, or here's my receipt from, like, JD Sports, and then here's my, you know, invoice for the embroidery company. But I suppose, like, The invoice or the receipt of the embroidery company would say how many items they did.
Speaker: So yeah unless you're going down just like giving them money just for the sake of it, like, or you're getting them to do it on the inside of it or something, I don't know, like, but, no, sorry, it has to be clearly visible. I did not say to do it on the inside, actually, hang on. But but but ah but you sure, if someone was to do that, you might as well just pay for it with your wages. You know what mean? The extra cost of to of doing that for no reason defeats the purpose. yeah yeah absolutely Absolutely. Yeah. Like it's, what's the point to that then? Like, so yeah it makes no I have seen all sorts, like for people get like their logo on runners and everything like that to, to get that over the line. But it's like, do you read the, and again, I suppose it comes back to the duality of purpose is like, if you have your logo on your stuff or your runners, whatever else is,
Speaker: that is actually putting me in work in work mode or whatever. like You're not going to probably be more like you won't wear that socially or on a holiday or whatever else it is. Now, unless you're really proud of your business, and some people are, you have to weaponize your own brand. like so yeah And if you're walking around marketing your stuff and you are wearing your branded stuff, then it it is advertising. Yeah, yeah. And I suppose as well, like just to come back to something else you'd mentioned there about the limited company question, like I probably get asked, is should I set up as a sole trader or a limited company about once a week? And like some of the reasons that some people think out there, they have this conception that a limited company is much better or it's it's much more efficient than sole trader. And it's actually not all like always the case. I'd always say, like
Speaker: You know, if you're if you're setting out, setting up for business, like just set up as a sole trader first, see if it works, because literally takes about half an hour or an hour to get set up, but like revenue, Ross, registering the business, getting a bank account, whatever else it is, like,
Speaker: that's how long it takes and if it doesn't work out email me you can jump on to register for revenue for income tax once all your income tax returns are to date and filed for that period but then that's it you're done like if you go off setting up a company like by the time you pay for the company setup get the rbo done the first annual return done and hopefully not miss any returns in the first 18 months you know you're probably talking about seven or eight hundred euros to a brand like just for those items because there's a lot there but then for you to close down that company to strike it off which basically it's a long drawn out process and you know i'd say it's probably a 50 50 if people even engage with that process of closing it down the right way and
Speaker: You know, ah we we've had cases before people say, I hear a feck it like I'm a trap company never made me one year. I'm sick of it. Like, they just don't do anything and they missed their filing deadline with the CRO. And then it's an absolute nightmare because then you a point in time may come up where like you may be trying to open a bank account or go for a mortgage or you know you are you've been offered a position in a company maybe that you're working in with equity or directorship and then they look you up in the cro and say oh hang on like john didn't close in this company the right way and you let go late and
Speaker: you know because being a director in a company is quite a serious thing it's like having a driver's license like you're just you sitting behind the wheel of a car like if you like run someone over or you drive into a wall or something like that like there's consequences so yeah you know just just like that like a limited company is like a person that can't do anything for themselves but the directors run it for them and they've been given this like really low tax rate so you actually have to be very familiar with company law and i always say to people there should only be like you know ah they did a driver's test for businesses like you should have to go do a license or some sort of like you know so small tests and passes pass a certain percentage of it before they actually let you open up a business because people can get them themselves into awful trouble and it i know we opened it with uh with people struggling or getting into debt like that's one example and
Speaker: You know, that could follow you around to have an impact on and your your life, your mental health, your family, your your personal situation, everything like it's it's crazy. But it is funny as well. Like people will often come to me and like, oh, yeah, I'm working for this company as a contractor. and they They ask me for my company number, so i need to set up a company. And i'm like, no, no, you're a sole trader.
Speaker: That's all it is. And just tell them, like just just just just be confident. Say, look, no, I am a sole trader. I'm here. I'm proud of a sole trader. I'm not a company because companies cost a lot of money to run as well. So it doesn't make sense all the time to just run out and set up a company. like Yeah.
Speaker: So like I think I remember original advice before I became a little limited company was until you're earning your company's earning about 100 grand a year, there's not really any point.
Speaker: Is that a good kind of marker of when you should consider it? Absolutely. I'd say. but when In a company turnover, like you reach a point where you don't need to take out all the money to live.
Speaker: So say, for example, if you your your sales are 100 grand and you can live off of say, a 60 grand salary from that company, which is probably, I'd say about three and a half grand net a month in the salary term. and So if if you if that's the kind of thing where you can pay your bills, keep all the lights on, shopping, go on a holiday, brilliant. Like there's no point to take that over 40 grand out, because then you're going to be paying 20 grand of tax for what?
Speaker: I'd rather see you go back to that point where, you know, pensions, and investments, whatever else it is, to have that 40 grand working for you rather than just taking it out. now And that's where it becomes tax efficient to become a company, is it? Exactly, yeah. Whereas if you think, oh God, I need 100 grand to live.
Speaker: I'd say you need to be a sole trader because you're going to be paying for payroll, corporation tax, CRO filings, everything else like that. VAT. Oh, no, you still have VAT. You still have VAT. You don't have to hook Tara, fortunately. Yeah, we all, yeah. But I think that was a real slap in the face for me. Like when I kind of, you know, I'm so proud of how well the business was growing it was brilliant was time to...
Speaker: turn it into a limited company and then all the costs the hidden costs you know the accountancy fees i got that year and not not from you but it was it was a lot there was a lot work done that year like i'm not saying that it wasn't that you know but that's how much it it cost to to get vat registered to the set of the company there was there was lots of different things and there was employees you know and it was there was a lot of change very quick a lot of a lot of admin to do it was really expensive and i think With that, yes, with the accountancy bill, that was a real like, oh, my God, that cost me so much. And I need now need to pay this back over the next year. Like, and thankfully, yeah they were really, really kind and understanding and flexible about the payment of it. And and that it was like I had reached this threshold where I was making I could make a proper living off of what I was doing and I could employ others. And I had goals of growing. And then suddenly that came in and I was like, sorry, what? you're taking, you're taking 23, well, 13.5 or 23% of everything that I earn.
Speaker: ah Like, and as it's kind of like you take it, it knocks you back a few steps, doesn't it? And then it's like, i either have to decidedly earn earn less or I have to push forward and earn more.
Speaker: Because like for me, like working with clients, health and fitness clients, I wasn't suddenly going to say to them for their monthly subscriptions, they're paying 99 a month or 199 a month, depending on tier. I'm not going to say to them, oh, now I'm VAT registered. You need to pay an extra.
Speaker: Like I had to absorb that. Yeah. and And I know some companies don't have to. They can just add the VAT on afterwards. But for me, I had to absorb that. So financially... Well, ethically for me, I had to absorb it. I know some some of coaches might argue you could have just said plus VAT. I couldn't do that to my clients that were loyal with me. And yeah it was already an expense to them in their lifestyle. You know, I always think it's about that as well. like Whenever you're selling to the public and you have to it come to the point where you need to register for VAT, like.
Speaker: You need to have a good hard think about it. And like, I would just like jump on and register for VAT. Like, cause there's situations we've had before, say like maybe clients in the beauty industry or that, where like we actually crunch the numbers on it and we go, okay, so yeah, you're at the VAT threshold 42 grand a
Speaker: And we might say, well, if you do actually register for VAT, it's going to cost you about six or seven grand here. Like, you know, and at that point, I kind of say to as well, like we go back to how much is a treatment, you know, whatever else. yeah and we kind of say, you'd be better off doing four days a week And taking a day off and you'd have more money than you would registering for VAT. Like as in, dial down the sales to like 40 grand or whatever it is. and you Don't go above. Do not take any more on.
Speaker: Because unless now you think, yeah, you're going to drive on and go 60, 70 grand.
Speaker: Then it makes sense. And like, you can kind of, I think another thing sometimes people do is they kind of go like a hybrid where like they put their prices up slightly. And then it so they take a haircut and the client takes a haircut. Now, it's just one way of like kind of mitigating it. And then obviously any new clients come in,
Speaker: just obviously you'll you'll have that price there like with VAT or whatever way you want to do it. At least it doesn't hit you as much because it can be a big sting and like, you know, but what what's the ticket it's it's crazy. Like you go out, you've you've you're grown your business and because you hit a certain threshold, you're going to get absolutely hammered in taxes here and now. Now, do think like you have to be efficient when you're registered for VAT. Like you need to put in your phone bill, get the VAT back on it.
Speaker: If you have a laptop, diesel, whatever it is, like, you know once they're allowable expenses like you have to be putting it in you can't be leaving in the buying because it's too much money you like Yeah, and I think that's an important point as well, yeah that with paying VAT for every purchase that you make, if there's VAT on it, that comes off your VAT bill. And I think some people don't realize that. So, like, keeping the receipts, getting the receipts, keeping the invoices, and, yeah, making sure that that you get those submitted, like, is when for your VAT returns is so important. And and I think that's why your your Google Drive idea is brilliant, because, like, g literally...
Speaker: If you get a revenue audit, what happens is if they ask to see, like, say, okay, we'll go back to the Harvey Norman example again like 600 quid for a laptop.
Speaker: If they look at that and say, right, well, show them invoice first. And you can't show them a receipt or invoice to be like, no, disallow that. So all of a sudden, any VAT you put claim in for,
Speaker: will be reversed out. So there could be like a hundred euro VAT or something on that. And all of a sudden, because you can't produce the receipt, they're not allowing it because they might say, well, how did we not know he didn't buy a washing machine or he didn't buy a bed or a couch or something like that? Because all they see in their bank is Harvey Norman. So like, that's how valuable receipts are to you. Like, I always say it's like the coupon system. Like, it's like literally, this is as good as money, like, because it could cost you that.
Speaker: And what happens in an audit? So just say you get audited by, because this is also like every small business owner's worst fear of getting audited, there is And let's just say, you know, over the years, I've managed to get a few pairs of runners and a hoodie and stuff through that maybe shouldn't have gotten through, but they got through and, you know, and...
Speaker: Just say then I had bought a laptop, you know, I bought a MacBook for 1500 or two grand or whatever, and I lost the receipt. OK, and then I was audited. And what like do you have to pay you obviously have to pay back? Is that what happens? You pay back plus fines, whatever you whatever it was allowed that they decide is is not allowed. You have to pay it back plus a fine. Is that how it works? So there's a couple of different knock on effects to it, right? So literally say, let's say with the MacBook there, OK?
Speaker: You have that and, you know, initially you go the interviewer, you send it on and like, oh, we're missing these. We've requested them. So you try to go to Apple or wherever you bought from. Look, can you please send me copy the receipt?
Speaker: And that's why sometimes buying stuff online is very good because your email the receipt or you have some sort of digital yeah record just search your emails you'll find it yeah yeah yeah or or even going into harvey norman like i don't know if ever noticed but they always ask you for your mobile number or someone brings it through and if you buy something new they'll just search you or they have you on the computer yeah Yeah, so usually date date did they can dig out something and that that's really helpful then as well. I know it's annoying as time and they think you're going to be sent promotional stuff or whatever, but like it is really handy like that. So I'd absolutely do your utmost to get those receipts. Now, again, we don't live in a perfect world. Receipts go missing.
Speaker: Like so then unfortunately, yes, like if you have a big fat claim on, they may reverse it out. So you'd have to like repay that fat amount. And then also and your profit has been affected then as well because they might say, right, well, you 600 euro in here for an expense. But if we're not allowing that, that means your corporation tax has gone up now as well because your profit is now 600 euro higher.
Speaker: So that's where it they kind of like it's not just now. It depends on what tax sets you're looking at as well. But, you know, if if they find you're substantial enough going on your back returns, they're going to say, well, hang on.
Speaker: there's no way your corporation tax or income tax is going to right now because this is so fundamentally wrong here so that's why it's so important to kind of engage your revenue engage your accountant get everything there like so i suppose really like just even quick whistle stop run through of a revenue or what it looks like is number one you'll get a letter in the post and it'll be notification of revenue or three or four weeks time on what tax head they're looking for A lot of the time now they actually do desk audits where they just ask you send in all the stuff. So you need to put it all together, send it in. They do still do interviews where they want actually interview you. So you'll have to go out, you'll have present your books and records there the meeting as well. So it'll be your bank statements, your purchase invoices and your sales invoices, but they need to be in order. So basically, you'll go away. Now, if you can't make it, you need to contact them while in advance. Don't be ringing them tomorrow and going, yeah, can't make it there, stuck in traffic or something like that.
Speaker: But engage your accountant as well. Have a good review the stuff. like Would your accountant help you prepare for this if if this happens? Absolutely. Now, it could be a different service like because yeah depending on how much work it is or if the client did their own VAT returns or whatever else it is, then you may need to redo them or have a look at them. Yeah. no So it could be it could be billable hours. like It would be, yeah of course. Yeah, absolutely. There's time there. i am Now, the one thing about it is, well as well, you have an opportunity at that point to make a prompted phone for disclosure, which is a big word, but basically... The confession, isn't it? Yeah, absolutely. Yeah, yeah. So it's kind of like you can go in beforehand say, oh, God, sorry, we were looking at it there and we shouldn't have actually put through the diesel for my partner's car.
Speaker: It just slipped through, went through, blah, blah, blah. and Or maybe my partner's mobile phone, et cetera. So that's your kind of time to send it on to them and say, right, well, we've worked it out. There's another three grand attacks here. We've put on 10% for late fee and another 10% for us engaging with the system, right?
Speaker: And you send it on. so Sometimes once they don't find anything else more beyond that, they'll let you off or they'll say, okay, that's grand. It obviously pays the money. But yeah it was a case of you go the other extreme. And they have these categories, right? If you go the other extreme, go, I know we're grand. Jesus, you're like, there's something there. You and just lie them, like, go, no, no, no, that's all business travel. No, there's absolutely no personal. and Then, you know, you're not even put through their sales invoices or just crazy stuff or you don't present the stuff like you don't cooperate with them.
Speaker: Then what they can do is they go through the stuff and they have serious powers. Like if you don't engage them, they can get onto your bank and ask for copies your bank statements and they will repair their own accounts and what they think.
Speaker: which is crazy but i've seen it done before right and and literally they will come up with a tax figure and say well this is what you owe us so you don't even get a chance to like you think you're being smart by saying oh i don't have anything but they actually go out do it and then they can actually hit you up with a hundred percent penalty on that Oh wow. of Which if they come up with like a 40 grand bill, they could go 40 grand again. It is the extreme cases, right? yeah literally You're just taking the piss. But that's a massive bill then that like can ruin you. You close your business down.
Speaker: That's the scary bit. yeah Yeah, but I think the thing that's that's important to to kind of say is just keeping on top of things. Don't be ridiculous. Don't be freaking out if the smallest little thing might have gone through that shouldn't have. It's not going to ruin you. But try and be on top of things as much as possible. And that if you're a small business, you know, not to be that afraid of an audit, that's it's probably fine.
Speaker: Yeah, no, like, in fairness, businesses will get them at some stage. Like, if you put in a big fat refund, like, if you have 10 or 20 grand coming back, they may send you, like, a desk or a query, which are quite common. Like, it's, like, send me your 10 large sales invoices, 10 large purchase invoices. They'll look through it, and they're just making sure that everything stacks up. The other thing, as well, that revenue can do now that they've actually started doing a lot more proactively is they might put an attachment on someone's bank account. And this I used to only ever see being done for, like, clients with, like,
Speaker: 50 or 60 grand plus that's due right but this is where they literally cheap go into the bank and they freeze your bank account and then any money that goes in they take it out ah oh my god yeah yeah so the impact on this is crazy because it's like g literally you can't pay your wages you can't pay your suppliers And then they possibly just clear out your bank account. they all do they Is this the kind of thing they do if you're just really not engaging? Is is that what you're saying? they they They profile it. Like I've seen this done for three grand the last 12 months, like which you never would have. Like you would have like a share setter or something like that. Like it's.
Speaker: You know, it's it's it's crazy, but they just have so much technology now and they've obviously some profile that they do. Now, the client in that case lost use their account for like a week, but like it was too late. They had it on before they even realized it because by the time the letter came, it was already on it. The staff were already going, oh, you haven't been paid with hell's going on. And, you know, that's a different headache in itself. Like, but again,
Speaker: Engage your revenue, pay your taxes, and but but but be efficient as well. Like like work with your accountant to make sure that your approach is the right one. I know it may not be what you want to hear at this point in time, but just make sure that it is actually what you want to do. Like, and you know, you're you're not you don't have um ah and an exposure on it.
Speaker: yeah yeah i feel like we frightened the shit out of everyone from forever starting a business no i'm closing my business tomorrow and i'm gonna do it properly no i'm messing but i think um i think but i think it's it's really helpful to to know these things and to know that it's just simple practices put in place and when i think back to when i started my biggest expense for a long time was my accountant but it was the most important expense because then it wasn't a case that I was earning all this money that I thought I had and didn't know what to do with it. And all all this fear and anxiety is, you know, if anyone's listening that you're just starting out, and but you're taking in a bit of money, just get an accountant. Your your accountancy bill won't be that high when you're starting now because there won't be that much to do. And just start, like start right from now. And if you're listening and you...
Speaker: haven't really been on top of things i feel like it can all that can always be fixed can't it with with the right person i always i remember there was one client that came in to me about four or five years ago and he literally just had a stack of revenue letters he goes listen i'm putting the hands up i just didn't engage any this account wasn't like on top of it i remember we're in the boardroom here and he had nearly the whole table covered and he was sweating and i was like look work around step by step we'll get onto them tell them we're taking over we'll start working on this stuff like but buy time and then we'll do case by case the the day if you don't the money we need a payment plan like you're trying to pay your taxes here you're trying to like actually sort them out so like i think the worst thing is putting your head in the sand that's the most dangerous thing you can do um
Speaker: I think definitely engage with your accountant as well. So so we actually have, there's a new thing we brought out. It's like an eight week profit challenge, which it's it's it's really good. Like you don't even need to be a client the office here. You can just jump onto our page and book in for it.
Speaker: But like I meet someone four times over eight weeks and I'll design a cashflow with you. So you know your numbers, you know what your keeping the lights on money is. You know what, you know, your tax amounts are coming up, like, say, your corporate tax or income tax, and you can kind of see the dip and it goes back up. And it's actually good. I actually got the idea from fitness industry as well of, like, say, weight loss challenges and stuff like that. Because money is a bit like calories, you know what I mean? It is, yeah, yeah, yeah. And it's good because what we do then is like we actually set targets for a month and then the start of the next month will actually be going, right, well, let's see if we can do this. Like, can we back up what we're saying here? And like, you know, it's crazy because like lot of time clients don't even like,
Speaker: think of things like that i like going well you know how many haircuts is it to break even or how many like members in the gym is it to break even or cups of coffee to break even e etc but like they actually just start thinking differently then and you know we've had like i think a 90 plus probably success rate of people actually hitting their figures month on month then that like we know right if you can do that for one month probably do it for 12 months. that like You have your new model it that's leaner and meaner.
Speaker: And then you can start thinking going, right, well, you know, if I do this for the next eight months, I'll have two or three months of cash flow sitting in the bank or whatever amount it is that you go, right, well, now I can reinvest in things. Now I can go on that training course. Now I can go to that conference in London or... Instead of just going, oh God, I need to go to that conference in London or New York to like upskill myself do more sales. But you actually know comfortably you can afford it then.
Speaker: Yeah. And you can actually drive on with the business or reinvest or even just start putting money into an investment account or something like that. that You know, it just gives you that. I always say there's three startup stages in the business. like The easy one is getting going. like Once you block out your ears of everyone telling you not to do it and you can get up and going, like that's hard. But then the next one is starting up making a profit.
Speaker: And yeah the amount of people that stay busy and duckling and or duckling and dying with paying wages or whatever else it is, like a lot of them are just one like COVID or recession away from folding up. Like, and if you don't have that, you know, profitability in every single month, whatever it is, two or 300 quid, even like a month, like there's some building up in the background there for you, you know you're never going to go on to the next stage, which is like starting up to invest and,
Speaker: like reinvest or making profits in the business where are you build yeah where you're going to build your proper wealth and yeah yeah and and that's the three to five-year plan because nobody wants to work forever like you want kind of that thing of like in the back you like you're the only one that in the business a lot of time where you're the main person like and people love you but you can't be like paying everyone else not getting paid yourself or have some sort of bigger plan here it to be like right well in five years time i'd love an investment property or a nice big pension pot that you know i can actually retire maybe sell the business and i'm not dependent on it like so John, there's so much more I could talk to you about. I think we might have to part two another time. Part two, yeah. could have Part two coming in this exciting of now stuff that we need to know as business owners. Because like we really it like I didn't get a chance to ask you about salaries, hiring, wages, hidden costs, and wealth and and investment and stuff. So we might do another one on that again. no no absolutely. Love to, yeah.
Speaker: But so the best place for people to reach you if they want to inquire about your challenge, whether they'd like to book a call, maybe and book in with you guys to perhaps work with you and is your website, your Instagram. wheres what What would you like to share? on the show so So what we always find is the best is the Instagram page. So we have the link with our stand store on there.
Speaker: So yeah you can basically just click on the link in our bio on our Instagram page and you can book in for the 15 minute hello call. And then you can also book in for the eight week profit challenge on that as well.
Speaker: Okay, perfect. So that is startupaccountant.ie on Instagram, isn't it? Exactly, startupaccountant.ie on Instagram, yeah. Yeah, and we'll we'll link that in the show notes. So they'll be able to click link in bio to access anything that they want from that. Last question, right before we finish up, a really quick fire thing. Oh yeah.
Speaker: Off the top of your head, expenses that people people can expense that they don't realize they can expense. I'd say things like, I don't know, maybe like a coffee machine or something like that for your office and coffee pods. Like that's always kind of a bit of a win. Like, no, you can't take the pisses if you can, but like, you know, it's you need coffee for like meetings for, you know, for canteen, et cetera, et cetera. So that's always good thing. And I think as well, just another tip is like you you mentioned like fuel receipts. Like I think getting a fuel card at Apple Green or Circle K or whatever, it just cuts down on the volume.
Speaker: And it also gives you like 30 days to pay for your fuel, which is really good because you just pay it at the end of the month then. And and i say ti that's always really, really good. like Yeah. Yeah. Fuel and coffee. And actually, I always see that as a win when I'm like when I'm, you know, ordering my Nespresso and I'm like, yes, my coffee, ah my office coffee machine. Yeah. for It's always such a win. Phone bill as well. Or a certain percentage of certain certain percentage of it anyway, phone bill. Absolutely. Like, look, I think, you know, for phones, unfortunately, have a personal element. So I would say 90 percent of your phone bill. Yeah. Putting that through, getting the va back on it like.
Speaker: Honestly, you know if you are a service business and you don't sell a product, the VAT bills can really stack up and it can be very tough, but like definitely make sure you expense as much as you possibly can. If it's like your phone bill, your laptop, Stripe actually.
Speaker: If you collect money via Stripe, there's often a lot of hidden VAD in there because what you get on Stripe versus what gets loaded is your account. So log into Stripe and make sure you get those invoices because if you think about it, your sales are probably one of the biggest numbers in your accounts and 1% of that could be very big. So the VAD on that could be huge. So it's one thing people to often forget about it's very hard to find on your Stripe account for invoices, but absolutely jump in and get them. That's usually a very good quick win for people.
Speaker: Yeah. John, thank you so much. we've We've covered so much and it's been really helpful. And i'd like my purpose for this conversation really is to just ask what was to ask questions that I always wanted to know the answers to and found it really hard to find the answers. And I hope that people are feeling a little bit clearer and that we've given them an avenue. to being able to have a conversation with you about their business and to be able to help them get clearer on their numbers and just experience that weight lifted off their shoulders that I have been able to experience, which took a while. and But yeah, so if you're bogged down with numbers, I think, you know, just know that there is there there is ah there's a way through it. Thanks a little Kate. Yeah. And even anyone that wants to have a look like our Instagram page is lots of reels there. Just little info tips and stuff like that. So absolutely jump on there. And thanks much for for having me on Kate. Really enjoyed that. Thank you.
Speaker: Thank you so much for listening to this episode. And as always, if you enjoyed it, please do share it with your friends and your followers in your WhatsApp groups, on your stories. If you do tag me at Kate Hamilton Health. and at Kate Hamilton Business, and do share the episode with anyone that you think it may help.
Speaker: Also, if you haven't yet, please do subscribe to the podcast. This makes such a difference in growing it. These little things of sharing it with people who need it, subscribing, and and I really, really appreciate and your help and your support as I continue to grow this.
Speaker: If you are looking for support with your health and your fitness goals and you want a long term sustainable approach that is realistic and science backed, this is exactly what we do inside my Nourish Her health and fitness coaching.
Speaker: If you're looking for support while you're building your business and you want to do it in a profitable way that doesn't cost you your health and your freedom, this is exactly what I do in my Lead Her business mentorship.
Speaker: I've shared links to both in the show notes. So if you're interested, have a click, have a read, reach out to me. I'm happy to answer any of your questions. And I hope you have a great day and I will see you on the next episode.
