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Bookkeeping Services

Making Tax Digital Update (MTD)

Who is affected?

VAT registered businesses with a turnover of over £85,000 are affected from April 2019.   Businesses with a VAT turnover of under £85,000 will not need to register for MTD until 2021 as it currently stands.


Key dates

As of 1st April tax has gone digital and your VAT return will need to be submitted by MTD rules

Quarter ending in June VAT return needs to be submitted by 7th August

Quarter ending in July VAT return needs to be submitted by 7th September

Quarter ending in August VAT return needs to be submitted by 7th October


What you need to do

You will need to maintain your records digitally which could be in an accounting software such as QuickBooks or Xero.  If you are using a spreadsheet you will need to use a bridging software to submit your VAT return. 


If in doubt, please speak with us.  There is a 12 month “soft landing” where fines will not be levied but this does not mean you don’t have to do it for 12 months.  You must make all reasonable attempts to submit your VAT returns under the new guidelines.


When do I need to submit my VAT return?

You usually submit a VAT Return to HM Revenue and Customs every 3 months.

Action                                                                         Deadline

Submit Online VAT return                                          7 calendar days after the standard deadline – extended deadline

Payment Online                                                           7 calendar days after the standard deadline – extended deadline

Payment by DDM                                                        3 bank working days after the extended deadline

For example:

Return period                 Paper return         Online return       Pay online                        Pay by DDM

30 April                31 May                   7 June                    7 June                    10 JuneFacebooktwitterredditlinkedinmail

Are you owed money?

Are you owed money by an individual or a company?

Have you chased your invoice over and over again to no avail?

Do you want to take it further but don’t know how?

Contact Harmonea and they can help.

We can walk you through the steps on how to submit a claim through Money Claim online or submit the claim on your behalf.Facebooktwitterredditlinkedinmail

Manual book-keeping or Electronic book-keeping

We are often asked for our opinion on book-keeping packages.  Our view is you need to use it 52 weeks of the year so choose what suits you.  However, as companies grow, it can be beneficial to use proper software for the job.  This can save a lot of headaches at the end of the year.

Cloud or Local is the next question.  Many software companies now offer cloud software where you can access it any time from anywhere to suit you.  This can be useful but many are not happy with this feeling that their data is not safe.

Harmonea have recently reviewed 10 book-keeping software packages which are a mix of local and cloud software offerings.  If you would like a copy, please ask.Facebooktwitterredditlinkedinmail

Credit Control

What is Credit Control?

Credit control is a system of debt management which will allow a business to effectively monitor its cash flow.

Credit control will help a business to monitor which customers it will be able to give credit to (i.e. it will give credit only to those customers who are able to pay).  Credit control is also used to ensure that customers pay on time, thus preventing the business from developing cash flow problems.

Should credit control not be properly monitored, then the business could be affected by cash flow problems, either due to credit incorrectly being given to customers, or due to a lack of payments received.  This could potentially affect  the cash flow of your own business and thus potentially the success of your business, which is why credit control is so important.

Methods of Credit Control.

Prevention is one method of maintaining credit control.  If it is felt that a business may be heading towards cash flow problems, then a creditor may decide that stricter terms of credit control may be required.   This could be achieved by reducing the amount of credit allowed to the customer.  Another option would be to allow existing customers to pay by agreed instalments.  Early payment may also be encouraged by allowing a discount for early settlement.    Such discounts are normally around 2.5% of the invoice and the terms of the discount would need to be included in the content of the invoice.

It is important to have a clear strategy of credit control.

The first step in any strategy is to know the customer and to establish, from the outset, the terms of credit control.  It is then important to send the customer the initial invoice promptly.  It is also important to ensure that the initial invoice is correct. .If the invoice is not initially correct, then payment could be delayed whilst the customer queries any errors.

The invoice should be addressed to the correct person and contain details of the goods or service supplied, the date of the invoice, the invoice number,  the date that the payment is due and the terms of any credit allowed.  Bank details may also be included to allow payment to be made directly.   It is important to enable the process of payment to be as straightforward for the customer as possible so as to encourage prompt payment and to ensure that funds reach the business bank account quickly.  Payment by cheque, for example, may cause delay as the cheque has to be received, then paid into the bank account.   The funds will then need to be cleared.  Electronic payment can avoid these issues.

Once the initial invoice has been sent, then it will need to be monitored.  It is, therefore, important to be aware of then the payment is actually due.  The invoice may be followed up shortly afterthe date of issue with a courtesy call to confirm that the invoice has been received and to clarify the date that the payment should be expected.

If the invoice remains unpaid 28 days after being issued, then the customer should be called again to remind the customer that the payment is still outstanding. This call may be followed up by an email, again to remind the customer that the payment is due.

If the payment still remains outstanding, then a letter should be sent to the customer to advise that the payment is late.  The customer should be advised that as the payment is late, then interest may be charged on the debt under the Late Payment of Commercial Debts (Interest) Act 1998.

If the payment then still remains outstanding, then a further letter should be sent to the customer to advise that the debt may be passed to a debt collection agency.

Throughout the whole process of credit control, it is important to ensure that accurate records of any written correspondence are kept.  Any phone calls should also be logged.

It is possible to use an outside company for credit control.  The advantage of this is that the process of credit control can be followed professionally, but impartially, without the additional burden of personal interest.

If you have any further questions on credit control, then please do not hesitate to contact us at Harmonea.Facebooktwitterredditlinkedinmail