Flexible working

An Insight into the Way We Work in 2013

A recent survey conducted by online freelance marketplace People Per Hour has revealed that the north of England is now a major entrepreneurial hub. Results show that 9 out of the top 10 self-employed hotspots are in northern England and Scotland, with Manchester and Liverpool topping the leader board.

So what has caused this upsurge in pioneering spirit? Has the flagging job market hit the north of the country to such a degree that people are forced to create their own jobs, or are we seeing an overall revolution in the way we work?

Virtual working – a solution in good times and bad

Technological advances over the last decade have offered more choice in the way people work. This, and the economic downturn in 2008, has combined to allow enterprising individuals to compete for work using their existing skills and previous experience.

In the past, thisFreelancer lifestyle way of working has generally been more attainable for internet-related professions such as web design and graphic illustration, but increasingly has come to include any work that can be completed using a computer and an internet connection.

Although not all freelancer marketplaces focus on quality, and many have been accused of significantly lowering freelancer market value, if you find a reliable site where you can build your profile and be compensated well for the work you do, you have the opportunity to build a flexible, rewarding lifestyle.

Writers, administrative experts, bookkeepers, public relations professionals to name but a few, all now have access to regular projects thanks to forward-thinking and trustworthy businesses like People Per Hour.

Co-founder and CEO, Xenios Thrasyvoulou, said, “Traditional employment is unlikely to return to pre-recession levels, as increasingly businesses want a more flexible workforce. They prefer to be able to hire on an as-needed basis, rather than having the cost not just of employing full-time staff but also the additional cost of having employees on-site.”

Flexible working arrangements as an employee

Increasingly, businesses are realising the benefits offered by flexible working, both to the company and to the workforce. The Olympic summer of 2012 is a case in point, and illustrates just how successful this practice can be, with 13% of organisations in the capital allowing staff to work flexibly during the Olympic Games. A resounding 77% of workers welcomed this move, showing massive support for flexible working initiatives.Flexible working

Managing a remote workforce still appears impossible to many business owners, but a slow realisation is dawning that with reliable and trustworthy employees, this type of working could benefit their bottom line.

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How a small red tomato can help your time management skills

Pomodoro TechniqueMaking the most of your time can be notoriously tricky if you work from home. Distractions are all around and before you know it the day is over, along with your chances of making a decent profit.

If procrastination is your thing, you may be interested in a time management technique that’s been around since the 1980s. The Pomodoro Technique is a process whereby you allocate blocks of time – 25 minutes – to each piece of work you need to complete, and then take a 5-minute break after each one.

You can spread larger jobs over several blocks of time, and after completing 4 chunks of 25 minutes, you take a longer break of 15-20 minutes.

It’s all about focus. Spending each block of 25 minutes focussing on just 1 task without doing or thinking about anything else. It might sound simple but it trains your mind to concentrate for short periods, and in doing so can improve productivity and help you gain a useful insight into your own working practices.

Why a tomato?

Francesco Cirillo, the inventor of the technique, used a tomato-shaped kitchen timer for timing his own work, and named each successfully completed 25-minute work period a ‘pomodoro.’

In addition to the basic timing of your work, the technique also encourages you to chart your progress with extra details such as how many times you were distracted.

By making a note of this for each 25-minute work period, you can see how well you are doing in avoiding procrastination, which gives you motivation to crack on with more work rather than clean the fridge!

You can download a free PDF about the technique here, where you’ll also find some other free goodies and resources.

Freelancer lifestyle

Does the ‘free’ in freelancer mean true independence?

Starting a freelance business with an air of optimism and hope for the future is the best way to approach it, but how much independence do you truly have as a freelancer? Most people are looking for certain lifestyle changes when making the jump from employee to independent freelancer, including:

  • Control over how they spend their time
  • Being able to choose the type of work and projects they take on
  • Setting their own terms of work
  • Being paid professional rates that are worthy of the work produced and the value provided to clients

No more bosses?

But aren’t you just swapping one boss for a multitude of bosses who are just waiting to tell you how to operate and when to work?

As a professional freelancer you set the rules of how, when and where you work, which jobs you take on and how much you get paid. You don’t work as an employee any more, and that is the crux of being a freelancer in my opinion – the freedom to set the rules.

If you take on a client who expects you to be constantly available at a moment’s notice you might as well be an employee, even if you work from home. You need additional time and space to market your own business, deal with invoicing, networking, and the minutiae of running a successful freelancing business. This makes actually taking on and completing work only part of the big picture.

A way of life

Some freelancers prefer to adopt a strict working routine similar to that in the workplace, staying focused and motivated 9-5, which is great for some but doesn’t work for everybody. The beauty of freelancing is that if you want to, you can make it more of a way of life.

Burning the midnight oil might not be everyone’s cup of tea but if that’s the time of day when you are most productive, you are no longer restricted by someone else’s working practices.

The downside of a being a freelancer is that you never really switch off, and everyone you meet becomes a potential client. But that is a small price to pay for the extraordinary freedom and independence this lifestyle offers to those able to take the jump from employee to freelancer.

Are late payers the final straw for struggling small businesses?

late paymentsHow can small business owners take control of their cash flow when the average time taken to pay their invoices is reported to be 38 days?

‘The cheque’s in the post’ used to be the standard delaying tactic for not paying an invoice, but according to BACS, the most frequently heard excuses now are that the payment is ‘awaiting authorisation’ or that it’s being ‘processed by accounts.’

It is believed that large companies are the worst offenders for delaying payment, with the retail and distribution sector suffering the most at the hands of late payers.

So what options are open to beleaguered and stressed small business owners to overcome the problem of slow payers?

  • Automated payments

Automated payments save time and money in administration and invoicing costs, and can allow for overdue amounts to be broken down over a period of time so that full payment is at least more likely, if not definite

  • The Prompt Payment Code

Make your late payers aware of the Prompt Payment Code, an initiative championed by major business organisations including the Confederation of British Industry, and sponsored by some of the major UK banks.

Stressing the importance of prompt supplier payment within agreed timescales, the Code promotes best practice, not just in terms of payment, but also in procedures for dealing with any problems or issues surrounding specific invoices.

In January, the Enterprise Minister Michael Fallon, published a list of all FTSE 100 and FTSE 250 companies who had failed to sign up to the Prompt Payment Code in an attempt to ‘name and shame’ them into taking action.

The Prompt Payment Code website states,

“Independent analysis by Experian suggests that current signatories to the Code represent over 60% of total UK supply chain value, so the Code is making a difference.”

So it looks like small business owners are finally getting the support they need to keep their cash flow more reliable, and their heads above water. Let’s hope it does make a difference before it’s too late.

Blogging

How articles and blog posts can drive traffic to your website

SEO Blog WritingRegularly updating a business website or blog with fresh, relevant information can result in more targeted traffic, higher search engine rankings, and a much-needed boost to your online profile.

Content can be a simple blog post or short article on a dedicated area of your website, and if it’s added on a routine basis it won’t take long to make a difference to your website traffic.

One way to come up with ideas for regular new information is to think about the questions your target market might ask. Providing the answers to customers’ questions or addressing their problems will show that you are in tune with their needs, and you can build trust by sharing knowledge and information without trying to sell to them.

 

Being organised and planning in advance what you are going to write will help to keep you on track with topic ideas, reducing the overall amount of time needed to keep your blog or website updated. Give it a try and see the difference it makes to unique visitor numbers.

How taking out an Individual Voluntary Arrangement might financially affect your partner

Individual Voluntary Arrangement

 

Taking out an Individual Voluntary Arrangement won’t directly affect your partner financially, as they’re not expected to contribute towards repayments, but it can affect them indirectly in several ways.

 

Disposable income

Your partner will be expected to pay a fair proportion of household living expenses, which is calculated relative to their income. For example, if their salary constitutes 40% of the total household income, they’ll be expected to contribute this percentage towards general expenses such as food and utilities. This is done to prevent people declaring that they alone pay all living expenses, which would reduce the figure available for repayments under the IVA.

Credit reports

If you hold joint accounts or have joint liabilities with your partner, taking out an IVA could have an effect on their credit rating. A note will be placed on your credit file when you take out the IVA, and it remains there for six years.

Should your partner request a loan or new credit, lenders might be reluctant to lend to them based on the fact that you are financially linked. The electoral roll is used to confirm your partner’s identity and will show that they are financially linked to someone with an IVA.

Equity in property

One of the terms of the IVA might be that you have to put forward some equity in your property as part of the repayment schedule. If the property is jointly owned your partner’s equity isn’t affected directly, but the overall amount available for you both to borrow against the property is reduced.

The majority of couples are linked financially in some way, whether by a joint mortgage or simply a joint bank account, but your partner can’t be held directly responsible for your debts.

Personal financial records: what information do we need to keep?

Financial paperworkFinancial paperwork is needed for so many things in life, and keeping records organised and easily accessible makes more sense than scrabbling around looking for official bits of paper when you need them in a hurry.

 

What personal financial information are you most likely to need?

Income from employment

If you’re in employment the most important documents are your wage slips and P60, which is a summary of salary, tax and National Insurance for the financial year. If you intend to borrow money the lender will ask for several recent wage slips as proof of earnings, and without this proof it’ll take longer to obtain the loan.

Employee benefits like running a company car require various pieces of supporting information, such as business mileage and the cost of any car repairs. Find out which receipts you need to keep to complete form P11D (summary of all employer-related expenses and benefits) at the end of the tax year. Financial paperwork

Money going out

After submitting a tax return, HMRC may ask to see proof of the expenses claimed, so having an organised file of tax-related documents and receipts will make the whole process easier.

Insurance documents

From house contents to mobile phone insurance, it’s hoped that you will never need these documents but if the worst does happen, having them to hand will speed up the claims process.

Warranties and guarantees

If the washing machine or fridge freezer stops working you’ll be glad you know where the warranty is, and if they’re all in one place you can shred the old ones as they expire.

It’s a good idea to buy a concertina file for all financial paperwork so that everything’s clearly labelled and in one place.

Business insolvency

5 signs that business insolvency might be just around the corner

Insolvency isn’t something that happens out of the blue – there are clear signs that indicate cash flow problems within a company, and what most people regard as a ‘successful’ business can go under very quickly, even if sales are up and profits are good.

So what are some indications that business might not be quite what it seems?

1.    Late payment of supplier invoices

If using delaying tactics to extend periods of credit has become standard practice, then it might be time to seek the guidance and advice of an insolvency practitioner. Disputing supplier invoices or writing post-dated cheques suggest that cash flow is a real problem. Suppliers will become reluctant to extend credit if they’re having to send final demands on a regular basis, and may even place a stop on the account.

2.    Using too many suppliers to obtain credit

Using many different suppliers in order to be granted larger amounts of credit overall might disguise the problem for a little while by spreading the load, but will make no difference in the end.

3.    Not knowing how much is owed to the business

Often due to poor internal procedures and systems, this is one of the easiest problems to rectify. Efficient credit control procedures can be implemented quickly, making a huge difference to the flow of cash through a business. The number of days a debtor takes to pay is a key figure that needs to be monitored closely, with strict follow-up procedures in place to make sure no-one falls through the net.

4.    Not limiting the amount of credit given to new and existing customers

The company has to balance the risk of their customers looking elsewhere if their demands for credit aren’t met, with the cost of potential bad debts. It’s a fine line between the two, but carrying out formal credit checks can help to get a picture of how solvent they are.

5.    Relying on just one or two large customer accounts

If the company is reliant on just a couple of large customer accounts the business will be exposed to their financial difficulties. Spreading the risk by having different income streams or several smaller customers reduces the impact of one customer failing.

Insolvency doesn’t just happen overnight and can be avoided if warning signs are noticed. Professional insolvency practitioners offer valuable preventative advice and support to a business that’s struggling to stay afloat, and can make the difference between success and failure.

Increase productivity

How can invoice factoring encourage growth and help an ailing company?

Factoring companies generally take over the credit control function of a business, and are responsible for collecting outstanding payments. Usually within 24 hours of an invoice being issued the factoring company pays a percentage of the invoice, often around 85 per cent, to their client.

For companies on the verge of insolvency this immediate injection of cash, in addition to a reduction in administrative costs, can make a huge difference to financial stability. The cost of chasing debts can be high in terms of time and staff wages, and having this burden removed can breathe new life into a flagging business.

The factor pays the balance of an invoice (minus fees and interest charged on the loan) to their client on collection, and controlling the debt-collection process like this enables factoring companies to lend a higher percentage of the value of invoices than banks.

Attract new business with invoice factoring

Using the services of a factoring company means that businesses are able to attract new clients who are looking for credit terms, without having the problem of waiting thirty days or more for payment. Knowing that most of the money will be available straight away facilitates growth and helps to drive the business forward.

One disadvantage of adopting this system is that customers may be unhappy with the involvement of a third party in chasing debts. Also, it might be difficult to end a factoring arrangement as the business would need to buy back the value of the sales ledger, which could cause new cash flow problems.

On balance though, anything that improves the flow of cash through a business that’s struggling shouldn’t be overlooked as an option, and might just be the lifeline needed to survive.

Can you really pay off your overdraft in four steps?

overdraft debtIf you’ve been offered an overdraft facility by your bank, you’ll probably feel grateful for the extra financial breathing space it can offer, but there are drawbacks. Overdraft facilities can be cancelled by your bank at short notice, leaving you with the entire amount to pay off in one go or face huge interest charges. So if your overdraft’s become unmanageable, just how do you pay if off for good?

Step 1: Prepare a budget

You need to know exactly how much is going in and out of your current account each month, and without preparing a formal budget it’s difficult to analyse spending. Take firm control over your finances by preparing a detailed account of all incomings and outgoings.

Step 2: Open a second current account

Start afresh with an additional current account with no overdraft facility. Make sure your salary is paid into the new account, and have all standing orders and direct debits moved over. The idea is to recreate your old account, but without the borrowing.

Step 3: Set up a standing order to pay off your overdraft

Check that no standing orders or direct debits will come out of the original account, including annual payments which can easily be overlooked. Now that you’ve got a detailed picture of what you spend each month, set up a monthly standing order to pay a fixed amount off your overdraft.

Even if it’s only a small amount it will steadily reduce the debt and you’ll be able to see exactly how much you owe at any one time. The amount will be isolated in your original account with no other transactions going through.

Step 4: Close the account and save

Once your overdraft’s been paid off, redirecting your standing order into a savings account will give you money for emergencies or as a ‘nest-egg’ for the future. Close the account with the overdraft facility to avoid temptation!