CASE STUDY OF A CLIENT IN A SPECIALIST AREA OF THE GRAPHIC DESIGN INDUSTRY
I was approached by a company who were with a West End firm.
- They were a small company by this firm’s reckoning.
- They went to the bottom of the file
- Work left to the last minute, often fined, calls not returned
- Initially wanted a firm to do work on time
FIRST STEP – REVIEW OF THE BUSINESS
- 3 competent, hardworking directors
- Positive Balance Sheet
- Bookkeeping (Information System) all on Excel
- Turnover approx £250k
CONSTITUTION NOT PROPERLY SET UP
- Relationship not formally defined or formalized
No share capital issued
REMUNERATION PACKAGE
- As they were equal shareholders and directors, it became clear that their remuneration package would be equal.
- There was an opportunity to save a lot of Employer’s NI by including salary and dividends in their package.
- Other tax saving measures, cars, sundry items
ACCOUNTING SYSTEM
As mentioned, they had a good information system. All the information was available, but difficult to get at the information.
They agreed to use accounting software. I trained them in the use of it.
- Now the system is always up-to-date
- Information is reliable and everything balances
- Time saving is enormous
- Reporting available at the press of a button
SALARY PREPARATION
This is now undertaken by my firm
NEW PROFIT CENTRE
The directors found they had some time available. They did some fee earning work as a sideline.
This was discussed and now has become a profit centre in itself
QUARTERLY VISITS
I visit the firm, at least quarterly to:
- Prepare the VAT Returns
- Prepare and discuss Management Accounts
- Any other issues
Also annual tax planning exercise
TODAY
- Turnover has doubled, only partly due to the new profit centre
- Recession (fortunately) has not affected them too much
- Policy over the years has been to accumulate reserves, and they have a cushion if things turn bad
FEES
- Fees have increased, but they have paid for themselves several times over in terms of:
- Increased Profits
- Tax Saving
- Time saving
- Much less aggravation
Next Step:
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