Posts

Covid-19

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It is currently impossible to avoid the news of the Covid-19 epidemic at the moment as the situation unfolds rapidly and becomes an increased risk of becoming a global pandemic. A pandemic is an issue that we in this country would be unlikely to have prepared for in a business sense and as a result we may see this virus affect our business landscapes in ways we may not have expected. As cases begin to grow in number and community transmission begins to become more apparent, it is important for businesses to have a plan in place for keeping their employees safe.

The Government have recently published an income support and economic stimulus package which outlines the following main points for companies who may find themselves on lock down or needing to self-isolate their staff or work from home or to reduce economic impact:

  • The 6 waiting days for sick pay with a medical cert will be waived.
  • The means test requirement for Supplementary Welfare Allowance for medically certified self-isolation will be removed.
  • Self-employed individuals will now be entitled to receive either illness benefit, or non-means tested supplementary welfare allowance.
  • A €200million liquidity support fund will be available for impacted firms.
  • The existing systematic short time working scheme is available for employees who may be placed on reduced working arrangements.

On a more global scale, it has been reported that businesses worldwide are changing and adapting practises to better cope with Covid-19. Many companies in Ireland, the United Kingdom and the United States have immediately implemented travel restrictions or a work from home policy for the foreseeable future in order to avoid community transmission within the office space. Unfortunately, these issues will naturally cause service issues for some.

From looking at the China model which involves the businesses who were first hit and continue to deal with the fallout of the virus, a few key pointers for other businesses worldwide have been outlined:

  • Plan ahead but be prepared for the need to be adaptable as the situation develops.
  • Keep employees informed consistently so that they feel safe and protected.
  • Relocate labour where possible. In situations where employees can work from home to prevent community transmission this can be effective as well as social distancing practises in roles that can not be completed at home.
  • Utilise social media and shift some operations to an online system where possible.
  • Prepare for recovery be it fast or slow moving.
  • Look for the positive points and identify where your business can improve in the face of adversity.
  • Use the situation to become more innovative and embrace innovation within your business and your employees. Thinking on your feet is essential in such a fast moving constantly unfolding landscape of change.

This will undoubtedly be a period of unease and difficulty for many on both a business and personal level, but through following the appropriate guidelines we can endeavour to keep all feeling safe.

 

How to Release Cash Flow from your Business

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Here at EcovisDCA we are constantly striving to ensure that our clients and friends have the most successful business and financial lives possible. We are not just a faceless company who talk the talk, we walk the walk. We know that your business is a labour of love and we endeavour to ensure the one-to-one advice and care you and your business deserve. With that in mind, we have decided to focus this week on ways in which you can release cash flow from your business. As you know, we are great supporters of Irish SMEs (Small and Medium Enterprises) and these businesses are often the first to suffer any ill-effects of a downturn and as such it is vital that they are protected. Cash doesn’t often flow readily in February after the excesses of the festive season and the January sales, so we are here to discuss the ways you can manage and release business cash flow.

Projections:

When projecting cash flow, the impulse is to assume regular income, however, the peaks and valleys of business life are often first seen through cashflow, so it is important to take this into account when projecting the year ahead regardless of the size or avenue of your business. Being armed with the knowledge of potential financial issues ahead and projecting a realistic cashflow cycle for the year ahead may allow you to avoid a cash shortage during tighter times.

Enforce Payment Terms:

The payment terms for your business should never be a casual affair, it is essential to create and enforce your payment terms. Create incentives for suppliers to meet your payment terms, and penalties for non-payment. It is worryingly becoming normal for payment terms and dates to be exceeded, if this becomes a problem, we advise strengthening these terms and consistently following up. Having suppliers be consistently late on payments can push you into debt. Enforcing terms will free up cash flow.

Marketing:

Marketing isn’t just a sales pitch; it is the creation of your brand and creates an image of your business in the minds of potential customers. It may seem counter intuitive to spew the adage “You have to spend money to make money” but in this case it is entirely true. Good or bad marketing can make or break your business, so it is worth investing time, money and resources in.

Keep it Simple:

Simplicity is often the key and we regularly find our cashflow tied up in long term projects which are offering no short-term return. Evaluate what are the essential projects your company is budgeted to work on and go from there. The same can be said for many business processes, are there ways your business can be more efficient, are you expending employee time in valuable or invaluable tasks?

Pay Debts:

Again, it seems counter-intuitive to insist on debt payment to release cash flow but once all company debt is paid, that cash becomes available and can be saved or re-invested into the business.

External Income:

Occasionally there will be times when it is not possible to finance your business internally. In these cases, applying to schemes, applying for grants or loans etc. can be the reason for the extended lifespan and rejuvenation of your company.

These are just a few of the ways in which you can better manage the cashflow of your business, should you have any concerns or questions about these or any business or financial matters, please do not hesitate to contact us here at EcovisDCA, where we will be happy to help.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

Remembering the Importance of Saving

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Don’t Break the (Piggy) Bank

As January gets into full swing and we all settle back into the daily grind of working life, some of our New Year resolutions may be left behind or pushed aside in favour of those resolutions promising more longevity or better return of investment. High on people’s lists of resolutions is often the vow to save more money in the coming year. Whilst the increasing cost of living might make this quite a difficult task, it is often one of the most rewarding resolutions as the results can be clear to see. We have spoken recently about some of our top tips for saving in the New Year, and it seems like you will not be alone in your savings endeavours.

The Bank of Ireland Savings and Investment Index, published on 15th January shows that over half of Irish consumers were regularly saving during the December period. December is of course a rather difficult time for savings, and this sentiment was also reflected in the findings. Tom McCabe, global investment strategist with Bank of Ireland Investment Markets was quoted as saying:

“”Irish sentiment towards savings and investments eased in December mainly as a result of a weaker outlook for the savings and investment environment. This may be temporary given recent trends in the index but could also be an early indication that savers are looking for better returns on their money and are willing to consider alternatives to their savings account.”

This shows that although Irish consumers are continuing to save, there is a lingering fear that savings are no longer generating enough of a return in their traditional savings methods. This may see a shift in the Irish market towards investments rather than traditional saving. The Index found that 34% of Irish consumers also invested regularly during the month of December, much like the savings findings this could be either temporary or indicative of a new trend in Irish savings.

Hinting towards this being a possible new Irish trend is the fact that investments were more prevalent in the younger generation with 39% of under 50s regularly investing whilst only 26% of over 50s were found to be investing during the same period. Perhaps unsurprisingly, investment numbers were higher in November than December, which is to be expected as December is often a month in which consumers have less disposable income.

These findings also found that the Irish population have a strong preference towards saving should they encounter any windfall gain, but also a new move towards considering investments with windfall amounts.

Should you require any help or guidance on any savings, investments, business or personal finance matters please don’t hesitate to get in touch with us here at EcovisDCA.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

MORE BANG FOR YOUR BANGS

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Following on from the height of the financial crisis, it may seem to employees that benefits and perks are few and far between with some companies. Now that the Irish market is beginning to find its feet again more and more Irish companies are beginning to once again have the finances to show their employees how valued they are by offering benefits and perks. Some perks come with benefits for the employer as well as the employee such as the cycle to work scheme and the Leap card tax saver ticket plan which doesn’t have an extra cost for the employer to pay. With changes being made in the health sector, health insurance is something which is highly sought after currently with over 2.12 million people now availing of this insurance, and even with some providers offering a low cost family plan, it can often still be a cost that is out of the reach of the normal employee as the cost of living remains high.

 

Recent reports from health insurance experts and researchers suggest that as many as four out of five health insurance customers may be on the wrong plan, and thus paying more than necessary for their health insurance. Dermot Goode of TotalHealthCover.ie has recently spoken out about this issue stating that over 80% of customers are on a plan that is too expensive and which does not truly give them the insurance cover they require despite the additional cost. Some of this can be put down to the digitalisation of consuming as a whole as generally people are going to their computers to input a light amount of data to compile a generic plan which is taken as the best option despite a hefty fee which might not entirely cover your necessities.

 

Goode has stated that “as consumers we need to be more proactive in terms of reviewing our cover properly to bag healthcare savings wherever possible.” This issue is a core one for employers who currently offer health insurance as part of their employment package as larger employers could be spending upwards of six figures to ensure cover for their employees, without knowing if these plans are appropriate or offer the necessary cover. There are a variety of schemes on offer to both families and employers and it would be wise to stay abreast of all changes in this sector to ensure that you as an employer or customer are truly getting the best value for money from your plan. This does require a bit of extra leg work in researching plans and deals but could potentially save your company thousands whilst still providing for your employees.

 

It has been reported that employer plans could potentially save up to 20%. Should you require any help or advice on your own or your company’s business and financial matters please don’t hesitate to get in touch with us here at DCA Accountants.

 

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

DIRECTOR’S (LACK OF) COMMENTARY

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As a director of a business of any size, whether a co-director or a single director you will likely play a vital role in the day to day running of the company. The role of a director is a crucial one which cannot be overlooked as they will be responsible for outlining the overall goals and strategies of the company as well as for overseeing the business and putting into place procedures to ensure the continuing success of the company. The director is also the individual who will be faced with the toughest decisions should the company begin to show signs of failure. Even so-called “passive” co-directors who may be director only in name and not in actions need to be aware of the weight carried by the title as they can be brought to the fore should issues arise, as evidenced in last year’s case featuring model and presenter Glenda Gilson in which she was ‘deceived’ by her co-director brother about the poor handling of company matters.

 

More recently A&L Goodbody have written about a case “Murphy V O’Flynn wherein a liquidator sought a court order restricting directors William and Deirdre O’Flynn from acting as directors of their company following a repeated failure to file the appropriate accounts. This was deemed a severe failure and a breach of obligation by the company directors. Whilst Mr. O’Flynn made no objection to the order against him, Mrs O’Flynn claimed that she had been deceived by her husband in regards to the company affairs offering forgeries of her signature as evidence. As the judge in this case was satisfied with her testimony, she was not restricted by the high court.

 

The importance of cases like these cannot be overstated as it highlights an Act which all prospective directors should be aware of. Section 819 of the Companies Act replaced section 150 of the same Act. This stipulates that a director must establish that he/she has acted honestly and responsibly in relation to company affairs before or after insolvency, as well as having co-operated with winding up and liquidation proceedings as much as possible.

 

These cases showcase the importance not only of directors, but of active directors. As a partial or full director of any company it is your responsibility to ensure that you keep abreast of company dealings as even ‘passive’ directors have a responsibility to their company and clients/creditors.

 

Should you have any queries or require any advice or guidance on your own company and financial matters please don’t hesitate to contact us here at DCA Accountants where we will be happy to help.

TIS THE SEASON TO REMAIN PROFESSIONAL

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With the Christmas party season just around the corner, we here at DCA Accountants are always looking out for the best interests of our clients and readers. As such, we have decided to talk today about the darker side of the office Christmas party which could place a dark cloud over the season for you or your staff. The Christmas party season is often rife with reports of bullying of all kinds and harassment. Not quite the ideal way to round off a busy working year.

 

The office Christmas Party is a great way to thank your employees for a year of hard work and dedication. It can also be a good way to get to know your co-workers outside of a strict office environment. However, from a managerial standpoint it can be somewhat of a mine-field, with a UK study stating that one in ten employees knows someone who has been disciplined or dismissed following the staff Christmas party. The top two culprits here are alcohol-fuelled fights and sexual harassment issues. These issues are not widely considered when choosing the event, but one that is important to bear in mind. We suggest some ways to avoid these awkward and unnecessary stumbling blocks and ensure that both you and all staff have a wonderful trouble-free evening.

 

The standard office Christmas party will usually occur outside of the work premises. Despite this fact, it is vital to remember that the responsibility still remains with the employer to ensure the protection of all employees. If cases of harassment are brought up, you as the employer are liable, despite the party location. The party environment may be festive, but legally the event is just an extension of the office.

 

A good way to ensure that all staff know that they must still behave appropriately with one another during the party is to circulate a memo which pinpoints the company’s/office’s no-tolerance approach to issues such as bullying and harassment. This notice should also include the company grievance procedures should any staff have issues. Management should be advised not to discuss any business matters such as salaries etc. at the event. This will ensure that no promises are made under the influence of alcohol which cannot be kept when the haze passes.

 

Something else which is not widely considered is that the party should be optional for all staff and not mandatory. This allows for people with other beliefs or responsibilities to politely decline without feeling awkward. We would also advise arranging specific finishing times for your event and perhaps arranging transport to avoid further dangers for you and your staff.

 

With employers and employees under increasing pressure to hold onto their positions, these easy pitfalls at the staff Christmas party are easily avoided. The most important thing to bear in mind is that the boundaries of acceptable behaviour must be set out beforehand in order to avoid any unnecessary stress or awkwardness. We here at DCA Accountants hope that you and all your staff/co-workers have an enjoyable Christmas party and festive season.

AIB TO THE RESCUE

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The only thing more stressful and daunting to new business owners than an unexpectedly large bill landing on your office doormat, is that time of year when the “I know it’s going to be large, but maybe if I pray really hard it won’t be” barrage of annual bills come flying in. This year, AIB have come up with two new solutions to this common problem that might leave you imagining the logo wearing a cape.

For most business owners, the worst evil of annual bills, is their size and the fact that they need to be paid all at once. Without an enormous stockpile of gold in your basement, these bills can often loom over you and cause an unwanted interruption in your cash flow and savings potential. This is where AIB can step in (cue the superhero soundtrack) with their new Prompt Pay and Insurance Premium finance options.

As part of AIB’s ‘Backing Brave’ initiative, Prompt Pay and Insurance Premium are two newly announced short-term financing products designed to take the sting out of annual bills. The Prompt Pay product covers all large one-off payments – apart from Insurance payments, a shortfall which is picked up by the Insurance Premium product to assist both AIB and non-AIB customers manage their monthly outgoings.

These Prompt Pay loans must be a minimum of €5000 and be paid off within 11 months. Prompt Pay can assist customers with outgoings such as:

  • Preliminary tax
  • Pension contributions
  • Commercial property rates
  • Subscription fees to professional/trade associations
  • Annual audit fees

The greatest bonus for business owners in undertaking these loans is that both are offered at a fixed interest rate. This offers the peace of mind of knowing the cost of your monthly repayments in advance. The ability to spread these usually all-in-one costs over a period of 11 months can assist you in budgeting for the year ahead and help you to manage your cash flow without these lump sum interruptions. The only extra cost incurred here is a documentation fee of €63.49 which will be charged with your first repayment.

Both Prompt Pay and Insurance Premium proclaim themselves as easy to set up through your local branch. Should you have any concerns or wish to gain advice on your eligibility and finances in general don’t hesitate to contact us here at DCA Accountants.

DELEGATION IN BUSINESS

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Delegation is defined as being “the act of giving control, authority, a job, a duty, etc., to another person.” You could be forgiven for thinking that delegation is just another buzz word used in management meetings or team building exercises but the truth is that whether your business is small and just now finding its feet or an enormous multinational corporation, delegation is an absolutely essential part of all aspects of business from the ground up. It has been noted that delegation is not a task, but an on-going process that becomes an integral part of a successful business.

 

We all know the saying “if you want something done right, do it yourself” and we are all guilty of reneging on delegating when we find ourselves frustrated or in a time crunch. Whilst this is a perfectly acceptable and sometimes expected practise, continually refusing to delegate can have serious professional and personal repercussions including exhaustion, low morale depression and burnout. It is essential to employ more long-term thinking practises. The process of delegation can also be beneficial in avoiding the pitfalls of micromanagement wherein your employees may not feel valued or trusted to carry out certain tasks. Delegation is not easy, but sometimes the most fulfilling and worthwhile things are difficult at first. Here we have collected some of the most important things to bear in mind, to help you engage in effective delegation in your workplace.

 

Plan ahead:
Long-term thinking is essential in all aspects of business, but particularly when it comes to delegation. It is important to know in advance what it is you want to achieve and be able to express this to your colleagues.

 

Know when to delegate:
Whether you are in a managerial or a more secondary role, the most important aspect of delegation is to know what tasks you can delegate and to whom. There will always be some tasks which should be completed only by you and it is important to identify what these are in order to separate them from all other tasks. Once you have identified your own most critical tasks, you can then make a note of those you feel could be completed by others – and if applicable assign those tasks as necessary. This frees up your own time to be used more wisely and also shows a level of trust in your employees/colleagues which they might not have felt previously.

Know which tasks suit which employees:
The next important step in effective delegation is deciding which person will be the right fit for the job. This can be as simple as assigning a sales job to a sales oriented employee, or simply matching an employee’s skillset or personality to the job at hand. Don’t be afraid to offer further training to employees who will require it before taking on a task.

 

Be specific:
This is perhaps one of the biggest keys to effective delegation, and also where many people go wrong. The worst thing you can do when delegating is to be vague, as this leaves your employee unsure of what their role is, causing undue stress to both them and yourself when you invariably fall into the “if you want something done right, you have to do it yourself” trap. The key here is to identify the task clearly, know what results you want to achieve here and ensure that the person to whom you are delegating is well aware of the expected outcome. Communication is the key to effective delegation and a successful business.

 

Deadlines:
Deadlines must be discussed when delegating so that the individual taking on the task is well aware of the parameters within which they are expected to complete the task. At this point, agreeing on methods of communication and “checking in” on the project should also be agreed. Setting a defined deadline can avoid problems further down the road.

 

Accountability:
This is the hardest part of the delegation process. All involved must know who is accountable should there be a problem from the outset, as well as what will be expected of them with this task. Accountability cannot be passed on, it can only be shared. Ensuring accountability means that your employees/colleagues will stay

 

Feedback:
Offering feedback on how the process/project has gone boosts staff morale and also ensures that all involved know their strengths and what aspects they can work on for the benefit of future projects.

The process of delegation is a difficult one to begin, but will become easier each time as your employees/colleagues become better equipped and experienced at dealing with certain similar tasks in the future. You will soon find yourself wondering why you didn’t start this process sooner as your business becomes a more defined and organised organism.

PENSION DEADLINES

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The Revenue Commissioners have recently extended the deadline for people in excess of current pension savings to notify them. It has become a standard practise in the current financial climate for the amount of pension funds an individual can accrue while availing of tax relief to be reduced.

 

Those above the new threshold can notify Revenue and receive a new personal fund threshold, reflecting the size their pension fund was on the date the lower limit was announced. This is to ensure that these individuals do not face a further tax bill.

 

In January 2014, the threshold fell from €2.3 million to €2 million, those with savings between these figures were given until July 2nd, 2015 to notify Revenue. Despite the deadline, it is thought that many people have not been in touch with Revenue and as such the deadline has now been extended to July 31st 2015.

If you have pension savings between €2million and €2.3 million you are encouraged to notify Revenue ASAP in order to avoid any further taxation on these amounts. It is unlikely that further extensions will be granted.

 

The deadline for staff in the public service to retire if their pensions are to be calculated on the higher salaries has also been extended in recent months. The new deadline will be July 2016. Minister for Public Expenditure and Reform, Brendan Howlin has said that the new deadline is intended “To minimise impacts on schools in particular.”

 

It is hoped that this extension will reduce the number of key managerial senior staff retiring en masse, which could lead to significant financial strain on schools in particular.

The Department has said that under the Haddington Road agreement, public service pay rates were reduced by 5.5% or more. “Retiring within the extension period will allow an affected public servant to benefit from superannuation calculated at the pre-cut pay level.”

 

If you are unsure about how these changes may affect you or you require any assistance with your own financial matters, please don’t hesitate to contact us here at DCA Accountants.

DCA Q&A: CAN I AVAIL OF STATE SUPPORT?

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Q: I’ve been slogging away for some time now as a sole trader. Since January, a couple of major clients have gone out of business and I’m left with just a few hundred Euro at the end of each month. Because I’ve been self-employed for most of my working life, I won’t be able to just pack it in and claim Jobseeker’s Benefit. However, are there other supports that could help me in this situation?

 

A: You may well be entitled to Jobseeker’s Allowance , but the process of claiming is a bit more complicated because of your status. This payment is given based on your means rather than your PRSI contributions.

 

Jobseeker’s Allowance pays €188 a week, plus €124.80 for each adult dependant and €29.80 for each child. However, any money you make from self-employment is subtracted from this. So, if you’re married with a child, you might be entitled to  €332.60 per week. If you or your spouse is making €100 a week from self-employment, however, this would fall to €232.60 per week. Aside from your self-employed income, investments or property that you own (besides your own residence) will be considered as means.

 

As you can imagine, much depends on how the social welfare office assesses your means. When you apply, you will have to meet with a social welfare inspector to find out about your business. The inspector will be looking to assess the income you may reasonably be expected to get from your business over the next 12 months. Usually, the income from your past 12 months in business will be taken as a guide. However, if you can demonstrate that circumstances have changed – if, for example, your former clients have made concrete moves to shut up shop – this will be taken into account. You will be asked for your receipts and payments or audited accounts for the current and previous year – so, if you’re applying in July, you’ll have to supply details to cover the year to date and 2013. In some cases, you may have to show your audited accounts going back even further.

 

Because estimating your means is so complex, it may take some time to process your claim. However, you can also apply for Supplementary Welfare Allowance to cover any immediate needs you have. To get started, you can download the formhere and make an application. If it turns out that you qualify for Jobseeker’s Allowance, you can also apply for supplementary supports such as Rent Supplement, a Medical Card, and Back to School Clothing and Footwear Allowance.

 

At this point, you may well be evaluating the future of your business – is this something that you can revive? Do you have the energy and motivation to do so? There is no shame in shutting down your business if it isn’t working, or taking it in another direction. When you (hopefully) get the immediate financial crush addressed through Jobseeker’s Allowance, you should devote some time to considering the next step in your career.

 

Declan Dolan