Why back-ups should be front of mind

It may be the end of a long day, but the inconvenience of backing up your files is nothing compared to the problems that can result from lost or corrupted data.

How often do you back up your Sage data? What if I said you really ought to be doing it every time you use the package? 

It may sound like overkill but, in the business world, your accounts information is just too important for you to sit back and cross your fingers. Once you get into a routine, you’ll probably find that the back-up process isn’t really that arduous at all.

A common issue is that data can become corrupted over time. Errors creep in. At some point, you’re likely to recognise the problem, but you then need to be able to return to the last ‘clean’ files. Although Sage has a special department which can try to resolve corrupted data, there are no guarantees and the process could cost you significant sums of money.

If you’ve been backing data up, you just need to keep reverting until you reach the point where the files are without errors. At least you then have a starting point for reconstructing your figures and don’t need to begin again from scratch.

Another thing worth bearing in mind is that Sage will prompt you to conduct a data check when you back up. We strongly recommend that you do this, as you get a snapshot of the data integrity and the system will highlight any potential problems. There’s not much point, after all, in backing up data which is already problematic.

So what role should accountants play in all this? It’s certainly true that when there’s a crisis, clients will often go to their professional advisers and ask whether they have kept their own back-up. You may be lucky, but the reality is there’s no obligation for the firm you retain to be doing this kind of work on your behalf. 

Our advice is therefore to back up to a memory stick, external hard drive or to a server. And once you’ve completed your back up, it’s always worth browsing to the destination and checking the files really are there! You can even try restoring them if you want absolute peace of mind, just to make sure that nothing would go wrong in the event that you needed to re-import them in an emergency. 

Increasingly, of course, there are more options to back up in the cloud, via services such as Google Drive and Dropbox. While this is undoubtedly useful, it may be that you’ll feel most comfortable having the data copied locally too. In the world of IT, a belt and braces approach is almost certainly best.

Don’t let customer debt get you down

You've identified a potential bad debt. You've sent the friendly reminder, the follow up letter seven days later. You've then phoned two or three times and sent a final notice. Still no joy. Where does it go from here?

It’s a familiar scenario for lots of business people. What seems like a slightly overdue payment is starting to turn into a troublesome debt. You don't particularly want to start formal legal proceedings, as they've been a customer for some years but you're getting increasingly frustrated. 

The phone rings. It’s the customer telling you about their cash flow problems. Things will apparently be resolved next week, so you agree to give them more time. But next week rolls around… nothing. The following week... still nothing.

You are now getting increasingly worried. You might be a key supplier and of course you could place their account on hold, but that could make the situation worse and actually reduce the prospect of payment. What you need is for the customer to engage with you. 

A good first step in this scenario is to speak to your accountant. If they are not themselves an insolvency practitioner, the chances are they will have a good working relationship with one. When they are instructed by a creditor, they will write to the debtor to advise that they have been consulted. The message is usually that failure to either make payment, or provide an acceptable and deliverable payment plan, may result in the creditor taking matters to the next stage, which could ultimately be an insolvency event.

By issuing an unambiguous statement of intent, you make your position clear to the debtor and in doing so you'll invariably find they'll try to prioritise payments to you.

The involvement of a third party in these circumstances will often produce the desired result. If not, then an assessment would have to be made to ascertain whether it's financially viable to pursue matters further.

If you find yourself in this situation and would like to discuss your options, the best thing is to contact your accountant initially. Appropriate action can then be advised on a case-by-case basis.

A new start with the one-stop shop

VAT rules changed on 1st January this year and there are important implications for businesses supplying digital services to consumers outside the UK. DNG Dove Naish’s Business Edge Manager, ROB BURNELL, brings us up to date.

 

As part of a strategy to create a level playing field across Europe, rules about VAT on digital services have recently changed. 

 

Instead of accounting for VAT in this country when selling to consumers, you need to account for it in the country the customer is based. And while in the UK there’s generally no obligation to register for VAT unless your turnover is £81k or above, there is no lower threshold when you’re supplying services to consumers in another EU member state.

 

The change has led to a considerable amount of commentary on social media, particularly as many people thought that they might need to account for VAT on everything they sold, just because of one or two incidental sales of digital services supplied overseas. This isn’t, in fact, the case. 

 

It’s true that a UK VAT registration number will be needed, as this allows you to sign up for the new VAT Mini One Stop Shop (VAT MOSS) platform. But once you’re on the VAT MOSS system, you can account for the tax in any European country via one return and you don’t need to pay VAT on sales within the UK unless you go over the £81k turnover figure.

 

A statement was issued by HMRC in December 2014, attempting to make the situation crystal clear:

 

“If you make taxable supplies of digital services to customers in other EU member states, and your UK taxable turnover is below the UK VAT registration threshold, you may use the VAT MOSS to account for the VAT due in other EU member states but you do not need to account for and pay VAT on sales to your UK customers.”

 

It’s important to remember that the new rules only apply if your services are being bought by consumers. There are different regulations in place to account for VAT in business-to-business transactions.

 

The term ‘digital services’ is obviously fairly broad and covers everything from telecommunications and broadcasting and e-services. It’s the latter category that is perhaps most likely to affect smaller businesses, which may be involved in selling apps, music downloads, e-books and games. (The definition of an e-service is one which is fully automated and requires little or no human intervention.)

 

If you’re supplying a service of this type, there’s an onus on you to identify the country in which your customer is based, so if your website currently doesn’t gather this information, it’s something you need to address. 

 

You then have to account for VAT at the rate applicable in the customer’s location. That’s where the VAT MOSS system is going to prove useful, as it simplifies the process and means that you don’t have to register numerous times in different jurisdictions. 

 

Although your accountant can’t take responsibility for the actual registration on VAT MOSS, they’ll be able to guide you through the process and can file returns for you once you’re set up.

Calling Northamptonshire Bookkeepers

DNG are often asked by our clients to recommend bookkeepers. As a result we have decided to compile a register of those that are Northamptonshire based.

If you would like to be included in this register please send an email to xero@dngca.com and include the following information:

• Software package(s) used
• Services you offer
• Industry sectors within which you have experience
• Hourly Rate

Most importantly we require a minimum of 2 references from recent or existing engagements. These will be checked ahead of any referral. It is important that we have confidence in your ability before we pass your details on to one of our valued clients.

We look forward to hearing from you.



DNG Dove Naish
www.dngca.com
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