Compensation for loss of trade

As anyone driving in or around Plymouth at the moment will be only too acutely aware, the dozens of different sets of roadworks in the city are causing lots of driving delays for the poor old motorist.

But what about the traders on Mutley Plain, given 10 days notice that the 'Plain was being shut to everything bar buses for up to 6 weeks? It goes without saying that the utility company in question has acted grossly irresponsibly in this situation, with scant thought for the livelihoods of many small businesses, both on the 'Plain and the surrounding areas - North Hill and Hyde Park Road included.

So what can a small business do about it?

Considering Mutley Plain specifically, though applicable to a number of loss of trade scenario's, the reality of proving loss of income will be difficult to prove, as any small business owner knows, a whole host of factors influence trading income from one month to the next (think the weather / fashions / uni term times etc etc). So, to stand the best chance of securing compensation, quality evidence for lost trade is essential, and the more evidence in support of the claim, then the stronger the case will be. Quality financial evidence will be the best evidence of all - here are some tips:

1) Most important - keep records tidy and up to date. Information to assist with claims will be more easily extractable then.

2) Traders will need to be able to compare takings for the period of trade against takings during 'normal' periods (two years worth of comparison data has been suggested).

Firstly, traders will need to be able to identify the exact periods affected - no use doing the books quarterly - weekly takings if not daily takings summaries will be essential.

This means looking back at takings last year and the year before that. Dig prior years' 'Z' readings out the loft and do a year on year comparison. The more data the better.

Make this an 'intelligent' exercise - look at the data and consider whether other factors may have influenced takings in prior years (eg was scaffolding up, or did you close for holidays?) such factors may have artifically reduced takings making the comparison unreasonable. That all needs to form part of your case, and you can start building your case now.

3) Non-financial evidence: do you have other sources of evidence that could be used to substantiate a claim? Do you measure footfall through the doors with one of those beeper things? If not, is it worth getting one and taking daily readings for the period of work and after?

Deliveries - have deliveries of stock failed because of lack of access? Note each and everyone down, and the impact its had on the business.

4) Empirical evidence: Consider what is going on in Plymouth during the work - would you normally be benefiting from a particular event at the University, but sales haven't materialised as people can't get to you? Or with the work spanning Easter, is your planned Easter promo campaign ruined? If so, note it down, and include within your wider case.

If this all sounds complicated, the reality is that for your accountant, the work could be done alongside existing services they provide. The work at Mutley will span two accounting years for many traders - a final tip from us is to get your books to your accountant asap after 31 March, and explain the scenario. As they do the normal year's work, it will be cost effective for them to prepare the additional financial info likely to be needed for a compensation claim.

In support of all the Mutley traders.
TAA

Do I need Accounting Software?

The answer is (of course) it depends. This article will aim to provide answers to typical queries we get asked, some of the misconceptions, and look at a couple of packages too.

If your business is VAT registered, and/or a limited company, there are legal requirements as to the records that must be kept. Spreadsheets can handle these requirements in a simple and straightforward manner, and it maybe that if you don't need any additional info about the financial affairs of the business, you need look no further.

BUT, and its a big but, if you want additional information, such as that listed below, really you need to be considering software:

• Profitability!
• Debtors reports (ie reports detailing customers owing you money)
• Creditors reports (the same, but detailing those to whom you owe money)
• Cash flow information
• Sales information (ie which products sold what, when)
• Stock control
• Costing information (ie how much was spent on say advertising last month)
• Automated invoicing and statement generation
• Project and time costing
• Customer database
• VAT reports
• Snapshot financial reporting data

For small businesses, the choices of packages are typically split between those covering bookkeeping (and therefore data entry only), and reporting, covering bookkeeping, everything above and a lot more besides.

The cheapest bookkeeping packages (think Cashflow manager and Do$h for example) will do VAT returns and produce basic profit and loss information. Don't ask them to do much more than that though. We think there are much better options out there, even for the non accountants.

If you've established you need software, and are looking at something that will be of value to you as well as your accountant, then really you are looking at a piece of full accounting software. What package to go for? Clients often come in having heard about Sage or Quickbooks, and it is true that these firms have been the market leaders in the UK for some time.

Here is our view on the current round up of full packages we regulalry encounter:

Sage Instant £115+vat - this just makes the list, it is simple and fairly cheap, but does have the likely functionality a simple, small business will need. Tech support is extra mind you after a year, as is training. We don't generally recommend it as non-accountants tell us they find it less intuitive to use. Its also software in the traditional sense, meaning it is one license installed on one pc.

Sage line 50 £550+vat - for small/medium sized businesses, with high volumes of transactions, and needing solid financial reporting, this is the definite article as they say. Reporting is excellent, but the programme is complex. Unfortunately it is expensive, and tech support will cost more still. Sage line 50 will push the abilities of the non-accountant, so be prepared for training on top (or to pay a bookkeeper to come in). Sage also have a nasty habit of charging for annual updates...........

Quickbooks - various editions from £90 to £450 +vat - some clients swear by Quickbooks software, it is certainly better designed for the non-accountant user, and also good with dealing with higher volume of transactions (as Sage). It achieves very similar functionality to sage, in an easier to use way. Again like sage, its installed on a pc or laptop, so unless you carry the pc round with you, thats the only place you can access your financials. Your accountants may well be less keen on Quickbooks but thats another story.......

VT Transaction+ £125+vat - I would describe this as a 'rough diamond' - VT has a basic company website, the package manages basic reporting only and is cheap as chips, but don't be deceived! Underneath the budget exterior lies a great piece of software, especially when your business is heavy on the transaction side. Its very easy and quick to enter data, easy to correct mistakes and easy to reconcile the bank. Its our choice over the sage and Quickbook alternatives EXCEPT if you want it to talk to your website, which it can't, yet.

Kashflow £15.99+vat per month direct (or see our offer below) - this is by far the best of the new breed of 'in the cloud' programmes. 'In the Cloud' refers to the fact that the software is internet based, so can be accessed from wherever you happen to be, and via pc, laptop or even mobile phone. The other big advantage to this is that your accountant can login to your records for the occasional check-up without doing the whole transfer of data routine malarky! Functionality is great for the smaller business, including great invoicing options and reporting. It fairs less well for the high volume of tansactions business (simply because its internet based). Otherwise we think its the first and only choice, and if you've never used accounting software before, we think you'll be amazed by its ease of use.

I did mention that we are running a Kashflow offer - currently we have a 60 day trial on our TaxAssist version, AND are selling it at the discounted rate of £149+vat for the year, AND will even chuck in 2 hours one on one training for purchasers who also appoint us as their accountants. We like the product so much we use it in house too for our own books, need we say more?

This article will hopefully emphasise the fact that there is no one size fits all when it comes to software. So if your accountant insists on your use of one program its probably because its in his interests rather than yours!

Ultimately we'll work with whichever software is right for each client.