Business with the Donnos
Join the Donno family each week as we share the real highs and lows of running a business together—mixing practical advice with unfiltered stories from behind the scenes of family life and entrepreneurship.
Email jade@1accounts.co.uk with any questions or just DM or comment on our episodes!
Business with the Donnos
The Essential Guide to KPIs for Family Business Success
Key Performance Indicators offer a tangible way to measure business performance and track progress toward growth goals. We pull back the curtain on how these metrics can transform decision-making and provide early warning systems for potential problems.
• Pick three key KPIs to monitor monthly for most businesses
• Financial KPIs include gross profit percentage, net profit percentage, and staff wages to turnover ratio
• Stock turnover rate is crucial for retail businesses to avoid locking up cash in inventory
• Non-financial metrics like customer satisfaction and operational efficiency are equally important
• Modern accounting software and tools like Fathom make tracking KPIs simpler than ever
• Perception often differs from reality—KPIs provide objective data to counter gut feelings
• Regular monitoring allows early detection of issues, as with a client selling products at a loss
• Accurate, up-to-date bookkeeping forms the foundation for reliable KPI tracking
• Team transparency around KPIs creates alignment and shared purpose
• Industry-specific metrics matter—consult your accountant about which ones apply to your business
If you're struggling to identify which KPIs would be most valuable for your specific industry, drop us a message mentioning your business type, and we'll suggest 3-4 key metrics to start tracking.
🎧 Listen now on Spotify & Apple Music and don’t forget to subscribe, share, and leave a review – and send us your questions for future episodes!
Welcome to Business with the Donos, where we talk about family business and everything in between. I'm your host, jade Dono, and I'm here with my dad, paul Dono, and this week we are going to be talking about KPIs.
Speaker 2:Key Performance Indicators.
Speaker 1:Oh, how exciting.
Speaker 2:Absolutely.
Speaker 1:Do you want to explain to all of our listeners what KPIs are?
Speaker 2:Key Performance Indicators.
Speaker 1:Well, do you want to explain it in a way people might actually understand what that is?
Speaker 2:So the KPIs are really, really important for business and I would say for most businesses. Pick three KPIs and monitor them on a monthly basis so that you know how your business monitor them on a monthly basis, so that you know how your business is doing on a monthly basis. So KPIs that we do in one account. We do gross profit percentage, we do net profit percentage and we also do the ratio between staff wages and turnover. They're our main three KPIs. We, we do. We have others on the background. They're our main three KPIs. We do. We have others on the background but they're our main ones.
Speaker 2:They're the ones I really take notice of.
Speaker 1:They're the ones you take notice of, but they're not the ones we actually share with the team on a monthly basis.
Speaker 2:Are they? No, oh, what do we share? I always get it wrong, don't I? They're the ones I do.
Speaker 1:They're the ones you do to yourself.
Speaker 2:Okay.
Speaker 1:She's lovely.
Speaker 2:Indeed.
Speaker 1:But we actually do tax returns completed month by month.
Speaker 2:Oh yeah.
Speaker 1:Turnaround time of accounts.
Speaker 2:Yep, they're good ones.
Speaker 1:What else do we do? Oh, the amount of new clients we get in.
Speaker 2:Yep, they're good ones.
Speaker 1:Yeah.
Speaker 2:Excellent, I didn't know that.
Speaker 1:I did know that, but I kind of yeah, obviously the um we need better communication on what our KPIs actually are communication is good, communication is great. So you said it's a key performance indicator. But like to people, what? Why are they tracking stuff? Is it like to achieve a goal? Is it what? Why? Why do they need to track it?
Speaker 2:so, as an example and we've had it twice this, this, this last week, and, in fairness, james in the office has done a lot of good work on this we've got some retail clients and what we're looking at is how often their stock turns over. So, and why is that important? Well, if you have stock that only turns over twice a year, you're locking up so much cash. You've bought your stock, especially if you're a seasonal business. You've bought your stock up front. You need to sell it, but it's just sitting there. You might, for argument's sake, spend £100,000 worth of stock, but if you're not turning that over quickly, you're not converting it to cash to buy your new stock to earn your profits.
Speaker 1:Yeah, it's just sitting there.
Speaker 2:So a key performance indicator, certainly in a retail business that's selling a product, is how much their stock turns over. Yeah, and I would say, you know, typically if we can get it to six, that would be great. If we can get it to four In some of these cases that would be okay, but even if we can get it even higher than that, that would be great. Which means that people are buying your stock, we know it's working and we're making our margin on it as well. By measuring the other key performance indicator, gross profit percentage, on what profit you're making on the stock and at the end of the day, if you're not turning that stock, sell it, buy, buy different stock, but convert that stock into cash.
Speaker 1:It's no good sitting there earning being dead money yeah, and I think as well um, you don't want to just be thinking of financial kpis. They're really really important. You should absolutely track them, but you need to be thinking of other things as well. So say, you've say, on a month by month basis, you're setting these goals kpis. Say you again are working in a restaurant and there's one dish that you're not selling much of. Maybe that month you have a kpi to sell a certain amount of that dish and you can also do things like customer satisfaction, making sure that your customers or clients are leaving good reviews, and maybe have a KPI to get five, five star reviews every month. Yeah, that sort of thing as well are really important, not just the financial.
Speaker 2:No, absolutely. But go back to the restaurant. A really good KPI for a restaurant is how many covers. But go back to the restaurant. A really good KPI for a restaurant is how many covers, how many people are sitting down and actually attending your restaurant and ordering food. That's a really good one as well. Bring the covers up again. Brings the income through. I'm just laughing because we've got Django, which is your dog, giving us a little bit of a running commentary in the background. So if you can hear him barking, he's got the hump because we've locked him in the kitchen.
Speaker 1:So that he'll be quieter. So he'll be quieter, ironically, yeah.
Speaker 2:So yeah, for those who are listening, that's Django adding to the podcast. So welcome Django to the podcast.
Speaker 1:Oh, poor pup in the other room.
Speaker 2:I think the problem is I gave him treats, didn't I?
Speaker 1:You did, and he wants more treats. You gave him treats.
Speaker 2:Yeah, freeze-dried chicken.
Speaker 1:And he was being really good with the treats and then I was like, well, we need to take him out so he doesn't bark out the window.
Speaker 2:That's because I run out of treats. So maybe a KPI for Django is how many treats it takes to keep him quiet.
Speaker 1:Yeah, there you go Probably a lot.
Speaker 2:But then we need to cut that down, don't we? Just a bit of training A bit of training. That would be good.
Speaker 1:Training who? What? So KPIs aren't just for them, big corporate firms, they're for all businesses, absolutely Big and small.
Speaker 2:Yeah, absolutely. And if things are changing, if suddenly your gross profit percentage ie what you're making from your sales has suddenly dropped, dropped, there has to be a reason for that and then you need to look at that. You know, we spent a lot of time, um, with a client, um earlier on in the year where their gp percentage dropped and what we found was actually they were selling a different product within their range and that was dragging their gross profit down. They actually were selling it at a loss. They would not have known that if we hadn't put a plan in on their KPIs. Yes, no, they wouldn't have known that.
Speaker 2:And we hit it early.
Speaker 1:Yes, we did, and that's really important because, tracking these things, the reality might be different to what you're feeling. Yeah, so like one that we do not. That Dad knew is new clients that we get and Dad was like, oh, we haven't had any new clients, blah, blah, blah, blah, blah.
Speaker 1:And then I sat down and I was like oh, we've had this many new clients this last month and Dad's like oh really, and I'm like yeah, and he's like oh month. And dad's like oh really, and I'm like yeah, and he's like oh. So sometimes you need to attract these things, because sometimes what you're feeling isn't necessarily the reality of the situation and that can work both ways as well. Like you could feel really good. So I know we do like accounts, turnaround time and we could feel like we're really smashing it with that, but then if you actually look at the KPI, it might be that we're actually nowhere near the goal that we want to be. So it might be that we're doing better, but we're not where we envisage ourselves to to be. So it's really important to track and I think it's really important to be really open with your kpis, with your team and and me.
Speaker 1:And you. I am open. I have a full team meeting every month.
Speaker 2:Oh, but you do have to attend those. Oh, okay, I do attend them, do you?
Speaker 1:I've been to all of them, have you? I think you're getting confused with the quarterly meetings.
Speaker 2:Oh, I go to the quarterly ones. Yeah, I try and go to the team ones. Yes try and go to the teamwork.
Speaker 1:Yes, it's easier for me if you're not there to be fair. That's nice, isn't it? That is nice. I don't get bullied. So I think as well with kpis. I think they they really bring focus as well to what you want. So if you've got a goal say you want to grow your business by I don't know 10 then your kpis need to be aligned to that goal as well, so that you are tracking every month or every week how you are getting to that goal.
Speaker 2:So that's really important. I mean, I know the answer to this, but how does someone want to track that? How do they track it? What do they do?
Speaker 1:Well, they can track all sorts of things.
Speaker 2:Yeah, I mean, but a lot of the software, particularly zero, has that information yeah we just need to set it up for the client on how they extract that and then how they can work it, and then we've obviously got tools for the clients we're working with on a, you know, a more regular basis.
Speaker 2:We We've got tools like Fathom that go into it. Give us the reports, give us the graphs, show us the trends and it's quite important, not just on monthly trends but on like a rolling average trend. You know where we might have a little bit of variability, but actually our average trend over 12 months is going up. And we did that about a year ago with someone and that was really powerful, particularly when they were looking at with a third party, looking at their business, and we could show them that actually their average trend was going up and that that's a useful tool and obviously, with us helping to interpret that, um, that in that particular client's case, helped them a lot in some decisions they needed to make yeah, and I think it is important to make those decisions.
Speaker 1:But also, if you are growing, you need to know the why's as well, and that is where your kpis for client satisfaction and team satisfaction as well and the kpis can filter down. So you can have your main ones and you pick two or three really big ones that you want to track every week or every month, um, but you can also have team member kpis that they need to be working towards as well, um, and that's really important too yeah because your team is your, what's keeping your business running for you, and you need to make sure you've got goals and accountability there, and the key performance indicators will help you keep on track of where they're at.
Speaker 1:And one you said which is really important to us is turnover in relation to staff, because all of ours is service-based, absolutely. Turnover in relation to staff, because all of ours is surface service based absolutely. Yeah, we need to know, you know, how much money we're making out of each of our team members, which sounds really you know yeah sort of cutthroat, but that, if you're in a service-based industry, it's really important and a lot of.
Speaker 2:What a lot of people forget is that while we're accountants, we're still a business yeah we've still got to make money, um to be able to reinvest into everyone, to earn a profit for ourselves, um, and to reinvest that into the business. So you know we're not there for the fun of it. You know we we enjoy what we do. We love helping other businesses, but we are a business so we are monitoring everything as well.
Speaker 1:With the background absolutely, and everyone should be really aware of what's going on in their business. And, yeah, saying kpis is a really good way way to do that. Um, so also, oh, my goodness, django's really going for it he is.
Speaker 2:Yeah, he doesn't like it. Normally, josh is at home, isn't?
Speaker 1:he looking after everybody we need to.
Speaker 2:We need to make sure that happens next time. We learn every week.
Speaker 1:This week, Josh needs to be looking after Django I'm trying to fix the 1%.
Speaker 2:The 1%.
Speaker 1:This week is don't shut Django in the kitchen. I might go let him out. Actually in a second, I think he'll be quieter.
Speaker 2:to be honest, I think he's been good background noise really.
Speaker 1:Is he? I think everyone's really enjoying that I can hear people chuckling oh my goodness, oh my goodness, what you forgot to say.
Speaker 2:He's a cockapoo and he's bonkers yeah, he is yeah he is crazy yeah but he's cute, he's really cute he does like um freeze dry chicken as well yeah, which is why he's having a tantrum at the moment not only do I mess up systems in the office, I mess up the systems for the podcast as well, don't I? Yeah, excellent.
Speaker 1:So so with kpis, dad, how, how, what, what are you using to track them? Are you using excel? You're using a mixture of excel and fathom. What are you doing?
Speaker 2:so most of our most of our clients do have zero. You know probably 90% of our clients have zero. The others probably have QuickBooks or they have Sage those reports. She's let Jan go out and he's now huffing and being annoyed. So they have monthly profit loss reports, they have quarterly profit loss reports, they have quarterly profit loss reports, yearly reports, etc. They're really easy to get to and if you don't know how to get to them, we're more than happy to show you and they will show you what, where your trends are for your kpis. Some of them have a percentage and there is a way of getting the percentages, particularly on zero, and I know the others do it as well, and you can use that or you can, if you're a little bit over favor of excel. Doesn't require a lot of work. You can just dump it to excel and then work out your gross profit percentages and net profit percentages and the percentages of what other expenses you want in there.
Speaker 2:It's an easy process, um, and that's probably the longest winded way or you work with ourselves. We use products like Favum. There are others on the market, but we use Favum, we like Favum and at the end of the day, with that, that will run the reports and that will give nice reports on what you need there.
Speaker 1:Yeah.
Speaker 2:The heavy breathing is not me. It's Django, it's Dj Django, he's literally by the microphone now um on the windowsill, I might have to shut him out of this room now.
Speaker 1:No, he's fine. Um, anyway, with with that as well, I think. Yeah, excel is is fine. You can track it on there, makes a nice little graph. But yeah, we use tools like fathom and stuff and if you've got an account and it's worth asking them if they can help you get those a kpis as well, absolutely, yeah, yeah and, and I'm I'm sure they'll they'll help you, and if they don't, then you know where to go um anyway.
Speaker 1:My next point is kpis and family business. How do we have KPIs Like, do you have KPIs for me?
Speaker 2:Do I have KPIs for you? Yeah, no, because you'll just get upset about them. So no, I don't.
Speaker 1:Probably for the best.
Speaker 2:And I don't have KPIs for myself either. That's also for the best. I treat the business as kind of it is our business, so the KPIs I use are what I use for the business. Do we have any specific KPIs for the family business? Probably not. It's more business specific and industry specific as well. So other family businesses that we deal with. You know we would look at their industry and it's really important to look at your industry.
Speaker 1:Yeah.
Speaker 2:And see what is. You know what works at their industry and it's really important to look at your industry, yeah, and see what is. You know what works in that industry as well, yeah, um. So, yeah, in terms of specific for a family business, um, I suppose a kpi could be how many times you tell me off in a week? Um, I really got told off the other day.
Speaker 1:Why? What did I tell you off about?
Speaker 2:no, so I go into the episode that we just moved to Kayla, who we love yeah, she's great she deals with my hearing aids. She moaned at me for not having hearing aids. That was as I walked in the door go into the office. Shay moans at me for making a mess in the office that she's just created. So maybe I should have a KPI on how many times I get told off in a day.
Speaker 1:Yeah, I can have a KPI for how many times I tell you off in a day.
Speaker 2:Yeah, I'm not sure Excel's got enough power on that, I don't think it's got enough cells.
Speaker 1:No, I think, though, with the family business, with stuff like KPIs, it's just so important to be open and honest about everything, and that is how you get through it. Like, if you know, if you're tracking a KPI that you know, like, say, I knew like Katie was accountable for like it's not good enough to just sit on it. I would need to go talk to Katie. Otherwise, it's going to ruin family time as well, because I'll be sitting on it stewing, and it's going to ruin family time as well because I'll be sitting on it stewing. And it's important to go talk to them.
Speaker 2:I think one of the KPIs that's not working for us at the moment is our marketing, isn't it? Yeah, we've employed a marketing company. I think the strategy is wrong.
Speaker 1:Yeah.
Speaker 2:We've now agreed that the strategy is wrong and our KPIs are not where we wanted them to be. No, they're not so you know that is specific to us in a specific area. We've looked at and as a family we agreed to go down this particular route and we're now addressing that.
Speaker 1:Yeah.
Speaker 2:So I think you know, that's kind of areas where we need to be a little bit more specific and open about that.
Speaker 1:Yeah, I think so as well. And yeah, with this particular marketing company, they've, they're, they're doing like our SEO and our website. So I think the strategy was right at the beginning of the year, but now it's not right yeah at this point with AI and whatnot um the money should be invested elsewhere, and that is the sort of conversations that, yeah, yeah, we're having.
Speaker 1:But, like, dad came to this conclusion probably a month before me, and Katie did, because we worked so hard to get a marketing company in the first place. So then to have to admit that Dad is right is not something we're all for.
Speaker 2:I mean, I know you want to put this podcast on YouTube, but I think the listener out there probably can see my very smug face at the time.
Speaker 1:It's too smug and I can't believe.
Speaker 2:You said I'm right publicly.
Speaker 1:I don't know I can edit it out. I have those skills. Okay, and Katie, even more than me, was trying to hang on for dear life.
Speaker 2:Katie would be going. Oh no, jade, why did you tell him he was right?
Speaker 1:I had to phone Katie up and say, katie, I think we've got a problem, and she's like what? And I was like I think dad's right. And she's like oh no, Jade, doesn't happen very often, everyone.
Speaker 2:And that's flagged because the KPIs we set haven't worked.
Speaker 1:Yes, yes it is, and before we, because you have to give things like SEO a bit of time, and I think me and Katie were hoping that with a bit of you know building, it would pay off, and it's just it's not going that way, unfortunately. So, yeah, we've had to admit defeat, and that is the sort of thing you get in a family business Like you have to not only admit that you're wrong, you have to admit you're wrong to your parents.
Speaker 2:That's no fun. Well, you know, we just sit back and wait for you to admit all your children, as you have to do all the time not sure I've done that probably not.
Speaker 1:Probably just stormed ahead anyway. So, yeah, all right. So what are your top tips for our listeners in terms of KPIs?
Speaker 2:So the main top tip is to know your numbers and that's the top tip we give all the time and that's really going throughout. Our entire business is getting the clients to know their numbers, keeping completely up to date with your bookkeeping yeah often, often treated as a last thing. Once you've got all that and you've got the data, then you can do your kpis and you know that you're relying on current data and up-to-date data. There's no excuse. Nowadays, the software is capable of helping the support is there.
Speaker 2:You know we run a bookkeeping service to give that up to date service. It's not mega expensive nowadays. It used to be when it was all manual but a lot of our stuff is can be automated and it and it and it is quite cost effective for people. Um, and you know, I would say, get a really good bookkeeper.
Speaker 1:Yeah.
Speaker 2:Get your, make sure everything's up to date. Sit down with your accountant, look at your industry, look at what works for you in terms of KPI, discuss it. You know we do have a lot of knowledge. You know, and and your accountant out there will also have a lot of knowledge would have dealt with a lot of different industries. You know a lot of knowledge. Would have dealt with a lot of different industries. You know, um, unbelievably, this uh retail client we had the other day didn't know what stock turnover was in his industry no, well, you don't get taught this stuff, do you?
Speaker 1:and?
Speaker 2:I. One of my questions was well, you know, you, you go through a buying group, etc. What do they say? They come back with a really low figure, but they would do because they're they're the rep, um, but you know, we now give the tools for them to challenge that type of person, and I think that that's really, really important you know, and it's not the only industry that we've.
Speaker 2:We've done that too. Um, okay, buyers out. You know buyers out there and sales reps out there might not like us, but it's up to us to give our clients those tools to challenge.
Speaker 1:Yeah, and I think as well. Finances and numbers completely overwhelm people. I think you're taught in school that it's really really hard and also accountants for years have made it seem really really hard well it's a little dark art, isn't it?
Speaker 1:it's like a little dark art in the background and, in reality, if you understand it, if you make the time to try and understand it, it's not. It's not as hard as it seems. Not the stuff like the gross profit percentage and the things like that, the the things that you can track and understand about your business. Yeah, it's not that hard and like I'm so, currently I'm studying towards my mba, which is a master's in business are you?
Speaker 1:I am, yeah, I don't know whether I mentioned it anyway my, I get a first on your.
Speaker 2:I did.
Speaker 1:I did get a first in the first module yeah, you never told me oh, no, no, I kept, really kept it to myself. Yeah, anyway, I'm doing the finance module now. Are you? I am, which I'm not an accountant that's terrible.
Speaker 1:I'm not an accountant, so like it's, it's fine, it's a bit dull, everyone, um, but I'm in a cohort with with a of other people, some business owners, and then also I've got a lot of people who are in the public sector, so people working for the council and the NHS, and so I've got in this cohort some really intelligent people, like people that everyone would say like if you're a doctor, you're very intelligent. Like you think yeah, they're really, really, really smart. And the finance module is blowing people's minds and like all they're asking them to do is to do a calculation on gross profit percentage, which is like it's not it's it's not a hard calculation. I think it's like dividing and then times in by 100. Like it's not difficult. Yeah, thank you, it's not that difficult, but it is absolutely blowing people's minds because everyone's like it's maths and it's not that difficult. But it is absolutely blowing people's minds because everyone's like it's maths and it's finance. Therefore, it is difficult.
Speaker 1:Move that to one side and actually look at it and you'll see it's not a dark art and you can understand it and you'll be fine. Like it's not, it's not too bad, and that's coming from me who did musical theatre. So take it from me. It's not a dark art. You can understand your business and you can understand your numbers. You might not be able to produce a set of accounts, but you don't need to do that. You employ someone to do that. You don't need to produce a set of accounts, but you can at least be part of a conversation that understands these metrics.
Speaker 2:You need to challenge, yeah, you need to challenge absolutely and understand. Yeah, you're right, make that understand. You know we've got, you know, a particular client who does challenge a lot and sometimes gets under your skin with the way they challenge, but they're only trying to understand what's going on with their business yeah um, and it's our job to help them understand that and to answer those questions, and there isn't such thing as a daft question no, absolutely not how many clients have we had sort of in front of us going oh this is really daft question and I really don't mean to sorry to ask this.
Speaker 2:It's not a daft question because it's it's. You know, it's causing them an issue and we're happy to answer it.
Speaker 1:Yeah, and yeah, there might be some what might be some sort of what we feel is basic questions, but it's not to them so you know and we wouldn't be able to do half of our clients I can't build a wall no, like it's it can't put a shell. People should ask questions and you know we're all learning all the time. So, yeah, ask the questions, but equally like I think this is a different point of view from your customer service within your business also, understand that your customers and clients don't necessarily understand what you do either, and to make sure that that is coming across, yeah yeah that's a.
Speaker 2:That's that's yeah that is definitely right. We do a lot of things that in the background that our clients are not aware of and that needs to be communicated across. We work really hard to try and do that, but we don't always get that right.
Speaker 2:What we think is easy because we've had years of training, you know, and you know most of our team have got good qualifications behind them um and have had that training, but they treat it as an easy thing and the client's not really aware that actually that needed quite a lot of work to do that, yeah, absolutely.
Speaker 1:Um, so as well with with kpis. My last little tip for that is to make sure you are involving your team, being really transparent absolutely um telling me telling you yeah, telling you the kpis is always good, and to also review them regularly.
Speaker 1:and I think if you're struggling to pick what kpis you want to track, just give us a message and let us know what industry you're in and we can let you know three or four KPIs we think would be good for you to track. You can just message us and, yeah, I'll give you a hand. So do you have anything else on KPIs you want to say?
Speaker 2:No, I think we've exhausted KPIs. I think so too.
Speaker 1:That's a lot, isn't it? Yeah, okay, so now for our unfiltered minute.
Speaker 2:Unfiltered minute. Yeah, oh, my goodness so.
Speaker 1:I do have a bit of a rant this week, so my rant is at company's house. My rant was at company's house as well. No, it wasn't. Oh. No, you had a different rant. Have I got a?
Speaker 2:different rant. I think so Okay. I think so Okay, but I am in a joint rant on this one.
Speaker 1:Yeah, this is a big rant. This is really annoying. So for a little while now we've known that companies' sales are changing what they're doing, so now they're going to make sure that all directors of limited companies have been.
Speaker 1:ID'd, yeah, which is fine, and we ID everyone anyway, because we have to as accountants, regulated accountants we have to with um, as accountants, regulated accountants, we have to make sure everybody is id'd and that they're um, you know they are, who they say they are.
Speaker 1:We have to do all that anyway. So we were like, oh, this will be fine, lovely, anyway, companies house decide they're going to email every single director of every single limited company on tuesday, um, but they're not going gonna tell our software companies how we can actually upload the IDs or how we can actually have a process for this and and this comes in in the autumn, so we've got time to figure this out. So this has sent the accounting industry into a spiral this week because everybody is like what do we do? I've spoken to two software companies, both who are telling me that I need to go to the other one to do it, um, and I'm sure I'll get clarity. This is because they haven't had clarity from companies house of what the api is going to look like for them to plug into it and the emails are just nightmare, absolute nightmare.
Speaker 2:I mean literally. Just as we walked in here, we had an email from a client. Is this spam? Yeah you know, it looks like spam yes, the way it reads it looks like spam. This client obviously doesn't read our loads of emails we put out and our newsletters that we put out, telling people it isn't spam but we're dealing with it. But they're just putting this stuff out. It's unsolicited and it's an absolute nightmare yes and it's.
Speaker 2:We're having to answer clients who are saying is this spam? It's not spam, but now that that's going out, there is more than likely going to be a lot of spam yes so there is.
Speaker 1:It's just shocking it is and like it's just been a, it's been a whole hoo-ha this week. Yeah, there's no other way to describe it. It's been a hoo-ha, and for our clients, we want to make sure that we can absolutely help as best that we can, um, and so we are researching into exactly how we can do this on behalf of our clients but we're registered now.
Speaker 2:Yeah, we are registered as a a csp something whatever it's called, but we're definitely, we're definitely a company house approved accountants. Now we can yeah? Submit the id on behalf of our clients. We can make that process more streamlined. And again, it's another service we can help our clients with yeah that's because our money laundering regulations you know we're monitored by aat for our money laundering um, so that has allowed us to register yes, it has so it seems to be.
Speaker 2:It's the yeah, there are some people can be um, you know, approved by hmrc, but it seems to be that this is the start of, you know, proper, registered, regulated accountants being able to provide a service um that some may or may not be able to in the future yeah, I actually think it's a good thing for companies.
Speaker 1:It's just been a like ideally, a little bit of warning would have been nice well, I think this goes on to my rant okay, you, you do, your, your, my rant did include companies house.
Speaker 2:But making tax digital, rant number two love the um, our government, that's another rant. So clients now get emails. So property people and sole traders get emails to say you need to register at Making Tax Digital. Making Tax Digital is coming next year, you need to submit everything quarterly, etc. Etc. We are now getting emails going and we're saying well, what's going on? Have you got pricing for this, etc? We haven't got pricing for this, etc. We haven't got pricing for it because the software companies have only just provided a service that we think is reasonable and can be cost effective yeah, you know, you're very much in the process of getting a service made up but yet again they're getting these emails that are saying you need to do this, and without getting questions yeah and it's just horrendous.
Speaker 2:And on top of that, to me at the moment it feels like we're back at covid yeah, it does there is one thing after another of regulatory change. I mean rachel from accounts. I mean, you know she said the economy's shrinking. Oh, what a surprise. We've just put 15% on national insurance and dropped the thresholds. We're dealing with that at the moment. You know, we're dealing with emails from Companies House. We're dealing with emails from HMRC that are all putting pressure on us as a business support service. You know, that's what we are.
Speaker 1:Yeah, yeah.
Speaker 2:And we're having to get answers straight away when actually our software companies don't have the answers. Hmrc and Companies House don't have the answers, yeah, and we're expected to have the answers, yep. So I just feel like we might as well be in the start of a pandemic again. That's my rant.
Speaker 1:No, I get it. It has been just one thing after another after another, and normally it's all fine. We are well aware of MTD. We're getting something together, but it doesn't come into play until April next year, so we've got a lot of time to make sure we've got the right solution out there. What we didn't want to do is get something out there to all of our clients and it be wrong, because that could have happened as well and HMRC have pushed MTD back. What four times.
Speaker 2:Yeah, so we've been in this process a couple of times now. We've had to pull back on the effort we've put in. Yeah, I mean, we spent a fortune on a marketing campaign a couple of years ago and then nature pulled it yeah will they pull it this time? I don't think so.
Speaker 1:I don't think so, but you know, who knows, who knows?
Speaker 2:it's just, um, just seems a little bit relentless at the moment, and in mtd in particular. You know I know sort of ian phillips from zero when we did that thing. Um, you know that course with him some accountants are doing like a race to the bottom. You know they can do mtd for a price that we can't even touch. Yeah, it's not going to be right, you know it's. The files are not going to be right. Um, from account. You just cannot cost effectively do it. So we've got to get our pricing right as a business to give the service and the support that the clients need.
Speaker 1:Yeah, and I think that's really important as a business is to not always look at whatever you've got, to know what everyone else is doing, but to not always try and match it, because if you're not going to make any money, what is the point at the end of the day?
Speaker 2:yeah, and it's not right for the client that mtd is there just to. I mean, there are probably a couple of reasons and the cynic in me says it's to collect money earlier. But that's not on the cards at the moment, but I think that'll be later on um. But you know if if small sole traders are having to do MTD, then they're having to keep their software up to date. So maybe they'll start to take a little bit more notice and then maybe they will um have better businesses in the future.
Speaker 1:Yeah.
Speaker 2:But only if they want it. You know a gardener, for argument's sake, might be doing their business to. You know cut people's grass. You know tend their flower beds et cetera, but that's all they want to do. They don't want to grow the business, they don't want to sell the business. It's their lifestyle and they want to do that. Why on earth are they then chucking them on? You know software and we're doing this, so you've got to report this quarterly, etc.
Speaker 2:That's not their bag and they're going from probably spending 400 quid a year on a tax return to nearly a thousand pounds. I mean, why is that fair?
Speaker 1:and also, if you are a sole trader and you are just a gardener like that and you are listening to this podcast, be aware of MTD, because your accounting costs are going to go up. Whoever you, your accounting costs are going to go up. Whoever you're with, they're going to go up because this quarterly reporting is four times the amount of work you would have had to have done before absolutely and it's yeah you really need to look into.
Speaker 1:Yeah to that, and we'll be putting out a load of information as one accounts um and no doubt we'll have a podcast so, uh, we'll probably have a podcast and we'll probably have another podcast and we'll probably have a real another rant about it, to be fair. Um, so yeah, yeah, and I mean like us keeping on top of these changes. We know that this could be an opportunity for us as a business. That's a good thing, but it's also we just feel for the, the people that it's impacting. It would have made more sense to hit corporation tax first, if they're making all taxes digital yeah, yeah that's not the way they've gone, so 50 grand turnover first year
Speaker 2:yeah that includes property yep 30 grand the year after, 20 grand the year after, 20 grand the year after. That's turnover. Yep, you know bonkers.
Speaker 1:Bonkers, if you have any questions on MTD and you're not getting any support from your accountant, again, just message us and we'll give you an answer.
Speaker 2:Absolutely. You don't have to be a client. We're more than happy to help.
Speaker 1:Absolutely. Just message the podcast and we'll give you some help. Okay, so, lastly, I have a listener question and now it's really important if you're listening to this podcast and you have a question, please message it to me so that we can highlight it on the podcast and we can answer it and if you do own a business, put your business name in there and I will make sure to plug that in our podcast too.
Speaker 1:So, please, please, please, send me questions. Um, but this question is and this was um sort of out of a conversation that we'd had at work, so I've sort of framed it to fit the podcast um, it said how do I know if the changes I'm making in my business are actually working? So our last podcast, episode five, was all about change. So, um, this was like well, jade, I'm making changes, but how do I know they're working, which fit very nicely into this podcast.
Speaker 2:Well, I mean, the simple way is that the next time you have your meeting with us, we go you've done really well and those changes you've made are working really well. So that's a start.
Speaker 1:Yes.
Speaker 2:Some people might say well. Well, actually, I've got more money in the bank. I've taken more money myself. Um, I'm getting better leads. I'm getting better quality work yeah you know.
Speaker 2:So these are all changes that we help with, that that you can start to see, um, and if you're going through our program, you know you're starting to see, and if you're going through our program, you know you're starting to see your balance sheet change. Now that's quite a like whoo. He's talking about balance sheet. That's a dark art. But we're really working hard to teach our clients what a balance sheet is, what a positive balance sheet is, and we just work with them to say, right, if you make this change, this will make this difference to your balance sheet.
Speaker 1:Maybe we'll do our next episode on the balance sheet, because this, literally it confuses so many people. No one understands their balance sheet, or some people do I like I would say 20 of our clients probably actually understand what their balance sheet is.
Speaker 1:Everyone else glazes over when you bring up the balance and they all think about profit, but the balance sheet is such an important document yeah, but we'll talk about that next episode because I think it's really important and I want to make sure that everybody can understand it in a simple way and not be overwhelmed by the confusing jargon and terms of phrases that's on there when it's not too difficult.
Speaker 2:Josh has just got home, which means django is going to be noisy no, not just that, he hasn't cleaned that bird's poo off the top of your car he's gonna be in so much trouble, so there you go he's looking at me. We we best stop there before, before josh knocks on the door and django goes well one before we do stop, if you want to track the changes you're making.
Speaker 1:Also, if we go back to the original topic, have some KPIs Absolutely and then you'll be able to know. But anyway, before Django decides to go absolutely crazy, thank you for listening to our podcast. There he goes. Please subscribe, leave a review and share this podcast with a business buddy. Next time Django will not be allowed in the podcast and we shall see you next week. Goodbye.