Today in the Panthera Office we’ve been getting excited about the announcement from Xero that automatic bank feeds are now working for over 55 banks in the UK. I’ve just set up our first feed with RBS for a client and in about 10 minutes we’ve done away with having to import bank statement data or tick off paper statements. So what does this mean for our clients?

Automatic bank feeds means that every morning the bank data from the previous day is pushed from your bank, over a secure connection, into your bookkeeping software. So the information in your books is completely up to date, every day. This means that, if you’re doing your own books, your information is timely and accurate, and if we’re doing it then we can spend more time helping you to run your business better because we’re not wasting time waiting for information on paper or downloading files from your online banking website.

If you’re interested in how Xero might make your life easier please give us a call. We’re very happy to do a free demonstration and talk through what is involved in changing software.

In the Panthera office this week we’re dealing with a VAT investigation for one of our clients. These come about for all VAT registered businesses and I would expect to have one every 6 years or so. Some industries come under more scrutiny than others – the building trade once again seem to feel the brunt of this one – and especially if you are de-registering or claiming back VAT regularly.

So what should you do if an investigation is opened? Don’t panic! The VAT inspector is generally pretty personable and as long as you respond to their requests within the time frame they give you shouldn’t have a problem. They will normally ask you to provide accounts and then want to drill down into particular transactions so expect to spend some time photocopying your receipts and sending them out to the inspector.

If you’re using our brilliant More software then providing the data they require is a piece of cake – you’ve already got all of your receipts numbered and filed so they’re easy to find and normally a print out of your VAT reports and P&L will give them much of the information that is needed. And we’re always on hand to help out so give us a call.

Where this gets tricky is if you are keeping paper or spreadsheet records as you probably won’t be able to cross-reference your original documents. This is one of the main reasons we ask all of our clients to use our software – without it you could end up with a big headache when it comes to an investigation.

The recent admission by the HMRC that the PAYE tax codes of up to 6 million UK citizens have been incorrect over the last two tax years will bring a nasty shock to as many as 1.4 million taxpayers. Many people will receive letters before Christmas informing them that they owe Her Majesty’s Customs and Revenue what could add up to a debt of as much as a full month’s salary. The HMRC errors appear to have come to light when a new computer system was recently introduced.

Tory Wagg, Senior Chartered Management Accountant at Panthera Accounting in Grove said ‘This is a genuine concern for many of our customers, particularly in the current economic climate where savings rates have diminished, jobs are at risk and people have less spare cash to hand. A few have already contacted us to ask how they can best meet their payment and these seem to be for sums of an average £1380.’

‘We have issued a letter to our customers, reassuring them that we always check that their tax code matches their personal circumstances so hopefully many will avoid the pain of an unexpected demand. We are offering advice on what to do should this happen and in some cases individuals may benefit from a festive windfall – around 4.3 million people across the UK will receive a repayment. We are asking people not to panic as there are a number of things we can do to help, such as organising a payment plan for them or requesting that the outstanding amount is collected through their 2011/2012 tax code.’

Tory also highlighted that the tax bungle gives fraudsters the perfect excuse to operate by sending fake e-mails to individuals demanding instant tax payments. Her advice is to ignore any e-mail communications about tax codes and to consult with an accounting expert when a letter arrives.

We’re out visiting clients and talking through what we need to prepare their forms. Once all of the data for 2009-10 has been entered we’ll be making a second visit to explain what we have done, how much tax there will be to pay, or sometimes how much is due back to the client which always leaves a smile on our faces!

Once our clients have a full understanding, they’ll sign off the return and when we get back to the office we’ll be filing them online. It’s quick and simple, and it saves on a lot of stamps. It also means that we know straight away that the form has been received by HMRC – which gives us and our clients peace of mind.

Having a healthy profit on paper is great, but for a small business to survive at the moment there needs to be enough cash coming in to allow all of the bills to be paid. Ensuring this happens is what we mean by “cash flow management”. So here are our top tips for better cash flow in your business:

• Know your numbers
By keeping your book-keeping up to date and writing a simple monthly cash plan you will know in advance if there are going to be cash flow problems.

• Avoid fines
Late payment fines add up really fast and are unnecessary costs – if you send accounts late to Companies House they can charge you up to £1500! Knowing when accounts and paperwork are due can save thousands.

• Collect your debts
Debt collection CAN be done without upsetting your customers, How about a friendly note on the day the debt is due with a follow up call a few days later?

• Pay tax at the right time
Making sure you don’t pay tax late saves fines and interest, but if you get your accounts done early then you can plan for when you need to pay the tax over. Consider putting money aside in a separate bank account. You can also use the cash accounting for VAT scheme to pay over VAT only when its been paid to you. Ask your accountant or bookkeeper for more information.