groforth

We Are Hiring: Senior Bookkeeper

michelle.collins@groforth.com (Michelle Collins) — Mon, 14 Jul 2025 09:46:28 GMT

GroForth is on the look out for a Senior Bookkeeper to join our team. The successful candidate needs to be detail-oriented, highly-organised, and ready to contribute to a company that values accuracy and efficiency.

If you thrive in a fast-paced environment and enjoy supporting business growth with solid financial reporting, this role is for you.

More details on the role as follows:

Overview:

Integrated data entry using latest technology to populate accounting packages such as Xero or similar software, including purchase and sales invoices.
Prepare and review VAT Returns accurately and timely for a portfolio of clients.
Carry out bank, debtors, and creditors reconciliations, and reconciliations of various other balance sheet accounts.
Ensure adequate processes and procedures are being followed.
Assist in preparing accounts up to trial balance stage.
Communicate directly with clients to ensure information is received and deadlines are met.
Experience of VAT/VIES/RCT/RTD & PSWT.

The Ideal Candidate:

Minimum 3 years’ experience working in a Bookkeeping Firm or similar.
Experience in Bookkeeping IT Systems such as Xero, SortMy Books, Excel & ROS etc
Experience in producing returns for VAT/VIES/RCT/RTD & PSWT for clients.
Good interpersonal and communication skills
Experience working in a fast-paced environment and ability to meet tight deadlines

Benefits:

Hybrid WFH available after induction period
Very flexible working hours to suit lifestyle
37.5 hour working week
Working with the most up-to-date bookkeeping technology
Attractive remuneration package based on experience
Opportunity to progress

To apply, please send a cover note and copy of your CV to michelle.collins@groforth.com

Advantages and Disadvantages of Cloud-Based Accounting Solutions

Sat, 17 May 2025 14:22:50 GMT

Michelle Collins explains some of the issues to consider when thinking about switching to a cloud-based accounting system.

In recent years, GroForth has supported many clients who have moved to cloud-based accounting solutions. Often, the reason for the move is that as businesses grow, they find it difficult to keep on top of their administration. Rather than hiring accounts staff, it is often more efficient and cost-effective to adopt cloud accounting. However, the cloud is not for everyone so, as always, you need to weigh the pros and cons for your business.

Advantages of cloud-based accounting systems

Probably the most common reasons why GroForth clients turn to cloud accounting solutions are that they want to improve efficiency or that they need more up-to-date, better quality financial information. Other advantages cited by clients include:

Cost effective: For many businesses, cloud-based solutions are more cost effective than having an in-house accounts executive or accounts department. Cloud solutions operate on a subscription basis with the price depending on the number of users and the modules required. Entry level costs are typically around €20–€50 per month.
Ease of use: Cloud systems usually have easy to navigate user interfaces and many have mobile apps which allow you to access your accounts on the go.
24/7 access: A big advantage for many clients is the ‘always on’ availability of their financial information. Important indicators are often displayed on a dashboard so that you don’t even have to go looking for them.
Realtime information: Another big advantage is that ‘real time’ information is available provided that you input your data on a timely basis.
Streamline processes: Many clients find that cloud-based systems help them to streamline processes, eliminate duplication and allow faster collaboration between teams.
Security and backups: The cloud-based solution provider looks after security and backups so once you are satisfied that their processes meet your needs, this takes away the headache of having to keep an in-house accounts system updated and secure.
Ability to expand as your business grows: Scaling up is easy when you are using cloud-based systems. Usually it’s just a question of increasing your monthly subscription.

Disadvantages and risks of cloud-based accounting

As mentioned at the outset of this article, cloud accounting is not suitable for everyone so it is important that you investigate the risks as well as the advantages before deciding to switch to a cloud-based solution. Set out below are a few key risks to be aware of.

Internet / Broadband speed: Cloud-based accounting requires a good Internet connection — otherwise slow speeds could impact efficiency and/or you could be affected by outages.
Data security: This is extremely important so you need to be confident that your provider adheres to high standards. In addition, you need strong discipline around things like controlling access so that when staff leave, for example, their logins to your system are removed.
GDPR: Again, this is very important especially if the solution provider that you choose could involve having to transfer data out of the EU.
Brexit: We don’t yet know what future arrangements will be in place around data and digital services.
Vendor lock in: Some clients worry about this in case they may need to switch to an alternative solution provider in future.
Lack of customisation: This is usually more of a concern for large organisations with legacy systems.

Choosing a cloud-based accounting solution provider

GroForth clients use a broad range of cloud-based accounting solution providers and we have experience with most of the commonly-used systems including BrightPay, SortMyBooks, Thesaurus and Xero. We also use various other cloud-based solutions such as payroll and banking solutions that integrate with our clients’ accounting systems.

If you are considering switching to the cloud or would like more information on the topics discussed here, please get in touch.

Can working from home improve productivity in accounting firms?

Tue, 11 Mar 2025 11:47:17 GMT

Lessons learned during the Covid-19 lockdown could lead to lasting changes in some accounting firms, says Sarah Daly.

For the last few months, accounting firms across Ireland have been forced to work from home due to Covid-19 social distancing requirements. While firms that already use technologies like cloud accounting have managed the transition reasonably smoothly, others have had to adapt their processes and procedures rapidly in order to cope.

How technology helps improve productivity in accounting firms:

As an early adopter of technology ourselves, GroForth understands the benefits that IT can deliver. So, it came as no surprise to us that cloud-based applications were a key enabler of working from home for our accounting firm clients in recent months.

Software products like Xero and SortmyBooks are real time-savers in busy accountancy practices at the best of times, but their 24/7, ‘work anywhere’ functionality really came into its own when the pandemic forced firms and their clients to work from home.

Likewise, accountants are finding that applications like Zoom, Skype for Business, Microsoft Teams and Slack enable them to support their customers online while teams can communicate and collaborate effectively in real time.

Admittedly, with more people than ever working from home, there have been challenges when it comes to ensuring staff have access to suitable equipment and controlling and securing remote set-ups, but accounting firms are not the only ones facing these challenges. Generally, firms are willing to seek out solutions and adapt rapidly and, when it comes to workers, a recent study by the Whitaker Institute found that more than three-quarters (78%) would like to continue to work remotely after the crisis is over.

How working from home boosts productivity:

Another interesting lesson from the Covid-19 working from home experience is that remote working appears to boost productivity for some employees.

There are several reasons why this is the case.

Less time spent commuting: Various studies have shown that long commutes are stressful for employees, so it is not surprising that eliminating commuting is one of the factors that helps boost productivity. Less time spent commuting also means that workers have more time to enjoy leisure activities so there can be a strong personal incentive to complete work faster.
More time spent working: When employees work from home, they may take fewer breaks, or shorter breaks. This, combined with less commuting time, means employees often log longer hours when working from home.
Improved concentration: While not all workers have a suitable home environment, those that do find it quieter than working in a busy office. This helps improve concentration and focus which, in turn, enhances productivity.
Better work/life balance: Simple things like being able to exercise during the day, do the shopping or put on a load of washing at lunchtime, can contribute to a better work/life balance. This can help employees feel less stressed out by conflict between their home and work responsibilities.
Reduced absenteeism: Firms also say that their employees appear to have fewer sick days when working from home.

Of course, not everyone is more productive. For some workers, their home environment is simply too small. Others dislike the isolation and miss the social aspect of being in the office. Variables like having young children can limit productivity as employees may be tired or stressed from having to work before children get up or after they go to bed. But, for the most part, GroForth clients find that the benefits of working from home outweigh the disadvantages. What’ s more, accounting firms are telling us that their employees appear more positive and productive because they feel their work/life balance has improved.

Strategies to improve productivity:

On a personal note, one practical tip that helps me improve my own productivity is exercising early in the day. I find this is energising and helps me stay positive.

If you are lucky enough to have more time on your hands than usual at present, another practical tip is to use this time to benefit your business. I recently shared some ideas on how to do this in an this article on using time wisely when working from home.

As well as working to improve your personal productivity, there are practical steps you can take to help your employees be more productive while working from home. These include:

Recognising that employees may be experiencing conflict between work and home life if they have young children at home or are looking after older relatives. If you are willing to be flexible—for example, by allowing employees to work outside of normal office hours—this can help improve their productivity.
Ensuring teams have adequate equipment and support
Encouraging team members to set up a dedicated work space in their home
Encouraging team members to schedule their work time, take regular breaks, and set boundaries so that work does not encroach on personal time
Organise regular check-ins with team members
Set clear goals, monitor performance and provide feedback

While working from home is likely to continue indefinitely for many workers, some employees will need to return to the office. My colleague, Nikki Johns recently discussed this in article on the Government’s Return to Work protocol.

Finally, remember to be kind to your employees and yourself. Don’t beat yourself up if you find it difficult to get time to work on your business development and strategy at present. Time constraints are a huge challenge for partners and managers in many firms. Indeed, research recently conducted for GroForth found that this is the single biggest problem accountancy practices face. Outsourcing can be one way to free up time and enhance productivity.

As a provider of specialist services for accounting firms, GroForth has seen increased demand for our services since the Covid-19 pandemic began.

If you’d like information about these services or would like to know more about how GroForth is helping firms like yours, please get in touch.

Why Are You Ignoring Your Pipeline?

Thu, 12 Dec 2024 15:56:35 GMT

Feedback from potential clients can provide valuable information for improving your products and services as well as highlighting opportunities to boost your revenue. Yet many businesses fail to manage their pipeline effectively and miss out on these opportunities as a result.

Your sales pipeline is an important source of information for planning and budgeting. So, when working out your budgets and forecasts for the new year, it is important to make time to review your pipeline and see if you can identify ways to improve it.

Key questions to ask include:

What do you expect to sell next year?
To whom?
When?
At what price?
What volume?

You also need to look at your input costs. To what extent will these be affected by inflation? Do you have sufficient people/resources to deliver your products/services or will you need find additional capacity? If so, how will you fund this?

Impact of uncertainty on your sales pipeline

Uncertainty is a huge factor at the moment because of the upheaval business experienced over the last 18 months.

Have any of your prospects disappeared due to the impact of the Covid-19 pandemic, Brexit, or other external factors?
Have any new prospects emerged?
Are you still targeting the right customers?
Do you have any new competitors?

These are all questions to think about when you are working on this year’s budget and plans.

Realistic forecasts

It’s important to be realistic when forecasting. Your forecast should be based on the sales that you are confident you can secure in a given time period. Remember to assign responsibilities, monitor progress, and keep a keen focus on controlling your input costs.

Accounts and payroll information

While your sales pipeline is an important source of information for planning and budgeting, accurate bookkeeping and payroll information is also crucial. It’s important to ensure that there is a good flow of communication between your bookkeeper and accountant. This is because while your accountant is usually the one person who really understands your business, they rely to a great extent on the information you provide to them. So, if this information is incomplete, inaccurate or out of date, it will affect your accountant’s ability to help you. If you need support or advice on how to improve your bookkeeping and payroll processes, contact GroForth for assistance.

Finally, remember neglecting your pipeline is a missed opportunity. So the lesson is, stop ignoring your pipeline!

Checklist for Changing Your Payroll Service Provider

Thu, 12 Dec 2024 15:51:04 GMT

If you intend to change your payroll service provider, there are some practical steps that will help you achieve a smooth transition, says Michelle Collins

The end of the year/beginning of a new year is probably the best time to change your payroll provider. But before deciding to make a change, it’s important to establish if your existing supplier knows that they are not meeting your requirements.

Have your spoken to your existing payroll provider about the problems you are experiencing?

If your existing payroll company has been providing support for a period of time, it’s likely that they have a reasonably good understanding of your business. So, if they are not delivering the services that you require, it could be that they don’t realise their offering doesn’t match your expectations. It is worth having a conversation with them to find out if they can up their game. However, if they don’t have the skills or capacity that you require then you probably need to switch to another company.

Timing the switch correctly

Usually, the end of the year is the best time to make the change as the initial set up will be less time consuming for the new provider. Getting the timing right is very important. (See our previous blog on choosing the right time to change your payroll provider).

Checklist for switching your payroll provider

Once you make up your mind to switch, there are a number of practical steps to take in order to achieve a smooth transition. Here is a checklist of seven key points to cover:

Check the contract with your existing provider. What is the notice period? Are there any exit fees or penalties? Are there any other conditions you need to comply with?
Research potential providers. Check that they are properly qualified to deliver the services that you require. Questions to ask include: Can they provide all the services that you need? Do they have adequate staffing and resources to cope during busy periods or when a staff member is absent or ill? What payroll software do they use? Is it compatible with your software and systems? Do they have adequate data security measures in place? Will they provide a dedicated contact for your business? How will they cope if your business requirements increase or change in the future? (This can be very important if your business is growing and your payroll is likely to expand). How will they liaise with you and your team? Will they liaise with Revenue on your behalf?
Make a list of any software or apps that you use which integrate with your payroll process. You may need to allow time to make changes to these in order to keep things running smoothly.
Once you have a shortlist of potential future providers, check how their services compare with your existing provider. This will help you to confirm that their offering is a better fit for your business requirements.
When you select your new provider, you will need to find out what information they require from your existing provider. Collect all relevant information before switching as this will help avoid problems down the line.
Choose the right time to notify your current provider that you are switching.
When everything is in place, you then need to notify your employees so that they know that they will be receiving email and/or other communication from the new provider. Your employees may also require training on the new system depending on how it interacts with your existing systems for things like recording annual leave, overtime, commissions, sick absences, etc.

Payroll problems can be very time consuming when systems do not run smoothly so it is worth taking the time to choose the best possible provider. Changing to a new payroll company is a good opportunity to resolve existing problems and get a service that fully meets your needs.

For information on the payroll supports that GroForth provides, please check our Payroll Services page or contact me to request a quote.

5 TIPS TO GET 2025 OFF TO A GREAT START

Mon, 02 Dec 2024 09:00:03 GMT

Those quiet days at the end of the year can be a great opportunity to do a bit of administrative housekeeping. It might seem boring but you’ll thank yourself when you’re doing your tax return next year! Here are five suggestions to get started:

Run an eye over your 2024 purchases to check everything is recorded and correctly coded. Now is the time to chase any missing documentation, fix errors and get everything ship shape for your accountant.
Review what you spent in 2024 and use this information to help you budget more accurately for 2025.
Check what you are owed and work out where you need to follow up on late payments. If you hate chasing customers, consider letting our credit control team do the chasing for you.
Look for opportunities to streamline processes. Consider outsourcing non-core functions like payroll and accounts if this could free up staff time for higher value activities.
Evaluate the information that you get from your existing systems. Is it helping you to manage your business or is it taking up too much time and just generating administrative headaches? Many GroForth clients say their profitability improves when we prepare monthly management reports and data analytics for them. If you’re not already availing of this service, contact us for details.

We always say that the time you invest in reviewing your business is never wasted. Indeed, it often highlights opportunities to save money and improve profitability. If you are interested in finding out more, drop us an email and we’ll be happy to explain how our team can help you streamline administration and boost efficiency in 2025

Budget 2025 – What Businesses Need to Know

Wed, 02 Oct 2024 11:25:27 GMT

Yesterday marked the 1st of October, the official starting point for Q4 and budget day 2025. During the course of yesterday afternoon, Minister for Finance, Jack Chambers and Minister for Public Expenditure, Paschal Donohue announced a series of measures directed at “putting the country on a firm footing for the future”.

Below is a summary of the key announcements related to business operations that you should take note of:

Income Tax:

The Universal Social Charge (USC) will be reduced from 4% to 3% on incomes of €25,000 to €70,000.
Entry threshold to 3% rate increased by €1,622 to €27,382
The national minimum wage will increase by 80 cent to €13.50 per hour from the 1st of January 2025
The main tax credits - Personal, Employee and Earned Income Credits - will increase by €125
The Standard Rate Cut Off Point will increase by €2,000 to €44,000, with proportionate increases for married couples and civil partners
For Capital Gains Tax (CGT) Retirement Relief, the higher age limit will stay, but if you sell assets worth over €10 million, there will be a clawback period of 12 years. After this period, CGT will no longer apply.
The Capital Gains Tax relief for investors in innovative start-ups will be improved. The lifetime limit on gains eligible for relief will increase from €3 million to €10 million.
For Research & Development (R&D), the tax credit’s first-year payment threshold will increase from €50,000 to €75,000. This will help smaller companies or those using the credit for the first time.
Small Benefit Exemption:
Employers can now give workers non-cash benefits or rewards worth up to €1,500 (increased from €1,000) without having to pay income tax, PRSI, or USC on it.

Company Cars:

The €10,000 universal relief for company cars will be extended for another year. Employees with an electric company car will get a total benefit-in-kind (BIK) relief of €45,000 in 2025. This includes €35,000 for electric vehicles and the extra €10,000 temporary relief. Additionally, there will be a BIK exemption for installing electric vehicle chargers at the homes of employees or directors.

Other Supports:

The Employment Investment Incentive, Start-Up Relief for Entrepreneurs, and Start-Up Capital Incentive will be extended until the end of 2026. The maximum amount an investor can claim under the Employment Investment Incentive will double from €500,000 to €1 million. The relief available under the Start-Up Relief for Entrepreneurs will increase from €700,000 to €980,000.

VAT Registration:

The VAT registration thresholds are being increased. For the sale of goods, the threshold will go up from €80,000 to €85,000, and for services, it will rise from €40,000 to €42,500.

Stock Exchange:

A new relief is being introduced to cover expenses for companies listing on an Irish or European stock exchange for the first time, with a limit of €1 million.

Need help?

We understand that getting a handle on budgetary changes can be daunting particularly when it comes to managing your payroll obligations. If you have questions or need help setting up or running your payroll processes, GroForth can provide practical support. Contact us for details of our payroll services.

Sources:

https://www.rte.ie/news/budget-2025/2024/1001/1472970-budget-2025-summary/

https://www.irishexaminer.com/business/economy/arid-41487173.html

Payroll Basics for Employers

Thu, 05 Sep 2024 09:47:19 GMT

When you employ staff, you must operate your payroll correctly in order to comply with Revenue and employment rules and regulations. In this article, GroForth’s Michelle explains:

• What you need to know about taking on a new employee

• Why your employees need to register for MyAccount

• The difference between net vs gross pay

• When to deduct Emergency Tax

• Employee tax credits

• PRSI — Pay Related Social Insurance PRSI for Employers, Employees and the Self-Employed

• Deducting USC — the Universal Social Charge

• Calculating holiday pay

• The new rules on reportable benefits

• Benefit-in-Kind on Company Cars

• Choosing and using payroll software

What you need to know about taking on a new employee

Before hiring employees, you must register as an employer with Revenue. You can register through the Revenue Online Service (ROS) or if you want GroForth to manage your payroll, we can look after the registration process for you.

You then need to obtain a Revenue Payroll Notification (RPN) for each employee. You will need to ask your employee for their Personal Public Service Number (PPSN) so that you can request the RPN from Revenue. If your employee does not provide the PPSN, they will end up on Emergency Tax until the issue is resolved.

Every time you pay your employee, you are required by law to inform Revenue of the details of the payment and any deductions made. You must also provide your employee with a payslip showing their gross wages for the period in question and listing the statutory deductions such as Income Tax, PRSI, USC or Local Property Tax, as well as any voluntary deductions such as the employee’s pension contribution.

Your employee can check this information, along with details of payments received in any previous employments, through Revenue’s MyAccount service.

Why your employees need to register for MyAccount

When you take on employees, you are required to deduct various taxes and other charges from their gross pay. These deductions include Income Tax, PRSI and the Universal Social Charge. You must notify Revenue of each employees' pay and deductions on or before every pay day. In order for you to make the correct deductions, it is important that your employees have registered with Revenue for the MyAccount service.

As well as enabling you to make the correct deductions in each pay period, MyAccount also allows you to review screens showing how the information in your payroll submissions is presented to employees. This can sometimes save time if you need to resolve employee queries.

In addition, MyAccount enables your employees to update their personal details with Revenue, review their tax affairs, make payments and apply for certain tax reliefs and incentives.

The difference between net and gross pay

When negotiating pay with your employees, it is very important to agree gross rather than their ‘take home’ or ‘net’ pay. This is because the tax credits, allowances and reliefs that each employee is entitled to vary significantly depending on the employee’s individual circumstances. Factors such as whether they have a second job, whether they split their tax credits with a spouse and whether they owe back taxes to Revenue all affect their tax liability. An employee’s tax position can also change during the course of their employment if their personal circumstances change—for example if they switch from being taxed as a single person to being taxed as a couple.

When you agree a gross salary with your employees, the cost to you will not change even if your employee’s personal circumstances change. However, if you agree ‘net pay’, the cost can fluctuate if your employee’s tax circumstances change.

Say, for example, you take on a new part-time employee who has a second job. You agree a net salary with the new employee but your employee has a second job and decides to transfer all of their tax credits and cut-offs to their other employer. This will boost their ‘take home’ pay from their other employer without affecting their ‘take home’ pay from you. The employee in this example will be better off, but you could end up hundreds (or even thousands) of euro out of pocket over the course of a year.

Employees can also lose out in net pay agreements. Say, for example, the Government announces an increase to personal income tax credits or cut-offs in the Budget. Employees who are paid based on an agreed gross wage will get the benefit of these increases however employees on an agreed net wage will continue to receive the same net pay as before the Budget.

When to deduct Emergency Tax

When you take on a new employee, you may not know what tax band they should be in as this can be affected by their individual circumstances and/or their earnings from a previous employment. Until it becomes clear what the employee’s tax situation is, you will need to deduct Emergency Tax from their pay.

Provided you know the employee’s Personal Public Service Number (PPSN), normal Emergency Tax rules will apply. This means that the single person’s Income Tax rate band (20%) applies for the first four weeks of employment and the higher rate (40%) then applies from Week 5 onwards.

If you do not know your employee’s PPSN, you will need to deduct tax at the higher (40%) rate from the outset.

While your employee is on Emergency Tax, an emergency rate of Universal Social Charge (USC) also applies. This is a flat percentage deduction (8% in 2023) that applies to all income.

When you receive a Revenue Payroll Notification (RPN) from Revenue for your employee, this will tell you the tax band, credits and tax rates that apply. This will enable you to take your employee off Emergency Tax.

Employee tax credits

When calculating your employee’s take-home pay, you need to take into account any tax credits, allowances and reliefs that apply as these will reduce the amount of Income Tax that must be deducted at source from your employee’s pay.

All employees are entitled to a basic personal tax credit however the value of this credit depends on each employee’s individual circumstances—for example, different rates apply depending on whether the employee is single, married or in a civil partnership, widowed, separated or divorced.

Your employee may also be entitled other specific tax reliefs or allowances such as the recently introduced rent tax credit. These must also be applied when calculating pay and issuing their payslip each pay period.

The Revenue Payroll Notification (RPN) that you receive from Revenue for each employee tells you the Income Tax and USC rates to apply.

A comprehensive list of the various personal and PAYE tax credits, allowances and reliefs is available on the Revenue website.

Pay Related Social Insurance — PRSI

Pay Related Social Insurance (PRSI) is paid by employees, employers and the self-employed. These PRSI contributions are used to fund various Social Welfare benefits and pensions.

Each time you pay your employees, you must deduct the employee’s PRSI contribution from their gross pay. You must also pay an employer PRSI contribution.

The amount of PRSI due depends your employee’s income and PRSI Class. Most employees are in Class A while most self-employed people are in Class S. There are other PRSI classes for various types of public sector workers. Information on PRSI contribution classes and rates is available on the Government website.

Keep in mind that various credits, reliefs and allowances can reduce your employee’s Income Tax liability.

The Universal Social Charge — USC

The Universal Social Charge (USC) was originally introduced as a temporary measure in 2011 but continues to apply today. Essentially, this is an additional tax on income which is payable by everyone whose annual income exceeds €13,000.

Employers must deduct USC on a weekly or monthly basis via payroll and pay it to Revenue on behalf of their employees.

Although USC is a universal tax, some types of income (such as certain types of Social Welfare benefit) are exempt. You can find details of these exemptions on the Revenue website.

Calculating holiday pay

In Ireland, under the Organisation of Working Time Act, employees are entitled to a certain amount of holiday leave. The three main methods to calculate this statutory annual leave entitlement are:

• 4 working weeks in a leave year in which the employee works at least 1,365 hours (unless it is a leave year in which he or she changes employment)

• 1/3 of a working week per calendar month that the employee works at least 117 hours

• 8 percent of the hours an employee works in a leave year (but subject to a maximum of 4 working weeks).

The Act specifies that if more than one of these methods applies, the employee is entitled to whichever of the periods is the greater.

When it comes to calculating holiday pay, the payment rate is the employee’s normal weekly rate (or rate proportionate to the normal weekly rate). The Act does not prohibit employers and employees from entering into arrangements that are more favourable to the employee. Holiday pay is paid in advance of the employee taking leave.

How advance payments work

Say, for example, an employee who is paid weekly, takes two weeks annual leave. In this situation, the employer will need to pay a week’s pay in advance. To do this, you apply the relevant tax credits, rate bands and USC cut-off points for both weeks when you make the payment. Your employee then receives two weeks’ pay on the payday before they go on leave and no pay in the second week of their two-week holiday.You can find out more about advance holiday pay on the Revenue website.

Bonuses and commission

Usually, employees do not earn any bonuses or commission when on holiday, so you just pay their normal salary while they are on annual leave.

Public holidays

When it comes to public holidays, employees are usually entitled to one of the following:

• a paid day off on that day,

• a paid day off within a month of that day,

• an additional day of annual leave,

• an additional day's pay

Maternity leave and sick leave

Employees on maternity leave continue to build up their entitlement to annual leave and are also entitled to leave for any public holidays that occur during their maternity leave (including additional maternity leave). Likewise, employees who are on certified sick leave continue to accrue their annual leave / public holiday leave entitlement. However, employees are not entitled to pay or time off for a public holiday if they have been out sick for more than 26 weeks before the public holiday.

Leavers

Employees leaving employment are entitled to be paid for any untaken annual leave.

Payroll software

Many commonly used payroll software solutions provide tools which can help you calculate your employees’ holiday pay and leave entitlements. However, if in doubt, it’s a good idea to get advice as holiday calculation errors can be expensive and time consuming to resolve.

The new rules on reportable benefits

Under new rules which came into effect in January 2024, employers must collect information about ‘reportable benefits’ and submit it to Revenue in real time using the Revenue Online Service (ROS). ‘Real time’ means that the submission must be made on, or before, the payment date to the employee.

Three ‘reportable benefits’ are included in the new requirements:

• Small benefit exemption

• Remote working daily allowance

• Travel and subsistence payments

It is likely that other benefits may come under these enhanced reporting requirements in future.

Benefit-in-Kind on Company Cars

Benefit-in-Kind (BIK) is payable where a company car or van is available to a business’s directors or employees for their private use. From January 2023, there are a number of changes to be aware of. These include changes to how the cash equivalent value of company cars is calculated, an increase in BIK on company vans and changes to the BIK relief on electric vehicles. Full details are available on the Revenue website.

BIK on Company Vans

From 1 January 2023, the flat rate percentage used in the calculation of the cash equivalent of the use of a van has increased from 5% to 8%. If you’re not sure whether a vehicle qualifies as a ‘van’ for BIK purposes, the relevant criteria are listed on the Revenue website.

Electric vehicles

There are also changes to the tax relief on employer-provided electric vehicles. This relief is being phased out, reducing on a tapering basis. The cash equivalent for electric vehicles is calculated based on the vehicle’s original market value reduced as follows:

• €35,000 in respect of vehicles made available in the 2023 year of assessment;

• €20,000 in respect of vehicles made available in the 2024 year of assessment;

• €10,000 in respect of vehicles made available in the 2025 year of assessment.

Revenue states that this reduction applies irrespective of the actual OMV of the vehicle or when the vehicle was first provided to the employee.

It is important to apply the correct BIK rates. If you require assistance, please let us know.

Choosing and using payroll software

Anyone running payroll will tell you there is a lot more to the job than meets the eye! It’s not just a matter of calculating wages and dealing with internal departments to ensure that you get the information you need on time — whether it’s information on overtime payments, holiday pay, sick pay or bonuses, new starters or leavers—it’s also dealing with employee queries and compiling, maintaining and reporting payroll information to comply with Revenue and employment law requirements.

There are a lot of advantages to using payroll software to manage these time-consuming tasks. Today, most payroll solutions are designed to:

• Make it faster and easier to calculate pay

• Manage bonuses, expenses

• Generate payslips

• Communicate with Revenue in real time and enable Revenue Payment Notifications and other relevant data to be automatically downloaded

• Store payslips and data securely

• Provide 24/7 access to relevant information for you and your employees

• Improve reporting for both you and your employees

For most of our clients at GroForth, payroll software has become an essential tool, helping to automate time consuming processes and cut down on the risk of human error. Examples of the solutions our clients are using include BrightPay, Sage and Thesaurus Connect. When choosing payroll software, it’s a good idea to get advice from your accountant. We always advise our clients to make sure that any payroll solution they are considering will integrate with their accounting system and with any other relevant technologies that their business may be using. The more integrated your systems are, the easier it becomes to create efficiencies as you develop and grow your business.

Need help?

We understand that getting a handle on payroll can be daunting especially if you are taking on employees for the first time. It is important to ensure that you are up to date with the latest information. This article provides links for relevant Revenue and Government websites. If you have questions about payroll or need help setting up or running your payroll processes, GroForth can provide practical support. Contact us for details of our payroll services.

VAT and Other Taxes that Could Affect Your Business

Tue, 09 Jul 2024 13:30:14 GMT

Your business is probably registered for VAT but depending on how you operate, you could also be liable for various other taxes. In this article, GroForth’s Geraldine explains how to get to grips with:

• VAT, VIES, INTRASTAT and Mutual assistance

• Relevant Contracts Tax

• Professional Services Withholding Tax

VAT, VIES, INTRASTAT and Mutual assistance

VAT is a tax imposed on certain goods and services. Different VAT rates apply depending on the goods and services being provided. Depending on where and how you are doing business, there can be a lot of different VAT rules to get your head around, however as a general rule, businesses collect VAT from their customers and file VAT returns with Revenue.

Under tax law, you are required to register for VAT when your turnover exceeds (or is likely to exceed) the VAT threshold in any continuous 12-month period. The main thresholds are €37,500 if you are supplying services only, €75,000 if you are supplying goods, €10,000 if you are making mail order sales or engaged in distance selling of certain goods or services. You can find more information on VAT thresholds and who should register for VAT in the VAT registration section of the Revenue website.

Your VAT Return

You must file and pay your VAT by the 23rd day of the month if you file via ROS (otherwise you must file by the 19th day of the month) following the end of each taxable period. You must also complete a Return of Trading Details (RTD) each year. This form is used to list your total purchases and sales for the year, broken down by their VAT rate. The form must be filed by the 23rd of the month following the end of your accounting period. It is important your RTD matches the information filed in your VAT returns for the relevant period as discrepancies could trigger Revenue queries that can be time-consuming to resolve.

In our experience, historically Revenue did not always follow up on missing RTDs however we have recently noticed an uptick in the checking of these forms so it is important to ensure that you file your return on time. Late filing could delay any tax refunds that you might be due and/or could mean that you cannot obtain a tax clearance certificate.

Reclaiming VAT

An advantage of registering for VAT is that you can reclaim the VAT you pay when you purchase certain goods and services that for use in your business. You must retain proof of these purchases (invoices and receipts) to support your claim for repayment of VAT. You submit your claim through your VAT return. The time limit for submitting a claim is four years.

Note that you cannot claim VAT on all of the expenses you incur. Food, drink or other personal services, accommodation and entertainment are examples of expenses where VAT cannot be reclaimed. You can find more information about they types of VAT you can and cannot reclaim on the Revenue website.

EU customers

If you supply services to a customer in another EU country, your customer must account for the VAT that is due under the EU’s reverse charge rules. You must obtain the customer’s VAT number and include it on your invoice and your invoice must indicate that the reverse charge applies. You can find out more about reverse charge accounting on the Revenue website.

Doing business within the EU also means that you must comply with the EU’s VIES, Intrastat and Mutual Assistance requirements:

⁃ VIES — VAT Information Exchange System: If you supply zero-rated goods or services to a VAT-registered trader in another EU Member State you must submit a VIES statement. Your VIES statement must be filed online via the Revenue Online Service (ROS)by the 23rd day of the month following the end of the reporting period. This means your January monthly statement must be filed by the 23rd of February, your February statement must be filed by the 23rd March and so on.

⁃ INTRASTAT: The INTRASTAT system collects statistics on the movement of goods between EU member states. You must complete a detailed INTRASTAT return if your annual imports from EU member states exceed €500,000 or if your annual exports to EU member states exceed €635,000. If you are VAT-registered, you must complete boxes E1 (total goods and related costs to other EU Countries i.e. Dispatches/ Exports) and E2 (total goods and related costs from other EU Countries i.e. Arrivals/ Imports) on your VAT 3 return when each return is due.

⁃ Mutual Assistance: This system enables you to verify the VAT numbers that your EU customers give you. See the VIES VAT Number Verification service on the European Commission website.

Customers outside the EU

While supplies of services to business and private customers outside the EU are generally not subject to VAT, it is very important to confirm the customer’s tax status and retain proof that they are established outside the EU. This is because if you do not charge VAT, and cannot prove that the customer is not established in the EU, you could have to pay the VAT yourself. You could also have to pay Revenue interest and penalties.

Relevant Contracts Tax

If your business relies on subcontractors, it is important to understand whether Relevant Contracts Tax (RCT) applies. RCT is a withholding tax on various activities in the construction, forestry and meat processing industries. You can find a full list of relevant activities on the Revenue website. Note that RCT also applies to relevant activities carried out by non-resident subcontractors.

What is a withholding tax?

A withholding tax is a tax that is deducted by the recipient of a service. So, if you are using subcontractors for activities where RCT applies, you must deduct RCT from the payments you make to these subcontractors.

Subcontractor vs Employee

It is important to understand the difference between an employee and a subcontractor. If you are unsure, you can find guidance on how to check this in Revenue’s Code of Practice for Determining Employment Status.

Notifying Revenue about RCT contracts

Under RCT rules, you must notify Revenue about all relevant contracts and subcontractor payment details. You do this via contract and payment notifications which are filed via the Revenue Online Service (ROS). You must notify Revenue immediately after entering into a contract with a subcontractor and file your payment notifications before you pay your subcontractors. Revenue can apply a surcharge if your RCT filings are late.

Summary of RCT deductions

Shortly after the end of each return period, Revenue will compile a summary of your RCT deductions. It’s advisable to check this carefully each time to make sure that it is correct. Revenue can penalise you for any incorrect or unreported payments.

Notifying subcontractors

You must also notify your subcontractors about the RCT that you are withholding from their payments.

RCT rates

There are three different RCT rates—0%, 20% and 35%. The rate that applies, depends on each subcontractor’s compliance record with Revenue.

Note on VAT and Relevant Contracts Tax

While VAT is usually charged by the person supplying goods and services, under Relevant Contract Tax in the construction sector, the person receiving the goods or services is responsible for collecting the VAT and paying it over to Revenue. This means that if you are a Principal Contractor for RCT purposes, you have to apply Reverse Charge VAT (RCV) to the invoices you receive from your subcontractors.

Professional Services Withholding Tax

State and Semi-State bodies and their subsidiaries must deduct Professional Services Withholding Tax (PSWT) from the payments and expenses they pay to the providers of certain professional services. Organisations who receive funding from State or Semi-State bodies also fall under these rules.

A summary of services where PSWT applies is available on the Revenue website. These include:

• medical, dental, pharmaceutical, optical, aural or veterinary services

• architectural, engineering, quantity surveying or surveying nature, and related services

• accountancy, auditing or finance services

• financial, economic, marketing or advertising services

• legal services

• geological services.

How does PSWT work?

If you provide professional services to State or Semi-State companies, then PSWT will apply and will be deducted from the payments you receive. VAT should not be included when calculating PSWT however where interest is charged (eg on a late payment for professional services), PSWT is deducted from the interest also.

The State company or Semi-State that receives your professional services must submit a Payment Notification using the Revenue Online Service (ROS), deduct 20% PSWT from your payment, and pay this PSWT over to Revenue. You can claim the tax withheld as a credit against your Income Tax or Corporation Tax liability in the relevant tax year.

Exemptions

Certain types of payments and expenses are exempt from PSWT. These include certain inter-group payments, certain foreign branch payments, certain payments made abroad, payments to employees that are subject to PAYE, payments that are subject to Relevant Contracts Tax and payments to charities that are exempt from Income Tax.

If you are a GroForth client, our team can help you with your the various taxes covered in this short article. Contact us for details of our services.

Why You Might Need a Virtual Accounts Department

Tue, 09 Jul 2024 10:49:16 GMT

Every business must maintain proper accounts. If your business is not yet ready to employ a full time bookkeeper, a virtual accounts department can be a practical and cost-effective solution. Keep in mind that compliance isn’t the only reason to keep your accounts in order. In this article, GroForth’s Michelle Collins explains how implementing efficient accounting processes can enable you to:

• Escape from boring administrative tasks

• Budget for better performance

• Get paid on time

• Monitor energy and input costs

• Enhance your management skills

Escape from boring administrative tasks

Many business owners complain that administrative tasks take up too much time and pull them away from revenue-generating activities. While it’s true that administration can be time-consuming, it’s also true that monitoring income and expenditure in realtime is a great way to spot opportunities to maximise profit and nip potential problems in the bud. Today, technology provides lots of tools to assist business owners. If you’re not already using these tools, ask your bookkeeper or accountant for recommendations. The more time that you can free up from administration to focus on revenue-generating activity, the better.

Budget for better performance

Budgets are an essential planning tool. Last year’s actual costs need to be reflected in this year’s budget. Review what you spent last year and keep inflation in mind when preparing and/or updating your budgets and forecasts.

Get paid on time

Make sure that you invoice on time and make it easy for your customers to pay you. This is a really effective time saver as it minimises overdue payments which you would otherwise have to chase. Monitor what you are owed and if a customer is late making a payment, follow up promptly to minimise the risk of bad debts building up.

Monitor energy and input costs

Energy costs have become a major worry for businesses and consumers alike. Review what you are using and see if you can identify areas where savings can be made — turning off equipment that is not in use, for example. If it’s a while since you last looked at suppliers, now would be a good time to check whether you can obtain better value by switching to another energy provider. The same goes for your other utility costs.

Remember to monitor your actual costs against what you budgeted for on an ongoing basis. Reviewing your management accounts at least once a month is the best way to do this. If your actual costs are higher than expected, you need to understand why and update your budget accordingly.

Use your accounts to enhance your management skills

Your accounts system should help you track what is coming in and going out of your business day-to-day. If it is properly set up, and if all relevant information is being entered accurately and on time, your system will highlight trends and help you spot potential problems early enough to deal with them before they get out of hand. If you’re not getting this information from your existing system, it’s worth asking your bookkeeper to help you access the reports you require.

If your bookkeeper can’t provide the information you need, it may be time to look for outside help. Virtual Finance Departments like GroForth provide a range of accounting supports for companies who need to access additional bookkeeping, accounts, cashflow management and payroll services.

AUTO ENROLMENT PENSION: How will the new Retirement Savings Scheme affect payroll?

Mon, 29 Apr 2024 09:49:58 GMT

The Government’s plan to introduce auto enrolment pensions took a step forward in April 2024 with the publication of the Automatic Enrolment Retirement Savings System Bill. If and when enacted, this legislation will bring an estimated 800,000 workers into a new retirement savings scheme. In this article, GroForth’s Michelle Collins explains how auto enrolment will affect Irish employers. Michelle focuses in particular on the following key questions:

• What is pensions auto enrolment?

• When will pensions auto enrolment come into effect?

• Which employees will be covered by the new Retirement Savings Scheme?

• How much will employees have to contribute to the new scheme?

• How much will employers have to contribute?

• How will auto enrolment impact payroll?

• Where can I learn more about my auto enrolment pension obligations?

What is auto enrolment?

Pension auto enrolment is a workplace pension retirement scheme for employees who do not already have an occupational or private pension. The purpose of the scheme is to increase Ireland’s pension coverage. This is considered necessary because it is estimated that currently more than a third of Irish workers do not have an occupational or private pension.

When will auto enrolment come into effect?

The Minister for Social Protection expects the pension auto enrolment system to be ready by the end of 2024. While some commentators think this may prove optimistic, employers nevertheless need to start getting ready to enrol qualifying employees in the new system and ensure their payroll can cope with the forthcoming requirements. If everything goes to plan, contributions to the new scheme are due to commence in 2025.

Which employees will be covered by the new Retirement Savings scheme?

If and when enacted, the Automatic Enrolment Retirement Savings System legislation will apply to employees aged between 23 and 60 years old, who earn over €20,000 per year, and are not already paying into a pension. These employees will be automatically enrolled in the new Retirement Savings Scheme.

How much will employees have to contribute under pensions auto enrolment?

An employee’s initial pension contribution will be 1.5% of their gross earnings. This will be matched by their employer, and topped-up by the State. The employee contribution rate will increase every three years until it reaches 6% of gross earnings.

When deciding how their pension contributions should be invested, employees will have a range of three retirement savings options to choose from—high, medium and low risk. Those who do not make an active choice will be placed in a default investment strategy moving them from higher to lower risk as they approach retirement.

Employees will be allowed to opt-out of auto enrolment after a mandatory six-month participation period however they will be brought back into the system after two years unless they have an alternative pension arrangement in place.

How much will employers have to contribute?

Employers will have to match the contributions made by their employees up to a maximum of €80,000 of earnings. While employers will not have to set up an occupational pension scheme, they will be required to facilitate payroll deductions. The new system will be administered by a National Automatic Enrolment Retirement Savings Authority.

How will auto enrolment affect payroll?

From a payroll perspective, employers will need to check which of their employees are eligible for the new system. This is not a once-off exercise. Employers will need to monitor each employee’s age and earnings on an ongoing basis to ensure that workers earning over €20,000 are brought into the system when they reach age 23 and stop contributing to the system when they reach the age of 60.

Employers will also need to ensure that their payroll system can cope with enrolment (including employees opting out and/or suspending contributions for a period of time). Payroll systems will have to be able to calculate and pay employee and employer contributions correctly.

Where can I learn more about employer auto enrolment obligations?

You can monitor the progress of the Automatic Enrolment Retirement Savings System Bill 2024 in the Bills and Acts section on the Oireachtas website. Information sessions for employers are currently underway. For details of forthcoming sessions see the Government’s Auto Enrolment Latest News and Events.

GroForth clients

GroForth is keeping an eye on the developments discussed in this short article and our team will be working to help clients prepare for pension auto enrolment over the coming months. In the meantime, if you have specific payroll or auto enrolment questions or concerns, please let us know.

Payroll Headaches

Mon, 11 Mar 2024 22:58:39 GMT

Here are our payroll pain points—What are yours?

Every employee expects to be paid on time and many count on it. So, when things go wrong, it’s highly stressful and payroll often get the first call. In this article, GroForth’s Michelle suggests ways to avoid five common payroll pain points. These pain points are:

• Not getting the right information from the business

• Incomplete time records and/or approvals

• Calculation errors

• Misclassification of employees

• Keeping up to date with payroll legislation and regulatory changes

While dealing with employee queries is time consuming and sometimes frustrating, it’s not the only headache for a payroll team. Set out below are five other payroll pain points that people complain about along with some tips for how to resolve them.

1. Not getting the right information from the business

Probably everyone who works in payroll experiences this. It can feel like you’re expected to be psychic but unless you get relevant information from the business on time, you can’t process it on time. I’ve seen situations where managers forget to tell payroll about a new employee or that someone changed their hours, went on special leave, or left the business altogether. If payroll doesn’t find out about these things on time, they can’t process them for the pay run and this can be very stressful for everyone—from the new employee who perhaps doesn’t get paid or is left on emergency tax for too long because the relevant paperwork was missing, to the payroll team who have to find out what went wrong so that they can fix it, and the employer could find themselves on the wrong side of Revenue for not filing the necessary information on time. So, not getting the right information from the business is probably the top headache for most payroll teams.

Employers need to ensure they implement a strict policy and that managers adhere to it because of the risk that payroll errors can pose to the business. If you are a GroForth client and need help to develop a policy, please contact our team for assistance.

2. Incomplete time records and approvals

This is another really common headache which can happen when managers leave payroll-related tasks until the last minute and then forget to do them altogether. Again, the best way to address this is for employers to make sure managers understand the business risks associated with neglecting payroll.

3. Calculation errors

Mistakes calculating payments to part-time employees crop up fairly frequently, particularly when a worker’s hours tend to vary from week to week. More often than not, if a manager or employee spots a mistake, it’s at the last minute as you’re just about to do the pay run. A bigger headache, though, is when a miscalculation goes unnoticed for several weeks because tracing the problem backwards is tedious, time-consuming and potentially very expensive especially if the business has to make good errors that went unnoticed for a prolonged period of time.

4. Misclassification of employees

This can occur in various situations including those where an employee is misclassified as a contractor. It’s very important that employers confirm the status of their employees. If in doubt, check Revenue’s Code of Practice on Determining Employment Status.

5. Keeping up to date

Payroll operates in an evolving landscape where revised tax rates, employment law changes and new rules that affect employee pay, conditions and benefits are constantly developing. Keeping up to date can be a major headache, particularly for small businesses where the payroll team might just be one person.

In these situations, or indeed in other situations where you find payroll stressful or overly time consuming, it may make sense to look at outsourcing as an option that could improve efficiency, generate cost-savings and deliver peace of mind. However, before deciding to outsource there are pros and cons to consider. In a previous blog, we explained how to examine the business case for outsourcing. If this is something that you are considering, please get in touch . We’d love to hear from you.

Deciding What To Pay Your Employees

Mon, 11 Mar 2024 22:56:39 GMT

The more you invest in your employees, the more important it is to hold on to them. As well as being a good employer, this means keeping tabs on what your competitors are offering and making sure that the pay and benefits you offer remain attractive. In this article, GroForth’s Michelle explains how focusing on the following key areas can help you optimise how you plan and manage employee remuneration:

• Leverage your payroll information

• Understand your finances

• Review job descriptions

• Keep tabs on market forecasts and trends

• Keep up with legal and regulatory requirements

• Check salary surveys

• Understand employee expectations

• Explore cost effective alternatives to hiring

Employers know all too well that hiring is a time-consuming and expensive business. So, if you have good employees, you definitely want to hold on to them. While keeping up to date with market trends and benchmarking your salaries and benefits against your competitors is key, it’s also important to understand where and how your team members add value to your business. The more you know about their expectations and aspirations, the better you can tailor individual packages. The question is—where to start?

Leverage your payroll information

From a payroll perspective, we believe the first step is to use the information you already have at your fingertips. Your payroll reports reveal a lot about your business. As well as using them to quantify how much you are spending on salaries this year compared to last year, they can help you measure productivity—for example, by looking at how many hours your employees work and whether they are achieving value-adding outcomes or whether you are spending too much on work that does not improve your bottom line. If you notice that employees are doing more overtime than last year, this might suggest you need to invest more resources in a certain area. If you notice that sick leave and absence rates have deteriorated, this could indicate problems in the workplace that need to be addressed.

Understand your finances

Budget constraints obviously need to be taken into account when it comes to deciding what you can afford to pay. It’s worth keeping in mind that non-pay benefits such as flexible working or career advancement opportunities may be more important than a pay rise for some employees.

Review job descriptions

When reviewing your existing team, it’s important to be clear about what each role in your business involves. Ensure that your job descriptions are accurate, up to date and job titles correctly reflect roles. Remember to take experience and qualifications into account when looking at role requirements.

Keep tabs on market forecasts and trends

According to Ibec’s latest Pay and HR Trends report, 82% of businesses plan to increase wages in 2024 with an average increase of around 3.8%. External data sources like this can enable you to check if you are in line with other businesses in your sector and help you forecast how trends are likely to affect your payroll costs. At the time of writing, the latest available CSO statistics show that average weekly earnings in Ireland rose 4.6% in Q3 2023. Inflation is currently projected to be somewhere between 2% and 3% this year.

Keep up with legal and regulatory requirements

You also need to keep tabs on legal requirements that could affect your payroll such as the recent increase in the National Minimum Wage, increased parent’s leave, new medical care and domestic abuse leave entitlements, and the enhanced reporting requirements that recently came into force. (For more information on these, see our recent article on Helping your business cope with rising employment costs)

Check salary surveys

Recruitment companies are an excellent source of information, particularly those that specialise in jobs in your sector. Many top recruiters publish annual salary surveys and some provide online salary calculators which you can use to get an idea of what businesses are paying for specific roles. Other online sources to research include jobs websites, LinkedIn Glassdoor, etc.

Understand employee expectations

Remember, your employees may also be watching market trends, particularly if they plan to ask you for a pay rise. When an employee approaches you with a request, it’s a good idea to take time to reflect before making a decision. If you decide to give them the pay rise, you may be able to look for a quid pro quo so that you get something back in terms of increased productivity or the employee taking on additional responsibility. Keep in mind that if you grant one request, other employees on the payroll may also request an increase.

Look for cost-effective alternatives

With rising labour costs eating into the profitability of many businesses this year, rewarding good staff and encouraging them to focus on the areas that add most value to your business has never been more important. Bear in mind that it is sometimes more cost-effective to outsource back-office administration than to try to do everything in-house. A Virtual Finance Department, for example, such as the one we provide here in GroForth, offers cost-effective and efficient administrative support for

• Bookkeeping,

• Payroll,

• Management accounting,

• Credit control,

• Cashflow management and forecasting,

• Tax records and VAT returns.

If you would like to find out more about these services and/or if you need help to get more from your existing payroll systems, please get in touch. We’d love to hear from you!

Get a Handle on Staff Entertainment Expenses

Tue, 27 Feb 2024 11:04:25 GMT

When organising parties and events for your employees, it’s important that these are open to all of your staff and that the costs you incur are reasonable, explains GroForth’s Michelle .

Several recent media reports suggest that Revenue are scrutinising staff entertainment expenses to check whether businesses are complying with Benefit-in-Kind rules. The issue affects events like department lunches, retirement parties, Christmas parties and staff sports days.

What does Revenue say about these events?

Revenue acknowledges that employers may wish to provide seasonal parties, special occasions meals or other inclusive events for their employees and says that “a taxable BIK will not be treated as arising where the expenses are reasonable, and the event is open to all employees.”

Where staff entertainment expenses are paid for by an employer but the events in question are only open to some employees, workers could be liable for BIK.

For more information on the taxation of staff entertainment expenses, see Revenue’s Tax and Duty Manual, Chapter 12 The provision of miscellaneous benefits.

Helping Your Business Cope With Rising Employment Costs

Wed, 21 Feb 2024 22:53:36 GMT

Rising labour costs will eat into the profitability of many businesses this year making it more important than ever to get timely, accurate reports from payroll and bookkeeping systems. In this article, GroForth’s Ashley looks ahead at some of the changes coming on stream in 2024 and stresses the importance of monitoring these developments and reflecting them in your budgets and forecasts.

If you have employees, it’s likely that wages and salaries are your single biggest cost. So, with labour costs rising, it’s very important to keep up to date and anticipate how the various changes coming into force will affect your payroll.

Once you know what to expect, you can then feed this information into your budgets and forecasts where it will help you manage your cashflow more effectively and make better decisions for your business.

So, what labour cost increases are in store in 2024?

Among the most significant changes to take into account are:

• An increase in the National Minimum Wage (up by €1.40 per hour to €12.70 per hour from 1 January 2024).

• The statutory sick leave entitlement (which came into force last year) is rising from three days in 2023 to five days in 2024, seven days in 2025, and ten days in 2026.

• The parent's leave entitlement is rising to 9 weeks in 2024. (Note parent’s leave is not the same as parental leave)

• A new entitlement to five paid days domestic violence leave in a 12-month period came into operation on 27 November 2023. (We discussed this in our article on Additional Leave Entitlements last year).

• Likewise, Medical Care Leave, which came into effect on 3 July 2023, entitles employees to up to 5 days unpaid medical care leave in any consecutive 12-month period.

• If you have employees who require a work permit, note that the salary requirement for most General Employment Permit holders increased from €30,000 to €34,000 in January 2024.

• Pensions auto-enrolment is due to be phased in from late 2024.

• PRSI contribution rates for employers and employees are set to increase by 0.1% from 1 October 2024.

Other recent developments which have payroll implications include the 2024 updated tax rates, bands and reliefs and updated civil service subsistence rates. There are also new reporting requirements for certain employee benefits and expenses. (See a recent article on reportable benefits)

As is always the case with payroll, it’s important to monitor developments throughout the year and ensure that you anticipate and reflect relevant changes in your budgets and forecasts. Keep in mind that as well as the cost impact, changes may have implications for your workplace policy and record-keeping.

Need help?

If you are not sure how to get the information that you need from your existing systems, GroForth can help you. We can take a look at your bookkeeping and payroll processes and identify any improvements that may be needed. If necessary, we can also prepare monthly management reports for you. The purpose of these reports is to enhance your ability to control costs, nip potential problems in the bud, improve forecasting and cashflow management, and maximise your profitability. Contact us for details.

Get a Handle on Financial Control

Wed, 07 Feb 2024 11:10:15 GMT

Effective financial control helps keep your income and expenditure on track. When correctly implemented, it not only protects your business—it also highlights opportunities to improve your profitability. With business costs rising, keeping your budgets and business plans up to date is more important than ever. In this article, GroForth’s Michelle Collins lists examples of how getting to grips with financial control can help you manage your business. Michelle goes on to explain:

• What’s involved in financial control?

• How financial control improves business forecasts

• Other ways in which financial control protects your business

• Why financial control of payroll is important

Examples of how good financial control helps protect a business

In the current environment, good financial control is essential. As well keeping tabs on your costs, it will protect your business in a number of other ways, including:

• Ensuring that you have accurate information available for forecasting and planning,

• Highlighting potential problems that may be emerging in your business so that you can address them before they escalate,

• Identifying opportunities to improve operational efficiency,

• Maximising the cash available to fund ongoing development and growth,

• Supporting compliance and helping avoid tax problems,

• Protecting your business from potential losses and fraud.

What does financial control involve?

Good financial control requires accurate, reliable bookkeeping and accounting supported by robust processes around things such as:

• Separating personal from business expenses,

• Implementing appropriate approval processes for checking expenses and purchases,

• Carrying out regular bank reconciliations,

• Ensuring payroll is operated correctly,

• Issuing invoices on time,

• Avoiding cashflow problems,

• Making sure costs don’t run out of control,

• Monitoring and managing stock,

• Monitoring debtors and implementing effective and consistent credit control processes,

• Preparing and reviewing budgets,

• Managing cashflow,

• Keeping track of assets,

• Identifying and managing risks.

Using financial control to improve business forecasts

The purpose of business forecasts is to monitor progress, anticipate what will happen in the coming months and check that your business is on track to achieve its goals.

Good financial control supports this by giving you a realistic view of your business. It enables you to monitor performance and revise plans and forecasts each time new or developing problems and/or opportunities emerge.

When underpinned by strong bookkeeping and accounting processes, good financial control helps you adapt to changing circumstances and ensures that your decisions are always based on accurate, reliable, up-to-date information.

Other ways in which financial control protects your business

Mistakes happen in every business from time to time. One of the key benefits of good financial control is that it makes it easier to spot potential problems and track down mistakes caused by duplication, error or gaps in records. Good financial control can also highlight suspicious transactions that could indicate fraud.

A word about payroll

If you have employees, their wages and salaries are likely to be your biggest cost so financial control around payroll is also very important. At the most basic level, this should include making sure that:

• Your list of employees is up to date and correct,

• Pay rates and hours are recorded correctly,

• Pay is calculated correctly,

• Leavers and joiners are processed on time,

• The number of pay runs is correct,

• You are complying with your obligations under tax, employment and data protection legislation (making the appropriate deductions, issuing payslips and informing Revenue each time you pay your employees, etc)

Need help with financial control?

We understand that it is difficult to keep on top of everything when you are running a business. Not everyone has the resources to employ a full time bookkeeper or accountant so this is where we can help. GroForth specialises in bookkeeping and payroll for small businesses. Our local team supports all of the main accounting and payroll systems and we tailor our services to each client’s individual requirements. If you would like to find out more about how we can help your business stay on track and achieve your full potential, do get in touch. We’d love to hear from you!

5 Tips to Get 2024 Off to a Great Start

Tue, 16 Jan 2024 15:38:22 GMT

Those quiet days at the beginning of the year can be a great opportunity to do a bit of administrative housekeeping. It might seem boring but you’ll thank yourself when you’re doing your tax return next year! Here are five suggestions to get started:

Run an eye over your 2023 purchases to check everything is recorded and correctly coded. Now is the time to chase any missing documentation, fix errors and get everything ship shape for your accountant.

Review what you spent in 2023 and use this information to help you budget more accurately for 2024.

Check what you are owed and work out where you need to follow up on late payments. If you hate chasing customers, consider letting our credit control team do the chasing for you.

Look for opportunities to streamline processes. Consider outsourcing non-core functions like payroll and accounts if this could free up staff time for higher value activities.

Evaluate the information that you get from your existing systems. Is it helping you to manage your business or is it taking up too much time and just generating administrative headaches? Many GroForth clients say their profitability improves when we prepare monthly management reports and data analytics for them. If you’re not already availing of this service, contact us for details.

Getting to Grips with Prepaid Company Cards

Mon, 18 Dec 2023 14:54:10 GMT

One of the first things you are told when setting up a business is to separate your personal and business expenses. This applies both to bank accounts and credit cards. It’s important not just because it makes bookkeeping easier but also because it saves time when it comes to filing your tax return. In this article, GroForth’s Geraldine explains

• Benefits of using Prepaid Company Cards

• Benefit-in-Kind on Company Card purchases

• Why you need to keep business and personal expenses separate

• New reporting requirements for certain benefits

There was a time when the company’s petty cash box was used for purchases like tea and biscuits for the office. Nowadays most of these incidental purchases are paid for by card or contactless payment but you still need to keep the receipts for your bookkeeping records.

Prepaid company cards

Nobody enjoys having to track down missing receipts or trawl through statements trying to separate out business from personal expenses. Eliminating this task is one of the advantages of using prepaid company cards. They not only make it easy to control spending, they also come with APIs that enable you to integrate expenses into your bookkeeping records. Some even come with apps that enable you to set a budget and capture receipts digitally—a great time-saver. Examples include the Pleo Employee Business Expense Card and the Soldo Prepaid Company Card.

Benefit-in-kind

Provided your employees only use the company card for business purposes, this is not a Benefit in Kind (BIK). However, if they use the card for private purchases and don’t repay you for the cost of these purchases, Revenue regard this as a Benefit-in-Kind.

Why you need to keep business and personal expenses separate

There are also Revenue rules regarding the separation of business and personal expenses. This is why we always stress the importance of not using a personal card for business expenses. Mixing up business and personal purchases creates time-consuming administrative headaches from a bookkeeping and tax perspective.

New reporting requirements for certain benefits

Under new rules which came into effect in January 2024, it is now mandatory to submit a report to Revenue when you pay certain employee expenses and benefits. Three ‘reportable benefits’ are included in the new requirements:

• Small benefit exemption

• Remote working daily allowance

• Travel and subsistence payments

If you are a GroForth client, and need help on anything covered in this short article, please let us know. The best way to raise your query is to message us via our contact form.

How Bookkeeping and Payroll Integrations Create Efficiency and Save Time

Tue, 12 Dec 2023 11:58:24 GMT

The more integrated your systems are, the better as this will enable you to create efficiencies as you develop and grow your business. In this article, GroForth’s Ashley explains

• What can happen when bookkeeping and payroll are not set up correctly

• Why integration matters

• How integration works in practice

• Questions to ask when upgrading your systems

What can happen when bookkeeping and payroll are not set up correctly

When bookkeeping and payroll are not set up correctly, they can be both time-consuming and error prone. And although most businesses today use software packages like BrightPay and Xero to process payroll and accounts, we come across many instances where business owners are not taking full advantage of the opportunities these packages provide to streamline processes, reduce errors and save time.

Failure to take advantage of integration is sometimes simply due to lack of awareness of the potential benefits. When GroForth clients are looking to update or enhance their systems, we always stress that it’s not just a question of choosing the right package for the business, it’s also about finding and implementing reliable, secure and relevant tools that integrate with your accounting and payroll software. That’s because this is what will create real efficiencies both in terms of improving the operations of internal departments and enhancing how internal data such as sales orders, or third-party data like bank feeds, can be leveraged across the business.

Why integration matters

Another advantage of integration is that it often highlights opportunities to strengthen income streams and control costs. The more integrated your systems are, the better they enable you not just to make the most of your internal business data but also to potentially leverage data from your key business partners.

Amongst other benefits, integration helps you:

• save time—this is perhaps the single biggest benefit for many small business owners;

• manage your internal departments and administration more efficiently—this enhances profitability;

• access and use relevant third party data—this helps to improve your decision-making.

How integration works in practice

Accurate bookkeeping, accounts and payroll play a vital role in keeping your business financially viable. So, let’s look at a couple of practical examples of how integration works in practice.

If your sales system doesn’t automatically update your accounts, there is a risk that the invoices and monthly customer statements you send out to customers won’t accurately reflect what you are owed. This inevitably leads to queries that can be time-consuming to resolve and, in the worst situations, can even damage customer relationships.

Most of the accounting packages that GroForth clients use have integrations for things like sales invoices and payments and many of these systems offer a wide variety of other integration apps. For example, Xero—which is a popular accounting solution among our clients—has a dedicated App Store where you find apps to do things like integrate data from your ecommerce, invoicing, payments, bills and expenses, debtor management and time tracking.

Likewise, BrightPay—which quite a few of our clients use to manage their payroll—offers features like payroll journal integration with various accounting packages. This is achieved via an Application Programming Interface (API) which automates the otherwise time-consuming task of importing payroll data into the accounting system and helps reduce the risk of error.

Other accounting and payroll solutions also facilitate integration.

Upgrading your systems

If you are planning to upgrade your systems, key questions to ask include:

• Will the solution you are considering integrate with your HR, CRM and payroll systems?

• Is it compatible with your accountant’s systems?

• Can it take feeds of data from your bank and other relevant business partners?

Whatever systems you are using, it well worth checking out what’s available and investigating how potential integrations could benefit your business. If you are a GroForth client, we can help you to do this. Talk to our team. We’ll be happy to point you in the right direction.

How Linking Sales to Accounts Can Help You Get Paid On Time

Tue, 21 Nov 2023 13:45:13 GMT

Integrating your sales and accounts systems is a great way to save time. It will also enable you to manage your cashflow more effectively. In this article, GroForth’s Ashley asks:

• How good is your credit control?

• What is a good credit control process?

• Why integrating sales and accounts is one of the most important steps to get right

• What happens if your sales and accounts systems are not linked?

How good is your credit control?

We’ve all experienced how stressful it can be when customers don’t pay on time. I’ve seen situations where late payments even threatened the viability of otherwise thriving businesses. This is why it billing your customers on time and having an effective credit control process in place is important.

If you have an invoicing backlog, if you’re not sure what you’re owed, or if you don’t have up to date debtor information at your fingertips, these are signs that you need to get to grips with your credit control process.

Credit control problems often develop when there are pressures elsewhere in the business — these could be due to time constraints, staffing difficulties or failing to manage debtors in a professional and consistent manner. Whatever the reason, it’s important to identify the problem and take steps to find a solution.

What is a good credit control process?

A good credit control process ensures that the money you are owed gets collected on time. Integrating your sales and accounts systems means that when you raise an invoice it is automatically recorded in your accounts. Incoming payments from your customers can then be matched to the relevant invoice and overdue payments must be followed up promptly.

It’s also important to make it easy for your customers to pay you. The information you provide on your invoices and monthly customer statements must be accurate and easy for your customers to understand. This helps encourage them to pay promptly.

Why integrating sales and accounts is one of the most important credit control steps to get right

One of the most important steps to get right is ensuring that your sales and accounts systems are aligned. Remember, when you make a sale, you won’t get paid until your customer receives an invoice for the goods or services you provided. Raising the invoice promptly and ensuring that it can be accessed by your accounts system enables your accounts team to keep track of what you are owed. This is a basic step in managing and controlling your company’s cashflow.

Once invoices have been raised and sent out to your customers, it is good practice to issue regular reminders until they settle their bills. This is usually done via a monthly customer statement.

It’s important that the information on your invoices is correct and includes any relevant details that the customer may require (such as purchase order numbers). Monthly customer statements must also be accurate and up to date, making it as easy as possible for your customer to understand what they owe.

What happens if your sales and accounts systems are not linked?

If your sales system doesn’t automatically update your accounts system, there is a risk that the invoices and monthly customer statements issued to customers won’t accurately reflect what you are owed.

Incomplete or inaccurate customer statements lead to misunderstandings, make resolving customer queries time-consuming and can result in late payments. They also make debt collection more difficult.

If your systems are not linked, you may be able to overcome this problem via a cloud solution or by exporting relevant data from your sales system and importing it to your accounts. GroForth’s credit control team can help you identify a suitable solution. Contact us for details.

Tips to Make Festive Season Costs More Manageable for You and Your Staff

Wed, 15 Nov 2023 15:15:58 GMT

The last few weeks of the year can be an expensive time for both employers and employees. Have you found ways to manage these costs?

Over the years, I’ve found a few practical ways to make it easier to manage my end of year costs when it comes to rewarding staff and funding a work Christmas party.

Deposit account

My top tip is to open a deposit account and lodge some money each month which you can then use to fund things like the Christmas party and vouchers for your team. Having funds available when you need them helps reduce stress at what is often a very busy time of the year.

Keep it reasonable!

When planning your Christmas party, bear in mind the Revenue rules which state:

“Where an employer provides staff Christmas parties, special occasion meals or other inclusive events, such as sports days for staff, a taxable BIK will not be treated as arising where the expenses are reasonable, and the event is open to all employees.”

Revenue also provides guidance for virtual events:

“Where an event is held virtually, reasonable costs will include costs which would typically be incurred in hosting a face-to-face party or event. This includes the cost of delivering or providing food and drink to employees in advance of, or during, the event.”

Payroll

When it comes to helping staff save for Christmas, some employers facilitate saving via payroll—for example by facilitating payroll deductions for staff who are members of a credit union saving club. There are pros and cons to savings clubs. If you are considering facilitating one or setting up your own company club, it’s important to do your homework.

Xmas vouchers

Many employers avail of the Small Benefit Exemption Scheme to give their employees vouchers. This is a tax efficient way to reward staff for their hard work. Rather than wait for the end of the year, a practical tip is to give your employees their vouchers early as this enables them to use the vouchers to help pay for their Xmas shopping.

Other tips?

Has your business found other ways to cope with the costs of Christmas and/or to help your employees manage their individual costs? If yes, we’d love to hear about them!

Streamline your business processes for 2024

Wed, 08 Nov 2023 15:28:09 GMT

When your accounting and payroll systems are properly set up and work effectively, they free up time and enable you to focus on developing your business.

Regardless of where you are in your business cycle, some things always remain the same. You need to get the numbers right, manage cashflow, and look after your employees, customers and suppliers. It’s not always easy, but it’s important to avoid getting bogged down in day-to-day crises. Don’t be afraid to look for help if you need it.

Payroll and bookkeeping are two of the most time-consuming administrative processes in many businesses. Streamlining these processes will give you more time for other aspects of your business.

Payroll

Payroll can be a time-consuming task and is a process where it is crucial to avoid mistakes. Check that you are up to date with all of the latest changes including the new rules regarding reportable benefits which we explained in a recent blog. Make sure that your system is set to cope with the additional leave entitlements that came into force in 2023 and that you are correctly recording all relevant data regarding your employees’ benefits, pay and conditions. If you require assistance, contact GroForth for details of the support services our team can provide.

Bookkeeping and accounts

Examples of basic tasks to carry out include checking debtors and chasing any money that you are owed.

Cashflow is crucial so look for opportunities to improve your working capital.

The current inflationary environment makes it more important than ever to control your costs. Check that your 2023 purchases are correctly coded. Recording this data accurately and on time will save you a lot headaches when it comes to preparing your budgets and forecasts and accounts.

Other administrative tasks include

reconciling balance sheets,
checking profit and loss accounts,
ensuring fixed assets are correctly recorded,
bank reconciliations

If backlogs have built up, now is the time to deal with them. If you don’t have sufficient resources in-house, outsourcing can be a cost-effective option, but, as with any business decision, there are pros and cons to consider. For tips on how to go about this, check out our article on the business case for outsourcing.

Need help?

The last quarter of the year is a good time of year to review your administrative processes. Streamlining your bookkeeping and payroll is a great way to improve your overall operational effectiveness. If this is a priority for your business in 2024, contact GroForth to find out more about how our services can help you.

Additional Leave Entitlements Introduced in 2023

Mon, 16 Oct 2023 13:20:48 GMT

Two new leave entitlements came into force in 2023. These are designed to facilitate employees who need to take time off work in certain urgent circumstances. Employees also now have the right to request remote working. GroForth’s Michelle summarises what’s involved in:

• Medical Care Leave

• Domestic Violence Leave

• Right to request Remote Working

Medical Care Leave

This came into effect on 3 July 2023. It entitles employees to up to 5 days unpaid medical care leave in any consecutive 12-month period. It applies in situations where, due to an urgent medical reason, an employee has to take time off work to care for a child, spouse, civil partner, cohabitant, parent, grandparent, or sibling. When availing of Medical Care Leave, your employees must notify you in writing as soon as possible and you must also accept the notification in writing. Both documents must be recorded and kept in case they are required at a later date.

Domestic Violence Leave

This new form of leave came into effect on 27 November 2023. It applies where an employee needs to take time off work because of domestic violence. Employees availing of Domestic Violence Leave can take to up to 5 days paid leave. Guidance for employers, including a policy template for Workplace Supports for Employees Affected by Domestic Violence is available on the Domestic Violence at Work website.

Right to request Remote Working

The two new entitlements outlined above are among a number of measures introduced in the Work Life Balance & Miscellaneous Provisions Act 2023. The legislation also contains a new entitlement for employees to request remote working. This came into effect on 7 March 2024. While an employee can request remote working from their first day in a new job, they must have 6 months of continuous service before the remote working arrangement can start. A code of practice for employers is available on the Workplace Relations Commission website.

Changing Your Payroll Service Provider

Mon, 16 Oct 2023 12:55:03 GMT

If your payroll provider is not meeting your needs, the last quarter of the year is a good time to explore other options. In this article, GroForth’s Michelle explains:

• The advantages of working with an experienced payroll service provider

• What to do if your current provider is not satisfying your needs

• How to find a new payroll service provider

• How to choose the right time to switch your payroll service provider

The advantages of working with an experienced payroll service provider

There are a lot of advantages to working with an experienced payroll service provider. It saves time, reduces stress and gives you confidence that you are running your payroll correctly.

As well as streamlining your payroll process, a good payroll service will ensure that you keep up with all the latest payroll developments. They will also help you spot potential problems before they develop so that you can investigate and resolve these issues without delay.

But what do you do if your current provider is not able to supply the level of service that you require?

This could be because your business is growing and your needs are becoming more complex—or it might simply be that your payroll provider doesn’t realise they are not meeting your requirements.

It’s important to get to the root of the problem before deciding to switch to a new provider. So, start by having a chat with your existing service and see if they can step up their offering. If it turns out that you have outgrown them, now is a good time to research other options with a view to switching to a new payroll service at the start of the New Year.

How to find a new payroll service provider

Some basics to check when evaluating payroll service providers include:

• Are they properly qualified? It’s important to check that the outsourced payroll provider you choose is qualified and adequately trained to deliver services to the standard that you require. At a minimum, you should check that they keep up to date and comply with relevant tax, employment and AML requirements. It’s also important that they use industry-standard payroll software and provide a confidential and secure service. Remember, any failings in their system can land you in trouble if things go wrong.

• Do they invest in training to ensure that their payroll operators keep up to date with the latest rules and regulations?

• Have they staff available to cover if the person who usually operates your payroll is on leave or absent through illness?

How to choose the right time to switch your payroll provider

In terms of timing, while the last quarter of the year is a good time to research your options, it’s advisable to delay switching to a new provider until the start of the New Year. This will help avoid operational complications at year-end.

Need help?

GroForth provides payroll support for a wide range of businesses across Ireland. If you would like to find out more about our services, please check our Payroll Services page and/or contact a member of our team.

Employers - Are You Ready for Enhanced Reporting of Employee Benefits

Tue, 26 Sep 2023 14:32:05 GMT

Enhanced reporting requirements, due to come into effect on 1 January 2024, will affect employers who provide certain benefits to their employees or directors.

From 1 January 2024, under an Enhanced Reporting Requirements (ERR) measure introduced in Finance Act 2022, mandatory reporting of certain employee benefits is due to come into force.

How will these Enhanced Reporting Requirements affect me?

Many employers provide work-related benefits for their teams. These benefits typically include things like:

reimbursing work-related travel and subsistence expenses
providing a tax-exempt daily allowance of €3.20 for remote workers to offset the additional heating, electricity and broadband costs they incur when working from home
rewarding employees by providing benefits like a voucher at Christmas under the Small Benefit Exemption scheme.

The Enhanced Reporting Requirements mean that you will have to collect information about ‘reportable benefits’ and submit it to Revenue in real time using the Revenue Online Service (ROS). ‘Real time’ means that the submission must be made on, or before, the payment date to the employee.

What are ‘reportable benefits’?

Three ‘reportable benefits’ are included in the new requirements:

Small benefit exemption
Remote working daily allowance
Travel and subsistence

However, as the requirements that come into effect on 1 January 2024 represent Phase 1 of the new regime, it is likely that other benefits may be included in future.

How can I get ready for these enhanced reporting requirements?

With these enhanced reporting requirements now only weeks away, it’s important to make sure that you will have the necessary information available when the time comes to make your first submission. Now is the time to check that you have processes in place to collect, record store and submit the relevant documentation and that your systems enable you to access this information in a timely and secure manner.

In our next blog, we will look in more detail at the information that Revenue will require. In the meantime, if you are a GroForth client and have questions about ERR, please contact a member of our team.

Why Your Business Needs a Regular Payroll Health Check

Wed, 02 Aug 2023 10:42:23 GMT

Payroll errors can be very expensive. A good way to avoid errors is conduct regular payroll health checks. In this article, GroForth’s Michelle explains:

• Why your business needs a payroll health check

• Common payroll errors

• What to look at in your payroll health check

• How payroll health checks can help you manage compliance risks

Why your business needs a payroll health check

Your business’s pay bill is usually its biggest cost so payroll errors are therefore a very significant financial risk. We recommend conducting a payroll health check at least once a year to make sure that your employee details are current and correct, that leavers have been removed from your payroll and that your payroll processes are up to date and comply with all relevant tax, employment and data protection legislation.

Payroll errors

Examples of common payroll errors include:

• poor record keeping,

• failing to keep up to date,

• misclassifying employees

• Calculation mistakes.

Most of these errors can be picked up and corrected when you conduct regular payroll health checks.

What to look at in a payroll health check

The purpose of the health check is to confirm that you are processing wages based on up-to-date, accurate information and that any relevant changes to Revenue or employment law are being taken into account. The following are examples of some basic checks to include:

• Check that your list of employees is up to date and correct,

• Check that pay rates and hours are being recorded accurately,

• Verify that the number of payroll runs is correct (for example, if you pay your employees monthly, you should only have 12 payroll runs in the year)

• Review your payroll calculations and remember to check that variable payments such as bonuses or commissions are being calculated correctly

• Check that you are complying with the latest Benefit-in-Kind rules

• Confirm the status of workers (this is particularly important if you have off-payroll workers such as contractors. If in doubt, check Revenue’s Code of Practice on Determining Employment Status),

• Check that you are processing leavers and joiners correctly.

How payroll health checks can help you manage compliance risks

Under the Organisation of Working Time Act, your employees have various rights regarding holidays, maximum working periods and rest times. A payroll health check will help you check that you are complying your obligations under this legislation.

Likewise, under tax legislation, your obligations include informing Revenue every time you pay your employees. You must also provide your employees with a payslip showing their gross wages and details of the various deductions such as Income Tax, PRSI, USC, Local Property Tax, health insurance and pension contributions. If you don’t fulfil these obligations, you leave yourself open to significant fines or penalties.

You also have obligations regarding data privacy and security. This is particularly important as payroll can be a target for cybercrime.

So there are very good reasons to ensure that you set up your payroll correctly in the first place and then conduct regular checks to make sure that your processes stay up to date and continue to comply with your various legal, tax and data protection obligations.

Need help operating your payroll? Contact GroForth for details of our payroll services.

Digital Transformation - Why integration should be a priority when upgrading your accounting or payroll systems

Thu, 19 Jan 2023 15:47:22 GMT

Streamlining workflows to free up resources, cut costs and save time are key objectives of many digital transformation projects but successful outcomes usually depend on the ability to integrate with existing systems, says GroForth’s Michelle . This article examines:

• Digital transformation in the accounts department

• Why collaboration should be a priority

• Selecting solutions for accounts, payroll and other business functions

• Deciding who will use these solutions and how they will use them

• Data privacy and security considerations

• Outsourcing

Digital transformation is changing how businesses operate. Accounts and payroll are no exception and, increasingly, accounting and payroll solutions go well beyond recording and classifying business transactions to provide tools that support collaboration and analyse key performance indicators in real time.

We see this a lot in our work with GroForth clients. While individual businesses may differ in their rate of adoption of new technologies, there is growing awareness of the value of being able to digitally exchange data with partners like your HR, department, bank and Revenue, as well as having 24/7 access to up-to-date, reliable information online and via mobile apps.

Digital transformation in the accounts department

At the most basic level, in an accounts department, the processes that benefit from digitisation include:

• Generating invoices and statements

• Generating aged debtor and creditor reports

• Processing VAT information

• Processing bank reconciliations

• Integrating with your accountant’s systems

• Providing purchase order functionality

• Providing cost centre analysis

• Coping with foreign currency transactions

However, unlocking the real value of digitisation comes when you secure easy access to relevant, up-to-date information via tools that enable you to analyse internal data (and, potentially relevant sectoral or other external data) in realtime and take action to improve your business’s performance and profitability.

Collaboration should be a priority

Often, another objective for digital transformation projects is to accommodate integration, strengthening collaboration between internal departments to enable your organisation work more effectively with your key business partners.

Selecting solutions

When it comes to selecting solutions whether for accounts, payroll or other operational tasks, knowing where to start can be a challenge for small businesses, so it’s worth seeking advice from your accountant who will know what works well in businesses like yours.

Basic points to check include:

• Will the solution integrate with your HR, CRM and payroll systems?

• Is it compatible with your accountant’s systems?

• Can it take feeds of data from your bank and other relevant business partners?

To get the best out of your investment in technology it’s important to choose solutions that can meet your requirements, integrate with key partners, and have the capacity to grow with your business.

Who will use the system and how will they use it?

You also need to think about who will use the system. What knowledge do they have of accounting and bookkeeping? What training will they require? How will the system support your planning, preparation of budgets and forecasts, cost control, evaluation of employees' performance and prevention of errors and frauds? Will it streamline your processes and provide reporting templates that align with your key performance indicators? It is important that you and your users understand how to identify and leverage the data that drives performance.

Budget and other potential constraints

Before investing in new technologies, bear in mind that your choices may be constrained by budget and/or what you want the technology to do for you. Cloud-based solutions can be cost-effective and scalable for a small business but you need to assess the pricing structure, evaluate the support that will be available to you, and ensure that this will continue to meet your needs into the future.

Data privacy & security

It is obviously important to ensure that the technology solutions you choose comply with industry standards and enable you to meet your legal and regulatory obligations.

Data privacy and security are also critically important. The potential to fall victim to data breaches and cybercrime are a risk that every business needs to consider. You need to be confident that your information will be stored and processed securely. Questions to ask include:

• Where will your data be stored?

• Will your data be safe and secure?

• How will your data be backed up?

• How will it be restored in the event that your backups need to be relied on?

The outsourcing alternative

While integration, access to realtime business information and enhanced collaboration between internal departments and business partners are key benefits of digital transformation, not every business has the resources to invest in technology and/or the knowledge and skills to analyse and interpret data in-house. Depending on the functions you want to enhance or transform, outsourcing can be a sensible and cost-effective option, particularly for small businesses. Functions that are typically suitable for outsourcing include IT and HR support as well as accounts and payroll.

Need help?

GroForth provides bespoke virtual accounts and payroll services for businesses across Ireland. For information on these services and details of how we can help your business, please get in touch. During busy periods, the best way to contact us is by email.

How to Minimise the Impact of Payroll Errors

Thu, 05 Jan 2023 15:54:04 GMT

It’s important to anticipate payroll errors and have a strategy in place to manage the fallout if problems occur, says GroForth’s Michelle.

I wonder if (like me) you are promising to make more time for yourself this year? It’s a promise I often make but it’s invariably difficult to keep as demands from the business tend to quickly absorb any time that I manage to free up.

Yes, there are plenty of time-saving strategies worth implementing—delegating tasks, focusing on priorities, cutting down on time spent in unnecessary meetings or answering emails—but the time saved tends to quickly get absorbed elsewhere. This is particularly true if something goes wrong in the business and you have to deal with the impact.

Time lost through data errors

Unfortunately, human error can never be fully eliminated and unless mistakes are quickly spotted and corrected, they can have a significant impact not just on your time but across other departments and functions of your business.

Work processes today are increasingly automated and data driven which means that technology-related issues like unanticipated server downtime or data errors can cause significant disruption unless you have anticipated the problem and taken steps to control the impact.

Payroll errors

Take payroll, for example. Your payroll administrator relies on data provided from a variety of sources including employees, managers, HR and Revenue so it’s important to have systems and processes in place to ensure the accuracy of these data inputs.

However, like any other business process, payroll can run into unexpected problems if technical issues affect a file upload or someone misses a deadline and nobody notices until employees receive their payslips.

Few things are guaranteed to trigger a flood of incoming calls more than employees discovering they have been underpaid. It potentially affects their ability to meet their mortgage, childcare and day-to-day living expenses and can therefore damage their trust in you as an employer, potentially leading them to look for alternative career opportunities elsewhere. In the current market, finding, training and retaining employees is one of the most time consuming tasks facing business managers.

Likewise, errors that result in overpayment can be damaging for your business if they are not dealt with promptly.

Other errors arise from things like poor record keeping, failure to keep up to date, and misclassification of employees and contractors.

Managing the fallout from payroll errors

Unfortunately, even in the best managed companies, glitches will happen from time to time. In my experience, there are two key aspects for management and payroll administrators to focus on when payroll errors occur:

• From a payroll point of view it’s important to work out what has gone wrong, who has been affected, why the problem happened, what needs to be done to fix it, and what steps can be taken to prevent it from happening again. Getting to the bottom of these questions may require cooperation from other departments and your payroll team may need to collaborate with colleagues in management, HR and IT to implement whatever changes are needed to strengthen processes and prevent the problem from happening again. Bear in mind that the error may also need to be corrected with Revenue. Information on how to do this is available on the Revenue website.

• Communication is also critical.The earlier you let your employees know that that there is a problem and that you are working to fix it, the better. It is helpful to have a single point of information. If you have a HR department, perhaps they can liaise with payroll. This helps free payroll to focus on correcting the problem while HR keeps everyone informed of the progress being made to resolve the issue.

Payroll review

Time spent reviewing your payroll processes to identify any shortcomings and minimise the risk of future errors can be very worthwhile. If you don’t have the resources to do this yourself, GroForth may be able to help. For information on the payroll supports that we provide, please check our Payroll Services page.

Tools to improve cashflow management and make your business more efficient

Fri, 23 Sep 2022 14:44:02 GMT

Today, there are plenty of tools available to help you run your business—from cloud-accounting, payroll and time-recording to payment solutions like GoCardless and Stripe. Yet, until recently, while many businesses were willing to allocate budget to websites and digital marketing, in my experience they were often slower to recognise the benefits of adopting digital tools to assist with other business functions.

COVID-19 changed things. The pandemic really brought home the advantages of cloud-based technologies as business owners saw that the cloud could enable them and their employees to work remotely.

While accounting solutions like Xero and SortMyBooks had gained traction in recent years, the pandemic dramatically accelerated adoption of technologies like Zoom, Skype for Business, Microsoft Teams and Slack.

Digital payment solutions

With more business taking place online, one of the most interesting trends to follow has been the development of digital payment solutions. Recently, I have been using GoCardless which provides tools that enable businesses to receive and manage recurring payments through direct debit. This is a great way to save time on debtor management as it can effectively eliminate late payments.

GoCardless is just one of a number of digital payment solutions gaining popularity. Stripe, founded by the Collision brothers, has revolutionised online payments while Revolut has reportedly signed up 1 million users in Ireland.[1]

Solutions that help with business administration

As an experienced bookkeeping service provider, I always recommend that clients use cloud-based accounting. It is not just that this makes issuing sales invoices, record-keeping and running the business easier, it’s the 24/7 access from anywhere that is really valuable. When you understand how to interpret and use the financial information that your cloud-accounting system provides, you can set realistic targets and monitor progress towards achieving them in realtime. This can be a game-changer when it comes to streamlining processes, eliminating waste and improving profitability.

Digital solutions can also enhance personal effectiveness. I use the MyHours time tracking solution to identify my most valuable work and help me eliminate time-wasting activities.

“Revolut says it has signed up a million users in Ireland,” Irish Times 13 May 2020.

What to consider when selecting digital solutions

When selecting digital solutions for accounting, credit control, payroll or digital payments, I always suggest checking what your accountant recommends. Key questions to consider include:

What is your budget
What do you want the system to do for you?
Who will use the system?
What knowledge do they have of accounting and bookkeeping?
What training will they require?
Is the system user-friendly?
Where will your data be stored?
Will your data be safe and secure?
How will your data be backed up?
Does the system comply with relevant industry standards and regulatory requirements?
Is the system capable of growing with your business?
Can your accountant’s system support the accounts solution?
Can the system take feeds of relevant data from your bank?
Will the solution integrate with your HR, CRM and payroll systems?
What is the pricing structure?
What support is available?
Does the system have a mobile app?
Does the system provide you with reports your business needs?

What if I don’t have the necessary skills/capacity to use the system effectively?

Often, due to lack of time or because they have grown to a point where they can no longer keep up to date with administration, businesses either need to hire additional staff or outsource some administrative functions to a specialist service provider. Outsourcing is usually a smart, cost-effective option for a small business but it is very important to choose your service provider carefully. As with any decision, you need to examine the business casebefore making your decision. You also need to ensure that the potential payroll or bookkeeping service provider is properly qualified and invests in the ongoing training necessary to keep up to date with changing regulatory requirements so that they can operate your processes correctly.

Need help?

Whether you are a sole trader, an entrepreneurial start-up or an SME, GroForth can help you identify and select tools to make your bookkeeping and payroll more efficient. We will help you implement reliable systems and procedures so that you can be confident you always have accurate, up-to-date information available. Check out our bookkeeping and payroll service web pages for details.

Budgeting to Tackle Inflation

Fri, 27 May 2022 14:35:07 GMT

Business owners across Ireland face rising costs this year which means it’s more important than ever to plan ahead and allow sufficient time for budgeting, says Nikki Johns.

According to a recent Central Bank report, inflation is expected to average 6.5% this year before moderating to 2.8% in 2023 and 2.1% in 2024. This needs to be taken into account when reviewing your budgets and updating your business plan for the months ahead.

Two other significant recent developments that also need to be factored in to your budget include the introduction of statutory sick pay and auto enrolment pensions.

Statutory Sick Pay

The Government recently announced a new law which will give all workers in Ireland the right to paid sick leave. The plan is that sick pay will be paid by employers at a rate of 70% of an employee’s wage, subject to a daily maximum threshold of €110. When enacted, the new scheme will start with an entitlement to three days statutory sick pay per year, rising to five days in 2024, seven days in 2025, and ten days in 2026.

This is potentially a very onerous additional cost for employers, particularly hospitality, convenience stores and similar businesses where staff who are out sick need to be replaced in order to continue to serve customers. Business owners will need to work out how to meet the costs of the new scheme so that they can make appropriate provision in their budget for the coming year.

Pensions

The Government also plans to introduce auto-enrolment pensions which will give employees access to a workplace pension savings scheme co-funded by their employer and the State.

Employees who enrol in the scheme will have their pension savings matched on a one-for-one basis by their employer. The State will also provide a top-up of €1 for every €3 saved by the worker.

It is envisaged that auto enrolment will be gradually phased in, with both employer and employee contributions starting at 1.5%, and increasing every three years by 1.5% until they eventually reach 6% by 2034.

According to Minister for Social Protection, Heather Humphreys, all employees not already in an occupational pension scheme, aged between 23 and 60 and earning over €20,000 across all of their employments, will be automatically enrolled in the new scheme which is due to be set up by 2023 for employee enrolments in 2024. While participation in is voluntary, the scheme will operate on an ‘opt-out’ rather than an ‘opt-in’ basis.

If your business has employees who are not already in an occupational pension scheme, you will need to calculate the cost of auto-enrolment and make appropriate provision in your budget.

Tax debt warehousing

If your business availed of debt warehousing during the Covid-19 pandemic, now is the time to agree a payment plan with Revenue if you haven’t already done so. Again, remember to make provision for these payments in your budget.

Monitor costs

Throughout the year it is important to monitor your actual costs against what you budgeted for. Reviewing your management accounts on a monthly basis is the best way to do this. If your actual costs are higher than expected, you will need to address any relevant issues and update your budget accordingly. Keep an eye out for opportunities to eliminate waste and/or to make savings by renegotiating contracts, switching suppliers, or outsourcing functions like bookkeeping or payroll that require specialist skills.

If you are a GroForth client and require assistance with any of the issues highlighted in this article, please contact a member of our team.

Why You Need Management Accounts and How to Use Them

Fri, 20 May 2022 15:43:05 GMT

When costs are rising, it’s more important than ever to keep tabs on the cash coming in and going out of your business. In this article, GroForth’s Ashley explains:

• The difference between financial and management accounts

• How to prepare management accounts

• How to use management accounting information

• What to do if you don’t have time to keep your accounts up to date

When time is in short supply, bookkeeping and accounts sometimes go on the back burner. This needs to be nipped in the bud because left unattended it can exacerbate problems in your business and end up costing you money.

When I make this point to clients, I’m often asked to explain the difference between financial accounts and management accounts.

What is the difference between financial accounts and management accounts?

Financial accounting information is used to produce your annual financial statements. When your accountant prepares this document, the information it contains can be up to a year old.

Management accounts, on the other hand, are produced on a monthly or quarterly basis and are a planning and decision-making tool. When your management accounts are up-to-date and reliable, they contain information that can help you work out what’s working well in your business, and what needs to change. This, in turn, helps you to streamline business processes and improve your bottom line.

How do I prepare management accounts?

The information required for your management accounts is mostly contained in your bookkeeping and accounting records. It includes information about your company’s available cash, income from sales, accounts payable and money that you are owed. If you use software like Xero or SortmyBooks, these can be used to generate various management reports that will help you understand your business finances so that you can plan ahead and budget more effectively.

How do I use management accounting information?

When costs are rising, as is the case at the moment, it’s more important than ever to understand where the cash in your business is going. Management accounts enable you to monitor your business’s key performance indicators and compare your actual performance and outcomes to your budget on a monthly or quarterly basis.

Where your management accounts highlight an issue such as an increase in late payments, you can look for potential solutions — perhaps, switching to GoCardless payments or improving your credit control procedures. Likewise, if you spot a downward trend in orders or sales, you can take corrective action before the problem gets out of control.

You can also use management accounts to identify things like your most profitable products and services. This can help you to decide how and where to allocate staff and other resources within your business. Better still, provided you keep your records up to date, management accounts give you real-time information about your business all year round.

What if I don’t have time to keep my records up to date?

If you’re struggling to find time for your bookkeeping and accounting, the chances are your accountant will already have suggested finding an external bookkeeper. When selecting your service provider, check that they can provide a reliable, relevant management accounting service.

GroForth’s management accounting service is designed to help you improve your business performance and increase profitability. To find out more about our services, please contact a member of our team.

Five Situations Where You Need Business Accounts

Thu, 07 Apr 2022 15:36:41 GMT

Your accounts are not just needed for compliance purposes. You may also be asked about your business’s finances when applying for loans or entering business awards. In this article, GroForth’s Geraldine lists examples of situations where your accounts are needed, including when you are:

• Applying for a bank loan

• Raising finance

• Applying for a mortgage

• Entering a Business Awards competition

• Merging or selling your business

I’m always surprised to come across business owners who see bookkeeping as an administrative burden that they have to endure to keep Revenue happy. This is because successful businesses understand that to make good business decisions, you have to have access to accurate accounts.

Effective financial processes are the basis of sound management and are more important than ever in the current climate where inflation is rising. If you don’t keep tabs on your costs, you can’t rely on your forecasts.

But decision making and compliance are not the only reasons to keep your books in order. Set out below are a few examples of common situations where you need to produce your accounts.

1. Bank loans

If you are applying for a bank loan, financial institutions will generally request certain documentation to support your application. Financial and management accounts, cash flow projections, and an up-to-date list of your debtors and creditors are typical examples of the information they are likely to request.

2. Raising Finance

If you’ve ever watched Dragons’ Den, you’ll have a good sense of the importance of financial information to potential investors. Before putting cash into your business, an investor will want to feel confident that you understand your business finances and have effective management and financial procedures in place.

3. Mortgage

When you’re self-employed, you’ll need to produce your business accounts if are applying for a mortgage as the lender will want to see evidence that you have a stable income.

4. Business Awards

Winning or being short-listed for a business award can be a great way to build profile and network with other business owners. Awards also enhance customer and investor confidence in your business and can even help you attract and retain employees. Generally, the awards application process will require that you provide documentation to support your entry. Your accounts are be a good way to show evidence of growth, trends over time, and so on. Applying for an award forces you to think about how you compare to competitors. This can be a great way to identify areas for improvement in your business.

5. Merging or Selling your Business

If you intend to merge or sell your business, it’s important to begin planning a couple of years in advance. Potential purchasers or merger partners will want to see how your business is performing. Typically, financial accounts for the last few years will be needed along with management accounting information such as forecasts, cashflow projections and information on creditors and debtors.

Today’s cloud accounting systems make it relatively easy record transactions and manage your accounts. However, these systems are only effective if you keep your data entry accurate and up-to-date. Often, business owners complain that accounting tasks take too much time away from more productive aspects of running the business. If you are in this situation and require support, GroForth’s bookkeeping team would love to help. For details of our services, please our bookkeeping page.

Top Tips to Get Better Value from Your Business Accounts

Fri, 01 Apr 2022 15:31:08 GMT

In the current economic environment, effective financial management and reliable forecasts are more important than ever. Now is the time to use the information in your accounting system to help you identify opportunities to make savings.

Your business accounts contain a lot of information that can help you streamline processes and improve profitability. Here are 10 key areas to check.

1. Accounts system: If you are not already using a cloud-based accounting system, now might be the time to make the move. When correctly implemented, these systems are cost-effective, save time and help you make better business decisions.

2. Costs: With energy costs soaring, this is definitely the time to review your current spend on utilities. Look for opportunities to obtain better value — eg by switching energy provider.

3. Sales: Use the information in your accounting system to analyse which are your most profitable products/services. This will help you plan what to focus on in the coming months.

4. Invoicing: Issue invoices promptly and make it easy for your customers to settle their account. Services like GoCardless may be worth considering if you want to facilitate recurring payments through direct debit.

5. Debtors: Keep a close eye on your debtors and promptly chase any money that you are owed.

6. New customers and suppliers: Depending on your business, consider running a credit check before taking on new customers or suppliers. Automated credit checking systems provide access to real-time information that can help you avoid high-risk customers and/or expensive mistakes.

7. Stock control: While it is generally good to avoid holding too much stock, supply chain difficulties in the current market may mean that you need to hold more stock than usual. Check that your stock control policy is appropriate.

8. Rent: Attitudes to remote working changed a lot during the pandemic as businesses realised that facilitating remote working did not necessarily undermine productivity. Take advantage of the experience and lessons learned to decide whether you can reduce your requirement for office accommodation and make savings on rent.

9. Outsourcing: Assess the pros and cons of outsourcing non-core functions. Depending on your business, this can be a good way to free up staff time and/or overcome recruitment difficulties. However, if you decide to outsource payroll or bookkeeping remember to check that your service provider is properly qualified and has the necessary resources to deliver the level of service you require.

10. Recruitment: Finding employees is a challenge for many businesses at present with a shortage of skilled workers in various sectors. You may need to pay more to attract and retain staff so check that your salary forecasts are realistic.

Regardless of the prevailing economic conditions, reliable accounting information and effective financial controls are critical tools for effective management of your business. It’s not just a question of having access to accurate bookkeeping information, it’s also knowing how to use that information to improve your bottom line. If you need assistance, GroForth would be happy to help. For details of our services, check out our bookkeeping page.

Are You Issuing Payslips Each Time You Pay Your Employees?

Tue, 01 Mar 2022 16:22:06 GMT

Occasionally, we get queries from employers about what information to include on employee payslips. In this article, GroForth’s Geraldine answers frequently asked questions, including:

• Do you have to issue payslips to your employees?

• What happens if you don’t issue a payslip?

• What information must be included on a payslip?

• What deductions must employers make?

• Can I make deductions for breakages or till shortages?

• Is it ok to email payslips?

• What happens if there’s a mistake on a payslip?

Do I have to issue payslips every time I pay my employees?

Yes. Under Section 4 of The Payment of Wages Act, employers must provide employees with a written statement specifying the gross amount of the wages payable and the nature and amount of any deductions.

What happens if I don’t issue a payslip?

If you don’t provide your employees with a payslip, a Workplace Relations Commission Inspector can issue a Fixed Payment Notice. The statutory fine is €1,500. According to the WRC’s latest Annual Report, eight Fixed Payment Notices were issued in 2020.

What information should I include on the payslip?

The payslip must show the gross amount of the wages payable and details of any deductions.

What deductions should I include?

Employers are required to deduct PAYE and PRSI from their employees’ wages. Remember, each time that you make a payment to an employee, you have to notify Revenue of the payment amount, payment date and the Income Tax, Universal Social Charge and Local Property Tax deducted. Employees can view the figures you report to Revenue on the Revenue website. If there is any difference between the information you provided to your employee and the figures you provided to Revenue, this will need to be rectified.

You can also make deductions for things like pension contributions, health insurance and sports or social club membership depending on what you have agreed with employees in their employment contract.

Can I make deductions for breakages or till shortages?

While it may be possible to make deductions for a breakage or till shortage, it depends on the circumstances as there are restrictions on these types of deductions. You can find more information on the Workplace Relations Commission website.

Are there any rules about how to issue payslips? Is it ok to email them?

Payslips can be issued on paper, by email or via an online system however it is your responsibility as an employer to ensure that your employees’ payslips are treated confidentially. This includes complying with GDPR. In previous articles, we explained the importance of ensuring that the IT systems you use for payroll are kept up to date and access to systems limited to authorised individuals only.

What happens if there is a mistake on a payslip?

It’s important to catch and correct mistakes quickly as it can be difficult to address problems retrospectively. It’s a good idea to encourage your employees to check their payslip and notify you immediately if they think there is an error.

Need help with payroll or issuing payslips?

GroForth’s payroll service for clients includes calculating pay, processing payroll and issuing payslips. We can also look after your Revenue PAYE registration, manage tax allowance and holiday pay entitlements, and communicate with Revenue on your behalf. For more information, please get in touch.

What we learned during the pandemic

Thu, 17 Feb 2022 14:29:10 GMT

The last two years brought plenty of challenges but here at GroForth, we also learned a lot about our strengths and our priorities, says SARAH DALY.

GroForth has always been agile. We pride ourselves on our ability to take change in our stride but the last two years really brought home how things like our early adoption of cloud-based technologies, video conferencing and flexible working have strengthened our resilience. These were some of the key factors that enabled us to continue serving clients seamlessly even when we couldn’t get in to the office.

Technology

We weren’t alone in enjoying the benefits of technology. For many of our clients, the ability to do business online saved the day. It enabled them to adapt, to be flexible, to keep in touch and to remain productive.

In common with other businesses I’ve spoken to, we found that productivity actually increased during the lockdown—so much so we’re taking what we learned in the future. There were fewer distractions and less time spent travelling. Now we know we can leverage that experience to continue to deliver more for our customers and our staff.

Work/Life Balance

However, for all the benefits of cloud technologies, Zoom, Skype and various online platforms, another lesson from the pandemic was that too much screen time drains our energy. We need time out to take better care of ourselves. Better physical and mental health and prioritising a more sustainable work/life balance are as important for our business as they are for personal wellbeing.

Relationships

Thanks to the pandemic, we also appreciate the importance of relationships more than we did before—whether it’s the support of our families, our staff, our customers, suppliers, business partners, our friends, our communities or our service providers. Learning to place more value on our business and personal relationships and support structures may turn out to be one of the most valuable lessons of the last two years.

Cashflow

While the pandemic brought many changes, cash is still king. Managing cashflow correctly not only enhances business performance, it also improves our ability to withstand a crisis and puts us in a stronger position to bounce back.

Good cashflow management will be very important in the coming months so it’s worth taking time to check that you are getting the basics right— invoicing on time, making it easy for customers to pay you, chasing money that you are owed and credit checking new customers.

Likewise, strong financial controls are important because they help minimise the risk of running out of cash. Now is the time to sort out your monthly management accounts and do your financials on a timely basis. We previously shared tips on how to set financial controls. If you need help, contact our management accounting team for assistance.

New opportunities

The disruption of the last two years helped some businesses uncover completely new opportunities while others face new competitors and/or a dwindling sales pipeline. After any period of significant change, it’s worth taking a really hard look at your business. Is it time to change structure, diversify, merge with another business or enter into some other type of collaborative arrangement? If you have growth ambitions, could this be the time to look for potential acquisitions? Your accountant is the best person to advise you on these matters.

For GroForth, technology will continue to be a key driver of change and innovation in our business as we work to enhance the bookkeeping and payroll services we provide for our business clients and the back office support we provide for accounting firms. We’ll take good note of the all the lessons we learned in the last two years and bring them with us as we step into the future.

Employment developments that impact payroll

Fri, 04 Feb 2022 14:24:25 GMT

Payroll operators always need to keep an eye on employment-related legislation. Nicki Johns highlights some recent developments.

Statutory Sick Pay Scheme

A draft Bill containing measures to introduce a Statutory Sick Pay Scheme was recently published. Under this proposed legislation, employers will be required to pay their employees sick pay, starting with three days per year in 2022. The rate will be 70% of an employee’s wage, subject to a daily threshold of €110. The purpose of the legislation is to bring Ireland into line with other advanced countries in Europe. Measures included in the legislation will be introduced on a phased basis. It is envisaged that employees will eventually be entitled to ten days sick pay per year. Employers will need to keep an eye on Bill as it progresses through the Houses of the Oireachtas as the potential payroll costs are likely to be significant and will need to be built in to budgets.

Adopted Leave
The Family Leave and Miscellaneous Provisions Act 2021 (which amends the Adoptive Leave Act 1995) enables a couple who jointly adopt a child to choose which parent takes adoptive leave. The parent who does not get adoptive leave is entitled to paternity leave.

Gender Pay Gap

The Gender Pay Gap Information Act 2021 was signed into law by the President in July. When commenced, this Act will require certain employers to publish information relating to the remuneration of their employees by reference to gender. Where there are differences in remuneration, employers will have to publish statements setting out the reasons for the differences and the measures (if any) they have taken, or propose to take to eliminate or reduce the differences.

Determining Employment Status

The Code of Practice for Determining the Employment or Self-Employment Status of Individuals was updated in 2021. This Code highlights criteria which can be used to clarify an individual’s employment status.

Right to Disconnect

A Code of Practice for Employers and Employees on the Right to Disconnect published by the Workplace Relations Commission gives employees the right to switch off from work outside of normal working hours, including the right to not respond immediately to emails, telephone calls or other messages.

Right to Request Remote Work

Plans for a new law giving employees a right to request remote work will see draft legislation published in the near future, according to a recent speech by Tánaiste Leo Varadkar in Seanad Éireann. The draft legislation has taken longer than expected partly due to issues raised in a public consultation last year. In the meantime, a Remote Working Checklist for Employers and Guidance for Working Remotely are available online.

Follow GroForth on LinkedIn for our latest updates and news. Information on the payroll support we provide for business owners is available on our Payroll Services page or contact me to discuss your specific requirements.

Tips & Gratuities - Requirements for Employers

Mon, 10 Jan 2022 15:31:50 GMT

New requirements regarding the treatment of tips and gratuities came into effect on 1 December 2022. In this article, GroForth’s Geraldine summarised the key changes.

In the past, the tips and gratuities given to employees by satisfied customers were often in cash and did not affect payroll. While tips and gratuities have always been taxable, it was up to employees to declare them in their tax returns. However, electronic payments are now widely used and new legislation specifies that the tips and gratuities received by workers in certain sectors will in future have to be distributed fairly by employers and managed through payroll.

The new requirements, introduced by the Payment of Wages (Amendment) (Tips and Gratuities) Act 2022, came into effect on 1 December 2022. The sectors affected include hotels, restaurants, cafes, bars, and hair and beauty salons to name just a few. (For the full listing, see the Workplace Relations Commission Information Guide)

Tips & Gratuities — Key measures for employers

The legislation introduces a number of requirements that will impact employers and payroll operators. The key changes relate to the distribution of electronic tips and gratuities.

• Employers must clearly display their policy on how card and cash tips, gratuities and mandatory charges are treated. Where a business uses contract workers, the policy regarding tips and gratuities for these workers must also be displayed. Platform businesses, whose workers are not direct employees but whose work attracts tips and gratuities must display a notice stating whether and how tips, gratuities and service charges are distributed amongst contract workers and the amounts distributed.

• Tips and gratuities cannot form part of an employee’s basic pay.

• Employees have a legal entitlement to receive tips and gratuities paid in electronic form and employers must distribute these payments in a fair and transparent manner. In the event of complaints arising, the Workplace Relations Commission will assess ‘fairness’ taking into account factors such as seniority/experience, hours worked, sales generated, agreements or consultations that have taken place between the employer and employee and whether the employee is full or part time. For further details, see the Workplace Relations Commission website.

• Employees must be given a statement no later than 10 days after tips/gratuities have been distributed showing the amount of tips obtained and the portion paid to the individual employee

• Charges such as a ‘service charge’ that could lead a customer to believe that the charge is going directly to employees, must be distributed to staff as if they were tips or gratuities received by electronic means.

Avoid delay

As the Payment of Wages (Amendment) (Tips and Gratuities) Act 2022 is already in force, and failure to comply can lead to fines, it’s important that employers make any necessary changes to their policies and payroll procedures without delay. GroForth clients who require assistance should email a member of our team.

7 Payroll Mistakes to Avoid this Year

Thu, 06 Jan 2022 16:16:37 GMT

Payroll mistakes are almost always time-consuming to resolve and often involve additional costs for the employer. The start of a new year is a good time to check that your procedures are in order. In this article, GroForth’s Geraldine sets out 7 areas where payroll mistakes commonly occur:

• Payroll submissions to Revenue

• Failure to keep up to date

• Poor record keeping

• Calculation errors

• Inadequate backups

• Misclassification of employees and contractors

• Third party errors

1. Payroll submissions to Revenue

Top of the list of errors to avoid are incorrect payroll submission requests to Revenue. If you do make a mistake, always correct it as soon as possible either through your payroll software or through the Revenue Online Service (ROS).

2. Failure to keep up to date

Employment legislation changes all the time and because these changes often impact payroll, it’s important to ensure that your payroll provider keeps up to date. Always check that your provider is properly qualified and invests in ongoing training and development. If you don’t have in-house capacity to keep up to date, it may be time to outsource your payroll.

3. Poor record keeping

Poor record keeping will inevitably lead to mistakes. Overtime and employee annual leave entitlements may be miscalculated. Timesheet errors may go unnoticed. Sick leave absences may not be recorded. Employees may be on an incorrect pay scale. Leavers may not be removed on time. All of these issues are time consuming to sort out, particularly if they go unnoticed for a prolonged period. Time invested in ensuring that your record-keeping processes are accurate, up-to-date and robust will help you avoid expensive headaches down the line.

4. Calculation errors

Incorrect calculations are another potentially expensive mistake. Payments to part-time employees are often the culprit in this category, particularly where the hours worked vary from week to week. Errors calculating maternity pay and holiday entitlements can also crop up. Implementing a reliable system for recording time worked will help avoid these mistakes but you need to make sure your employees, managers use the system correctly.

5. Payroll backups

Failure to backup your payroll data is another common mistake. Regular backups will protect you if things go wrong.

6. Misclassification of employees and contractors

Misclassification of employees and contractors is another mistake that can prove very expensive because it affects the employee’s income tax and PRSI payments. Guidance on how to determine employment status is available on the Revenue website. See also this Code of Practice for Determining the Employment or Self-Employment Status of Individuals.

7. Third party service providers

You don’t want to end up being liable for someone else’s mistakes so if you are using third party service providers it’s very important to check that their procedures, including data protection procedures, comply with relevant Revenue, employment and anti-money laundering regulations. As mentioned above, it’s also important to make sure that your payroll operator is properly qualified.

Follow GroForth

Follow GroForth on LinkedIn for our latest updates and news. Information on the payroll support we provide for business owners is available on our Payroll Services page.

Key Management Mistakes to Avoid Making this Year

Wed, 05 Jan 2022 15:41:27 GMT

Keeping an eye on all aspects of your business is difficult at the best of times, and more so than ever in the current fast-paced business environment. GroForth’s Michelle highlights some common mistakes to avoid, such as:

• Monitoring the wrong KPIs

• Focusing on sales rather than on profit

• Poor record keeping

• Reacting too slowly to interest rate changes

• Failing to keep up to date

• Hiring rather than innovating or outsourcing

• Poor financial and credit controls

• Not investing in technology

• Neglecting backups

While it’s true that we learn from our mistakes, the lessons can be very expensive so it’s worth avoiding the most common mistakes when we can.

• Monitoring the wrong key performance indicators. The systems that your business relies on contain a wealth of information which when properly analysed and used can unlock opportunities and save you time and money. Too often, we see businesses using generic KPIs Instead of designing their own KPIs to match their strategic objectives.

• Focusing on sales rather than profit margins. When costs are rising, it’s more important than ever to focus on maintaining good profit margins. A well managed sales pipeline will help you streamline your processes and convert prospects to customers. However, remember that maximising your ability to grow revenue is only worthwhile if the prospects you focus on generate profit for your business.

• Poor record keeping. Administrative tasks often fall behind when there are more urgent pressures elsewhere in the business but poor record keeping leads to mistakes. Neglecting your business accounts can affect your ability to access loans while payroll mistakes can be time consuming to sort out, particularly if they go unnoticed for a prolonged period. Maintaining accurate records will help you avoid expensive headaches. If you don’t have the resources to manage your processes effectively in-house, GroForth may be able to assist you. Contact us for details.

• Reacting slowly to interest rate changes. It is important to monitor interest rates and assess the impact that changes will have on your input costs. Managing cashflow is vital.

• Not keeping up to date. Legislation changes all the time. In recent times, we’ve seen ne w Statutory Sick Pay rules come into force, new requirements regarding the treatment of tips and gratuities , and various new employee leave entitlements. Changes that impact payroll can be very expensive if you don’t comply on time so it’s important to ensure that your payroll administrator keeps up to date. If you’re not confident that you can manage payroll or other administrative processes effectively in-house, it may be time to outsource.

• Hiring rather than innovating or outsourcing. Inflationary pressure in the economy is driving up wages and this, combined with a skills shortage in certain sectors, is making hiring expensive. Before taking on additional staff, particularly administrative staff, it is worth looking at alternatives like outsourcing.

• Poor financial control / poor credit control. Keeping a close eye on your finances and debtors is more important than ever in the current trading environment. Your systems should flag up emerging problems. If and when this happens, it’s crucial to act quickly. Problems that are ignored have a nasty tendency to escalate.

• Not investing in technology. Tools that integrate and streamline processes are increasingly affordable and accessible. Making the most of available technologies is a great way to free up time and resources.

• Failure to backup your data. This is another common mistake. Regular backups are essential and remember to test that they work correctly as you may need to rely on them if things go wrong.

Make time to manage

Your time is precious and one of the best ways to maximise it is to clarify your goals and focus on avoiding the mistakes (and customers) that waste your time and resources. We understand that with limited capacity it is not always possible to do all that needs to be done. GroForth’s services are designed to ease your administrative burden, freeing you to concentrate on those aspects of your business that generate the greatest return. To find out more about how we can help your business, please get in touch.

Finance Bill 2021 — the measures that will impact payroll

Wed, 08 Dec 2021 14:18:52 GMT

Several changes affecting payroll are due to come into effect from 1 January 2022. SARAH DALY summarises the key issues.

Finance Bill 2021 completed its fifth stage in the Dàil this week (2 December). When enacted, this Bill will implement the taxation changes announced on Budget Day. The Bill will now be debated in the Senate and is due to be signed into law by the President before the end of the year.

Changes that impact payroll:

The full text of the Finance Bill is available on the Department of Finance website where you can also view any amendments that may be made as the legislation makes its way through the Oireachtas.

It is important to be aware that a number of changes announced in the Budget will affect payroll. These include:

Income tax — an increase in standard rate band and tax credits
Universal social charge — an increased USC threshold
Remote working relief -- enhanced relief for employees working from home
Employment Wage Subsidy Scheme — extension of the EWSS scheme to 30 April 2022
Minimum wage — 30 cent increase in the national minimum wage rate from 1 January 2022

Income Tax

As announced in the Budget, the standard rate band for Income Tax is being increased by €1,500 with effect from 1 January 2022. There is also a €50 increase in each of the personal tax credit, employee tax credit and earned income credit.

USC Changes

The USC 2% threshold is being increased from €20,687 to €21,295 to take account of an increase in the national minimum wage.

The reduced rate of USC for full medical card holders under 70 years of age whose individual annual income does not exceed €60,000 is being extended to the end of the 2022 tax year.

Remote Working Relief

From 1 January 2022, individuals can claim an income tax deduction amounting to 30% of the cost of vouched expenses for heat, electricity and internet services, apportioned based on the number of days they worked from home during the year.

Employment Wage Subsidy Scheme (EWSS)

The Employment Wage Subsidy Scheme (EWSS) is being extended in graduated form up to 30 April 2022 however the scheme will close to new employers from 1 January 2022.

National Minimum Wage

The national minimum wage rate for individuals aged over 20 will increase to €10.50 per hour from 1 January 2022.

National Minimum Wage Rates from 1 January 2022

Other Measures

New measures that will impact workers in specific sectors including a change affecting the taxation of international flight crew.

GroForth Payroll Clients

GroForth is monitoring the progress of the Finance Bill through the Oireachtas so that our team will be ready to implement the changes in time for your 2022 payroll.

In the meantime, if you have questions or concerns, please let us know.

Time to Get Real about Realtime Bookkeeping and Payroll

Tue, 30 Nov 2021 14:03:12 GMT

Something we find when talking to business owners about real time bookkeeping and payroll information, is that the concept of ‘real time’ means different things to different people, writes SARAH DALY.

As well as confusion about what ‘real time’ means, there is sometimes insufficient awareness of the importance of maintaining accurate records in order to get the best out of the realtime systems the business has invested in.

So, let’s take a look at what ‘real time’ is really all about from a bookkeeping and payroll perspective.

Real time information …

Enables you to run your business more efficiently
Enables you to spot emerging problems and address them before they escalate
Improves decision-making

But …

Transactions must be recorded promptly and accurately.

Real time bookkeeping

Most businesses today use cloud accounting solutions to manage their bookkeeping records. The advantages of these systems are that they streamline time-consuming processes and provide ‘real time’ access to information. ‘Real time’ in this context means:

Immediate access to data that has been entered and processed in the system, and

Ability to access this data 24/7 on any of your authorised devices.

That’s the theory. In reality, though, the value of ‘real time’ information can be undermined if the procedures that underpin it are not properly maintained.

When you think about it, this is obvious. Unless orders are entered on the system, you won’t be able to view them. If invoices aren’t raised on time, you won’t be able to access them either. If your data entry is error prone, those errors will carry through into your ‘real time’ dashboards. If backlogs developed because you and your team were too busy, or because your team was disrupted by COVID-19 restrictions, that too will undermine your real time information.

A more fundamental problem is that if you can’t access accurate, up-to-date information, that can have really serious consequences for your planning and decision-making, particularly during periods of volatility or uncertainty such as we are experiencing at the moment.

Payroll

Similar issues affect realtime payroll information. Unless the data entered on your system is up-to-date, accurate and complete, your payroll will be error-prone.

There’s a lot that can go wrong when you have incorrect data in your system —

Employees on incorrect tax bands
Incorrect or late wage payments
Incorrect deductions
Incorrect payslips
Workers labelled as ‘self employed’ when they should be classed as employees

All of these have knock-on consequences —not just for your own oversight and management of your business but also for the returns that you submit to Revenue.

So, what’s the solution — How do you get real about real time?

The most important first step is to identify any of your procedures that need improvement and tighten up. This is something to keep in mind when setting next year’s goals with your team. If backlogs have built up, now is the time to deal with them. If your business has grown and you simply don’t have time to keep your bookkeeping up to date or run your own payroll, perhaps it is time to consider recruiting a bookkeeper or payroll administrator or outsourcing these functions to a specialist provider like GroForth.

When selecting providers, always check that they are properly qualified and plan the handover for the start of a New Year as this will help ensure a smooth transition.

Accurate, reliable bookkeeping and payroll records are essential in every business.

If you need support or advice on how to get the best out of your real time systems, contact GroForth for assistance.

When is the Right Time to Change Payroll Provider?

Thu, 04 Nov 2021 14:20:54 GMT

Just because your current payroll provider is not meeting your business requirements doesn’t mean they can’t, says Sarah Daly.

Are you getting all of the payroll services that you want? If not, have you asked your payroll provider if they can provide the additional information that you need?

Over the years, many GroForth payroll clients initially contacted us because they were not satisfied with their existing payroll provider. From experience, I have learned that poor communication is often a factor in their dissatisfaction. So, before advising any business owner to switch to a new payroll provider, I always encourage them to list the services that they want which their current payroll provider is not delivering. When you are clear about your requirements, you can then ask your payroll operator if they can provide the additional services. Often, the answer will be ‘yes’. The payroll operator simply does not know that you require this additional information.

What if your existing provider does not have the resources or skills to deliver the additional payroll services you require?

Sometimes, however, your payroll provider may not have the resources to deliver the services you need. So, while good communication can overcome many problems, it won’t always cure everything.

Revenue’s PAYE Modernisation project has made keeping payroll accurate and up to date absolutely critical both to minimise the risk of expensive payroll errors and to avoid penalties and fines. The more employees you have, the more complex and time-consuming it becomes to operate payroll correctly.

In a growing business, it is common to reach a point where it’s no longer efficient or cost-effective to rely on a part-time payroll service provider and many businesses cannot afford to recruit, train and retain an in-house payroll team. If you find yourself in this situation, then it’s time to find a new service provider.

Questions to look at when evaluating potential payroll service providers include -

Are they properly qualified?
Do they invest in training to ensure that their payroll operators keep up to date with the latest rules and regulations?
Have they staff available to cover if the person who usually operates your payroll is on leave or absent through illness?

In previous articles, we have shared information on how to check your payroll provider’s qualification and what to consider when thinking about outsourcing payroll.

Benefits of working with an experienced payroll provider -

The advantage of working with an experienced payroll service provider like GroForth is that it minimises stress and gives you confidence that you are running your payroll correctly. Our team can often spot potential problems before they develop and will alert you so that you can investigate and resolve these issues without delay. If you would like to find out more about our services, you’ll find details on our Payroll Services webpage.

When is the right time to change your payroll provider?

I am often asked about the best time to change payroll provider. The last quarter of the year is not the ideal time as it can lead to operational complications at year-end. However, Q4 is a good time to research potential providers so that you are ready to switch early next year if necessary.

So, in summary, now is the time to review your existing payroll support, discuss any shortcomings with your current provider and check whether they can provide the additional services you require. If they are not able to meet your needs, Q4 is a good time to identify other potential payroll service providers and plan ahead so that you are ready to change to a new provider in the New Year.

For information on the payroll supports that GroForth provides, please check our Payroll Services page or contact me to discuss your specific requirements.

Get ready to file your tax return

Thu, 09 Sep 2021 14:15:38 GMT

With tax deadlines on the horizon, it’s important to check you have all the necessary documentation, says GroForth CEO Sarah Daly.

Now that we are in September, tax deadlines are approaching. Have you checked that you have all the documentation that you and your accountant will need to file your return on time?

While few things are more frustrating than chasing down errors and trying to find missing receipts, it’s important to identify and address any potential problems now as this will help you avoid Revenue fines and penalties.

So, what can you do to make life easier for yourself and your accountant when preparing to file your tax return?

Here are a few top tips to get started:

Get your records up to date. Cloud-based accounting solutions like Xero and SortMyBooks make it easy to share information with your accountant but these systems are only effective if you keep them up to date. If accurate record-keeping is something you struggle with, GroForth’s bookkeeping team can help.
Check your sales records. Is your invoicing up to date? If there is a backlog, this needs to be tackled now. Sales only benefit your business if you get paid for them.
Check your debtors. Keeping debtors under control is extremely important if you want to avoid running out of cash. Solutions like GoCardless can be a great way to deal with persistent late payers.
Run an eye over your 2020 purchases. Check that all relevant purchases are listed and correctly coded. If you are in doubt about whether something should be included, ask your bookkeeper or accountant.
Offloading difficult clients can be a great time saver. When reviewing your accounts, consider whether you have customers you need to drop — perhaps they are late payers, tyre kickers or take up too much unbillable time. Phasing these customers out could make your life easier next year and give you more time to focus on developing your business.
If you are worried about having enough cash available to pay your tax bill, consider setting up a separate bank account for Revenue bills. By putting the VAT element of the invoice paid or about 20% of the income from each invoice you raise into this account, you will have money available to pay your tax at the end of the year. If you don’t already have a separate account, setting one up might be a good idea for next year.

Finally, keep in mind that whether you are a sole trader, an entrepreneurial start-up or an SME, GroForth can help you implement reliable systems and procedures so that you always have the necessary information available for your tax return.

Check out our bookkeeping and tax services for details.

Are You Protecting Your Payroll Process?

Thu, 10 Jun 2021 14:45:47 GMT

There are practical steps employers can take to protect payroll systems and processes but if you don’t have time, outsourcing can be a good option, says GroForth’s Michelle . This article covers:

• Examples of payroll fraud

• Other payroll risks

• What you can do to protect your payroll processes

• Interaction with other systems

• Data privacy and security

• Monitoring your payroll system

These are scary times to run a business in our increasingly digital world! Media reports of cyber attacks and fraud have heightened awareness of the ongoing need to protect critical business systems like payroll.

Phishing attacks that trick individuals into disclosing log-in details on fake websites are becoming more sophisticated, ransomware is on the rise, and new vulnerabilities are being discovered in operating systems and applications all the time.

GDPR raised awareness of the business risks associated with data breaches and the associated disruption of business processes. The cost of identifying the cause of these incidents and restoring systems can be substantial, as indeed are the potential fines where personal data has been exposed.

Raising internal awareness of these risks and keeping your teams alert has never been more important. But when we think about protecting payroll, it’s important to remember that not all risks are digital. There are plenty of other ways in which payroll can be manipulated by individuals with fraudulent intentions.

Examples of payroll fraud

• Employees claiming expenses for meetings or seminars that they did not attend

• Claiming personal expenses as business expenses

• Claiming more than an item actually cost

• Inflating commission payments

• Fraudulently increasing the number of hours worked

• Manipulating salary or wage rates

• Re-routing payments to someone else’s bank account

• Adding fake employees or failing to remove leavers from the payroll

Other payroll risks

As well as the risks associated with potential fraud, business risks can be created through payroll errors such as:

• Employees being put on incorrect tax bands

• Incorrect or late payments to employees

• Payslips not issued on time (or at all)

• Workers mistakenly labelled as ‘self employed’ when they should be classed as employees

All of these can be costly if they are not spotted and corrected on time.

So, what can you do to protect your payroll process?

It is very important to ensure that your payroll administrator has the appropriate skills, qualifications and training to process your payroll correctly. You also need to make sure that your processes comply with relevant legal, tax and statutory requirements.

The IT systems you use for payroll should be kept up to date and access to systems should be limited to authorised individuals only. Regular backups should be taken and you need to be confident that you can restore from these backups if you need to.

An approval system where claims for expenses, commission payments, overtime and so on must be authorised by an approved person is a good control. Regular payroll audits are also a good idea as they can catch potential problems before they escalate.

Interaction with other systems

Your payroll system probably interacts with your finance system. Depending on your business, it’s likely that running your payroll also involves interacting with various internal departments, individuals, Revenue, and third party service providers. You need to ensure that you understand how all of the links in this chain interact with each other and ensure that the flow of data is secure. It’s a good idea to document the entire payroll process so that you can identify any potential gaps in your controls and take remedial action.

Data protection

Data management is a key area to focus on because of the high level risks involved. Processing payroll requires a lot of sensitive personal information like names, PPS numbers, salary information and bank account details. Accuracy is vital. Check that you have good controls for adding new employees to the payroll, removing leavers and dealing with promotions and transfers. Limit the information that you collect so that you only hold essential information and only retain it for the necessary amount of time.

Monitoring your payroll system

Once you have identified and implemented your payroll controls, you need to monitor them on an ongoing basis and update them when necessary.

Too complicated to think about?

Payroll can be complicated. It’s not easy to keep up to date with constantly changing employment and tax requirements. This has been a bigger challenge than ever in recent times because of the various emergency measures that the Government introduced to help businesses cope with the financial impact of Covid-19. Even before the pandemic, though, I have seen many more businesses wanting to outsource their payroll administration to a specialist payroll service provider because they find it too complicated, time-consuming and stressful to manage in-house, particularly if they have to deal with a lot of employee queries.

If you decide to outsource, the important thing to remember is that you still have obligations as an employer so you need to make sure that the service provider has the necessary skills, knowledge and team to run your payroll in a consistent, reliable, secure and compliant manner. If you need more information, please contact us and we'll be pleased to explain how the GroForth team can help you .

Common Payroll Problems and How to Avoid Them

Thu, 29 Apr 2021 15:27:53 GMT

As businesses grow, payroll tends to become more complicated. In this article, GroForth’s Geraldine describes:

Common payroll problems
The impact of payroll problems on your business
How to avoid payroll problems
What’s involved in outsourcing payroll

Today, I want to focus on a few of the most common issues that crop up explain how unless you overcome them, they can cost your business a lot in terms of both time and money.

Common payroll problems

It is extremely important to have the correct information for each of your employees every time you run your payroll. You also need to ensure that you have processes in place to alert you when changes happen such as a new employee joining, an employee leaving, changes in hours worked, pay scale changes, worker classification changes, and so on.

Payroll problems often arise due to changes happening that are not brought to the attention of the payroll administrator. Clients have also come to me for help with problems that arose because the person looking after their payroll was either inexperienced or unexpectedly absent for a period of time.

Some of these problems are more serious than others, but all need to be addressed promptly to prevent them escalating into a major issue. Examples include:

Employees on incorrect tax bands
Incorrect wage payments
Delayed payments
Unlawful deductions
Payslips not issued on time
Problems with holiday pay
Workers labelled as ‘self employed’ when they should be classed as employees

Impact on your business

For employers, one of the biggest impacts of payroll problems is that they can be very time consuming to resolve. They can also be expensive if back payments need to be made and are not in the budget.

Likewise, fines and penalties can be involved. This has really hit home since the introduction of PAYE Modernisation in 2019 because now each time that you make a payment to an employee, you have to report certain information to Revenue in a Payroll Submission Request (PSR). This tells Revenue who you are paying and contains details of each person’s gross pay, statutory deductions and pay date. The PSR information enables Revenue to identify more accurately whether the right tax is being paid. Mistakes and errors can be extremely expensive as Revenue can impose a penalty of €4,000 per offence.

Apart from the potential cost of Revenue penalties, there is also potential reputation damage to think about if a serious payroll issue occurs. This can escalate very quickly if an employee complains publicly, for example on social media, about a payroll omission or mistake.

How to avoid payroll problems

To avoid problems, it is crucial to set your payroll up correctly at the outset. This involves ensuring that you have correct information for all of your employees. Your payroll software must be compatible with Revenue systems and needs to comply with relevant Irish legislation. You will need to carry out ongoing compliance tests and implement robust processes for onboarding new employees, processing leavers, and so on.

You must also have a clear and accessible procedure to investigate complaints and resolve them promptly. Before running each payroll, you will need to obtain the necessary details of hours worked, pay due and deductions for each employee. Relevant details must be communicated to Revenue and any corrections that are needed must be made within certain allowed timeframes.

The more employees that you have, the greater the chance of error. This is one reason why many employers decide to outsource their payroll. It is simply too complicated to maintain in-house if you do not have a qualified and experienced payroll administrator on your team.

What does outsourcing payroll involve?

Outsourcing is where you hire an external service provider to carry out certain tasks for your business. While this can save you time and reassure you your payroll is being operated correctly, you need to choose your payroll service provider carefully making sure that they have the resources and skills to deliver the services you need.

Check that their software, systems and processes integrate reliably with your accounting software and with Revenue’s systems. Check also that their payroll team are properly qualified and comply with relevant tax, employment and AML requirements. This is really important as it is your reputation on the line if things go wrong.

Finally, as always, if you are having payroll problems and need assistance, please don’t hesitate to contact us . I will be happy to explain how GroForth can help your business.

Hiring a Bookkeeper? Don’t Cut Corners On Due Diligence

Thu, 25 Mar 2021 16:06:31 GMT

While you may need help with your record-keeping and accounts, before hiring a bookkeeper it’s important to check their qualifications, says GroForth’s Geraldine .

I’ve lost count of the number of times I’ve been called on to fix problems where companies ended up in hot water because their record keeping was not up to scratch.

Sometimes, it’s simply that as companies gain more customers, a backlog builds up because their bookkeeping processes were not designed to grow with the business. In other cases, the problem is that bookkeeping becomes more complex as businesses develop and can be difficult to manage in-house if there isn’t a qualified bookkeeper on the team.

Typically, owners contact me when they realise that they are running into cashflow problems due to invoices not going out on time or payments being delayed. When problems like this arise, there are two ways to resolve them — either hire a bookkeeper or outsource the bookkeeping to a specialist provider like GroForth.

While there are pros and cons to each of these options, generally for small businesses it makes sense to outsource. A key advantage of outsourcing is that you don’t have to provide salaries and training for an in-house team. There are capital expenditure savings too as you don’t have to purchase technology and office equipment.

Questions to ask when hiring a bookkeeper

Regardless of whether you decide to hire a bookkeeper or outsource, it is important to conduct due diligence so that you can have confidence that the bookkeeping is reliable and accurate and that risks are properly identified and managed. This is critical because of the way that bookkeeping records intersect with tax and regulatory compliance requirements.

Set out below are a few key questions to ask when hiring a bookkeeper:

• Should I hire a bookkeeper or an accountant? This is the first question to ask as many business owners are confused about the difference between the two roles. A bookkeeper helps you organise and maintain records of your business transactions whereas an accountant prepares your annual financial statements, provides business and tax advice and helps ensure that you comply with relevant legal and regulatory requirements. So the bookkeeper is essentially an administrative role whereas the role of the accountant is more strategic and advisory. Often, accountants will recommend that you use a bookkeeper to help keep your records up to date and accurate.

• What does a bookkeeper do? Typical duties include processing accounts payable and accounts receivable, checking calculations and balance sheet entries, tracking down and resolving errors, posting journal entries, tracking fixed assets, issuing RCT reminders, preparing trial balances, and generating management reports. Bookkeepers also help resolve queries from internal departments, suppliers and customers.

• What qualifications does the bookkeeper hold? When hiring a bookkeeper, it is important to verify that they have appropriate qualifications and training. Look for evidence of qualifications and membership of recognised professional organisations.

• How do they keep up to date? While you are responsible for ensuring that your organisation complies with all applicable legal and regulatory requirements, it is important that your bookkeeper keeps up to date and is conscientious about alerting you to potential problems. In the hiring process, ask for some examples of situations where they have successfully identified problems and recommended corrective actions.

• What accounting systems are they familiar with? Most companies today use accounting software or cloud based accounting solutions. When hiring a bookkeeper, it is a good idea to check if they are familiar with the system that you use. If they have not used your system before, you will need to provide training. A point worth keeping in mind here is that the more qualified the bookkeeper is, the better equipped they will be to take full advantage of the functionality of your accounting system.

• Do they have experience working with companies in my sector? Depending on the industry, there can be different ways of dealing with certain bookkeeping tasks. For this reason, a good question when hiring, is to ask whether the bookkeeper has experience of working with other companies in your sector.

• What data privacy and security measures are in place? This is an important question if you are outsourcing your bookkeeping and especially if the arrangement you are considering will involve transferring data out of Ireland. Remember that security breaches could reflect badly on your business.

• What backup procedures are in place to protect my data? As with the previous question, it is important to check this if you are outsourcing your bookkeeping.

• What are the terms of engagement? If you are hiring a bookkeeper for your in-house team, it is important to draw up their contract of employment correctly so that it reflects their terms and conditions as well as the duties that they will be required to carry out. Equally, when outsourcing, you will need to agree terms of engagement with your service provider. The service provider should provide you with an engagement letter.

• Do they have professional indemnity insurance? This is an important protection when outsourcing your bookkeeping.

Importance of reliable bookkeeping records

Good decision making is the foundation of successful businesses and access to reliable information is the basis of all good decisions. This is why it is so important to hire the right bookkeeper, ensure that they are properly qualified and that they have the necessary skills to record your business transactions accurately and on time.

If you need support, GroForth’s bookkeeping team can provide assistance. Likewise, if you need help to analyse or interpret financial information or want someone to do this for you, GroForth can extract meaningful management reports from your business data. These reports help you plan more effectively. For more information and/or to discuss your specific bookkeeping needs, please contact us for details.

What's the Story on Cashflow?

Wed, 10 Feb 2021 16:20:42 GMT

Business owners are sometimes confused about the difference between profit and cashflow. In this article, GroForth’s Geraldine explains:

• What is cashflow?

• Is cashflow the same as liquidity?

• How is cashflow different from profit?

• What are the different types of cashflow?

• What is positive cashflow?

• What is cashflow quality?

• What does cashflow measure?

• What do cashflow and liquidity tell investors?

• What is the difference between a cashflow statement and a cashflow forecast?

• Why is cashflow management important?

• How you can improve cashflow

• Who controls cashflow?

Managing cashflow correctly is one of the best ways to improve your business performance. This is because when cashflow is positive, you have money available to pay your bills and keep your business running smoothly. Positive cashflow also puts you in a strong position when it comes to financing future development and growth.

On the other hand, when cashflow is weak, it can be difficult to pay staff and bills on time. Running low on cash can be a warning sign that your business is in trouble.

So, because cashflow is such a good indicator of the financial health of a business, it’s an area that accountants often focus on. Yet, in my experience, many business owners don’t fully understand cashflow and are sometimes confused about the difference between cashflow and profit. So, set out below are answers to 12 frequently asked cashflow questions.

1. What is cashflow?

Cashflow refers to the money that flows in and out of your business through normal day-to-day activity. On your cashflow statement, the money that comes in (eg payments from customers) is shown as a positive number, while the money that goes out (eg payments for utilities and services) is shown as a negative.

2. Is cashflow the same as liquidity?

Liquid assets are assets that can be easily converted to cash like the money you have in your safe, cash in your bank accounts and money owed by customers that you know you can collect quickly. Cashflow can be used to measure liquidity.

3. How is cashflow different from profit?

Profit focuses on when income earned (eg when a sale is made) but cashflow focuses on when payment is received. You might invoice a customer in March but the customer does not pay until April so there is gap between when the income is earned and the payment received. Also, unlike profit, cashflow includes the money that flows out of your business (eg expenses such as the cost of sales, capital expenditure, depreciation, interest and dividends) so it is sometimes regarded as a better indicator of your company’s health because it gives a fuller picture of your business.

4. What are the different types of cashflow?

There are three types of cashflow:

⁃ Operating eg sales

⁃ Investing eg dividends and interest

⁃ Financing eg loans

5. What is positive cashflow?

Positive cashflow is when you have more money coming in than going out. It means that you have sufficient cash available to pay your staff and bills on time and that you can readily finance the purchase of essential equipment. It also means that you are in a good position if you need to raise finance to expand and/or develop your business.

6. What is cashflow quality?

Cashflow quality takes into account both the factors that impact your current orders and market and customer trends that may impact your future orders. For example, if your current orders depend on a one-off large order that is unlikely to be repeated or if the value of the order does not cover the cost of servicing it, this would be ‘low quality’ whereas a reliable stream of cost-effective future orders would be high quality.

7. What does cashflow measure?

Cashflow measures how quickly assets can be converted to cash without affecting their price.

8. What do cashflow and liquidity tell investors?

Cashflow and liquidity indicate how quickly a company can meet its financial obligations.

9. What is the difference between a cashflow statement and a cashflow forecast?

A cashflow statement shows historic cashflow information. A cashflow forecast predicts future cashflow.

10. Why is cashflow management important?

Cashflow management monitors the financial health of your business and shows how much cash you need on a day-to-day basis. It can be used to work out how to reduce cash outflows as well as to ensure you can access finance for ongoing business development.

11. How can I improve cashflow?

An effective way to improve cashflow is to speed up cash inflows and slow down outflows. Here are some ways that you can do this:

⁃ Invoice promptly

⁃ Make it easy for your customers to pay

⁃ Credit check new customers

⁃ Chase money that you are owed

⁃ Don’t hold too much stock

12. Who controls cashflow?

Technology, particularly cloud accounting, make it easier than ever to keep on top of your company’s cashflow management but financial skills are also crucial. Key players on your cashflow management team should include the people responsible for your accounts payable and accounts receivable functions. Usually, this will be either an in-house Finance department or an outsourced finance service provider like GroForth.

Cash, as they say, is king. If you have questions about cashflow or would like advice on how to improve your cashflow management, GroForth can help. Contact our cashflow management team for details.

How do you price your time?

Thu, 21 Jan 2021 15:16:52 GMT

Quantifying the time involved in the tasks you complete for your clients is the key to pricing your services correctly, says Sarah Daly.

When is the last time that you reflected on how you price your time? In my experience, most self-employed business owners are so busy they don’t have a lot of time for reflection. Yet if you haven’t worked out where you and your team spend most of your time every day, you can’t be sure that you are pricing your work correctly.

What to take into account when putting a price on your time

Basically, there are three key elements to look at when putting a price on your work. These are:

labour costs,
overheads, and
the profit that you want to make.

It is really important to break down the tasks that go into each job that you complete for your clients, particularly if you have employees working on multiple projects. It’s only when you understand the costs associated with individual tasks that you can work out what to charge for them.

Fixed price vs hourly rate

When setting the rate for a job, there are two main approaches to pricing. You can either charge a fixed price or an hourly rate. There are pros and cons to each of these approaches.

Fixed price

When you set a fixed price, a key advantage is that your earnings won’t be affected if a job doesn’t take as long as you expected. However, more often than not, jobs run over time— usually because the scope of the work involved increases. This scope creep can become a real problem unless you have a system in place to bill for the additional work involved. So, when setting a fixed price for a client, it’s important to specify how additional work and/or expenses will be charged for.

Hourly rate

A simple way to calculate your hourly rate is to add up your labour costs, overheads and profit margin and divide this by the number of hours you intend to work per week or per month. Remember, if you are self employed that you don’t get paid for annual leave or sick leave so provision for this needs to be built into your pricing. An advantage of charging an hourly rate is that it avoids losing out if there is ‘scope creep. While the administrative burden of keeping track of your hours can be a disadvantage, there are tools that can help with this task.

Putting a price on interruptions

We all get distracted by things like email, employees popping in for that ‘quick word’ and all the multitude of crises that take up our time every day. Knowing your hourly rate will help you work out how much interruptions cost you. Previously on this blog, I’ve mentioned how the MyHours time tracking solution really changed how I manage my working time, helping me to identify my most valuable work and eliminate time-wasting activities.

Knowing what you are worth

Of course it’s not just a question of understanding the time that goes into the various tasks that you complete for your clients, it’s also important to be confident about what the services that you provide are worth. While it can be useful to know what your competitors charge as this can help you to benchmark your services, you always need to take into account the costs and value of your specific service offering. If you think about what you pay your window cleaner or plumber, this will often provide an interesting comparison for your own hourly charge!

Getting paid

As well as putting the right price on your time and services, you also need to put a proper billing system in place to ensure that you get paid on time. Online systems like Xero and SortmyBooks make this relatively easy but whatever system you use, remember that timeliness, consistency and accuracy are important.

If you need more information on how to price your time and/or services, or require assistance with your billing or bookkeeping, please do get in touch. Our team will be pleased to hear from you.

2021 Forecasts - How to get the most from your cloud accounting

Wed, 02 Dec 2020 14:11:46 GMT

As businesses and their accountants prepare 2021 forecasts in the coming weeks, accurate management accounts for the last 12 months will be vital, says Sarah Daly.

With the end of the year just weeks away, many of us are preparing and/or updating our 2021 budgets and forecasts. The trading environment has been very difficult for many businesses this year and will make forecasting more difficult than usual. Reliable management information will be vital but businesses will also need to take account of external factors that could affect their profitability in 2021.

What is the difference between financial accounts and management accounts?

The main difference between financial accounting and management accounting is that financial accounting mostly focuses on the information that is needed for your end-of-year financial statements so it is primarily interested in historic information whereas management accounting is forward-looking and is used for business forecasting, cashflow projections and business planning.

How do I create management accounts?

If you use a cloud-based accounting system, it is usually fairly easy to set up management reports to help prepare your budgets and forecasts. The trick is knowing which indicators matter most and understanding how to use them. If you are unsure how to do this, or if you need help to interpret the information and incorporate it into your planning, check out GroForth’s management accounting services.

What if I don’t use a cloud accounting system?

There can be several reasons why you might not use cloud accounting. It could be that your business is at a very early stage and the volume of transactions is low or it could be that you have an established business which has relied on a manual system for many years and is reluctant to change. However, for most business, cloud accounting makes sense because it saves time and is cost-effective.

While I understand that cloud accounting is not for everyone, over the years GroForth has helped many small businesses automate their processes to enhance their decision-making and improve profitability. Every business is different so you need to weigh the pros and cons. If you are interested in finding out more, check out our article on the advantages and disadvantages of cloud accounting.

What kinds of management information should I review?

When generating management reports from your cloud accounting system, one of the first areas to look at is your costs. Check what you spent on things like utilities, rent, rates, and insurance over the last 12 months so that you can budget for these in 2021. Forecasting these costs is usually fairly straightforward however, if you have not done so recently, it is worth considering whether you could obtain better value by switching provider.

For many businesses, salaries will be the biggest cost. While reviewing your spend on salaries last year will provide useful information, it may be difficult to forecast the next 12 months using historical data alone, particularly if you had to let staff go due to the pandemic restrictions. What trends are impacting salaries in your sector? What help is available from Government? Will you need to take on additional staff in the coming months? These are questions to consider. External data sources and/or benchmarking against other businesses in your sector can help to improve your forecasts in this area.

When it comes to income and expenditure, reviewing the data your accounting system provides for the last couple of months will help you work out the impact that the pandemic is having on your business. In sales, for example, your accounting system should enable you to analyse your customer types and profitability which will help you plan where to increase or decrease your focus in 2021. It’s important to analyse this information carefully so that you can learn lessons from it and integrate it into your 2021 budgets and forecasts.

Effective financial controls

When reviewing your budgets and forecasts, take time to check that you have effective financial controls in place so that you can be confident that you are accurately recording your business income and expenditure. If this information is not up to date, you could miss out on opportunities to improve profitability or, worse still, you could fail to spot emerging problems like delayed payments which could signal that a customer is in trouble. Previously on this website, we shared tips on how to set financial controls. If you need help, contact our management accounting team.

What if I can’t afford to pay for help?

The Government provides a wide range of supports for businesses and self employed individuals impacted by the pandemic. These include a COVID-19 Business Financial Planning Grant, worth up to €5,000, which is designed to help companies to develop a robust financial plan. The grant is for Enterprise Ireland clients and those manufacturing or internationally traded services companies that employ 10 or more full time employees.

Information on these supports is available on the Department of Enterprise, Trade & Employment website.

Benefit-in-Kind Exemptions – Office and Computer Equipment

Fri, 27 Nov 2020 14:06:46 GMT

With more people working from home, it is important that employers understand the tax implications of providing office and computer equipment for their employees, says Nikki Johns.

Even before the Covid-19 pandemic struck, a shift towards remote working has been underway in recent years. Many employees now work from home on a part- or full-time basis, and employers often provide equipment to facilitate this work.

Usually, Revenue considers the provision of any non-cash benefit to be a Benefit-in-Kind (BIK) and subject to tax through the payroll system. However, the provision of certain necessary equipment for an employee working from home (such as computers, printers, scanners, telephones and office furniture) is exempt from BIK provided that any private use of this equipment by the employee is minimal.

Phone bills

If an employer pays an employee’s private home or mobile phone bill, usually 50% of the bill value will be liable for BIK tax unless the employee can prove that less than 50% of their phone use was private.

Heating and electricity

An employer can pay an employee a tax-free allowance of €3.20 per working day to cover expenses such as heating and electricity.

Covid-19

At the time of writing, Revenue have introduced several alterations to the application of BIK in response to the Covid-19 pandemic. You can read more about this in our blog on Benefits-in-Kind and Covid-19: What You Need to Know.

Help!

Our payroll team can calculate Benefit-in-Kind and/or operate your payroll on your behalf so if you need assistance with these time-consuming tasks why not check out our payroll services page or contact our CEO Sarah Daly to find out more about our services and how we can help you.

Benefit-in-Kind on Free or Subsidised Accommodation - A guide for employers

Tue, 17 Nov 2020 13:47:19 GMT

Employers who provide their employees with free or subsidised accommodation need to be aware of the Benefit-in-Kind implications, explains Nikki Johns.

If you provide free or subsidised accommodation for your employees, this is classified as a Benefit-in-Kind which means that your employees must pay PAYE, USC, and PRSI on the value of the benefit while you must include the value of the benefit in your payroll submissions to Revenue.

How to calculate Benefit-in-Kind on free or subsidised accommodation

The first step to calculating the Benefit-in-Kind value of the accommodation that you provide for your employees is to assess the annual market value of the rent (ie the rent a landlord would charge an unconnected tenant). You must keep evidence to show that the market value you apply is reasonable (e.g. a statement from an estate agent). The annual market value of the rent must be reviewed annually.

You then add on any related expenses that you are paying for your employees (such as light and heat). If the property is furnished, this must also be included. The value of furniture is calculated as 5% of its value when it was first provided as a benefit to an employee.

Accommodation that is exempt from BIK

Where an employee is required to live in on a business premises, such as care staff in residential homes or onsite caretakers, this accommodation is exempt from BIK.

Covid-19

Due to the Covid-19 pandemic, special rules are in place for situations where accommodation is provided due to health and safety concerns or self-isolation requirements. Information on how to deal with this, along with an overview of other changes relating to Covid-19 is available on the Revenue website.

Help!

Keeping up with the rapid pace of change this year has been difficult for many payroll operators.

If you need help to understand recent changes, or would like our team to calculate Benefit-in-Kind and/or operate your payroll on your behalf, why not check out our payroll services page or contact our CEO Sarah Daly to find out more about how we can help you.

Benefit-in-Kind on Medical Insurance Premiums

Wed, 04 Nov 2020 13:41:25 GMT

If you are paying medical insurance premiums on behalf of your employees, it is important to be aware of the Benefit-in-Kind implications, explains Nikki Johns

When an employer pays a medical insurance premium on behalf of an employee, this is treated as a taxable Benefit-in-Kind (BIK) which means that the employee must pay PAYE, PRSI, and USC on the gross value of the premium. These taxes are deducted through payroll.

From the employer’s perspective, the operation of BIK on medical insurance premiums is complicated by Medical Insurance Relief being applied at source by the insurer.

Briefly, the procedure is:

The insurer reduces the gross premium by applying the medical insurance tax relief
You, the employer, pay the reduced premium to the insurer
The gross premium must be added as notional pay to your employee’s payroll for deduction
of PAYE, PRSI, and USC
Your employee must claim the medical insurance tax relief directly using the Revenue MyAccount facility
You, the employer, must return to Revenue the value of the Medical Insurance Relief

The following example is provided on the Revenue website:

Benefit-In-Kind Motor Dealership Example
Covid-19

At the time of writing, due to the Covid-19 Pandemic, refunds are being issued by medical insurance providers. For information on how to deal with this, as well as an overview of other changes relating to Covid-19 is available is on the Revenue website.

Help!

We understand that operating payroll and dealing with the various changes that have taken place this year in response to the Covid-19 pandemic is proving difficult for some employers. If you need assistance, our team would be pleased to help.

You can find information about the supports we offer on our payroll services page or contact our CEO Sarah Daly for further details.

Working from home? Check out GroForth’s top tech tips for business owners

Wed, 28 Oct 2020 13:35:24 GMT

As an early adopter of new technologies, GroForth’s Sarah Daly has some practical tech tips for business owners working from home.

Restrictions to curb the spread of Covid-19 has forced many people to work from home this year — a trend that is likely to continue, at least for some people, when the pandemic is over.

In his Budget speech on 13 October 2020, Minister for Finance Paschal Donohoe highlighted the shift that is taking place and said that an Inter-Departmental Group has been set up to develop a strategy for remote working and remote service delivery. It will be interesting to see what emerges from this Group’s work in the coming months. Certainly there is potential to enhance work/life balance while enhancing productivity, if my personal experience is anything to go by.

At GroForth, technology has always been the foundation of our bookkeeping and payroll services so it was no surprise to me that businesses who embraced technologies like cloud-based accounting or video conferencing apps this year experienced real benefits in terms of efficiency. However, there is a difference between working from home on an occasional basis and being based at home full time. So, with the Covid-19 pandemic likely to be with us well into 2021, now is the time to ensure that your home tech set-up is as reliable as possible. Set out below are a few tips based on my personal experience of working from home.

6 practical tech tips for working from home

While creating a dedicated, comfortable and quiet workspace is the ideal if you can manage it, this isn’t always practical in a small home. If you have to work in a shared space such as at your kitchen table, headphones are a great way to block out background noise.
Use a storage box to pack away your laptop, documents, chargers and cables at the end of each day. DIY and home stores have a great selection of boxes to choose from.
Listening to the radio the other day, I was impressed when the presenter of the show who was working from home said he had switched to a backup battery as the power had just gone down in his area. I like to keep my laptop and phone fully charged throughout the day so that I can continue working if there is an outage. Bear in mind that cables can get damaged so it’s a good idea to have spares.
Good wifi and broadband speed are really important when working from home. If your wifi coverage is weak, a wifi range extender will boost the signal. If you share your broadband connection with other family members who are also working or studying at home, you may need to consider upgrading your broadband, particularly if other people in your home are also using video conferencing or streaming services. It is also a good idea to know where you can connect to public wifi in an emergency — eg at a local cafe or library — but remember that there are Internet security considerations to take into account when using these services. If you are in any doubt about how to use them securely, seek advice.
Staying with security, keep in mind that working from home can increase the risk of falling victim to cybercrime so it is important to ensure that your devices and network are secure. Password-protect your screens and set up a screensaver to come on automatically when you are way from your laptop. Other practical steps you can take to protect yourself include using strong passwords and two-factor authentication. Remember to watch out for dangers like dodgy emails and attachments, phishing, invoice redirection scams, fraudulent phone calls or text messages, etc. If you have not already done so, check out the Working From Home Security Advice published by the National Cyber Security Centre earlier this year.
Most of us are now use applications like Zoom, Skype, FaceTime and WhatsApp for video calls and virtual meetings. It’s a good idea to think about your appearance on these calls. What you wear and where you place your laptop or webcam can make a difference when it comes to looking professional on screen. Try experimenting with lighting as this can also be important and pay attention to what people on the call will be able to see in your background. Remember that some applications allow you to create a custom background so your colleagues, clients and customers don’t need to see into your home if you would rather that they didn’t.

Tax considerations when providing equipment for employees working from home

If you are an employer, there are some tax considerations to take into account when providing equipment for employees who are working from home. You are allowed to provide certain types of equipment tax-free provided that your employee’s private use of the equipment is minimal. If you pay your employee’s private home or mobile phone bill, usually 50% of the bill is taxed as a Benefit-in-Kind unless your employee can show that less than 50% of their phone use was private. For more information on these tax considerations, see ”What is Benefit-in-Kind? A guide for employers” by my colleague Nikki Johns.

Getting the most out of working from home

Elsewhere on this blog we discussed how to use your time wisely if your normal routines are disrupted due to the pandemic. We highlighted how focusing on certain financial themes can enhance your business’s ability to recover. We have also blogged about how working from home can improve productivity. However, notwithstanding the many benefits of working from home, there is no getting away from the fact that new working practices coming at a time when businesses are coping with a pandemic and preparing for Brexit means that many owners and managers are under intense pressure at present.

At GroForth, we are experiencing increased demand for our bookkeeping and payroll services with clients valuing the additional capacity and peace of mind that outsourcing these functions can deliver.

If you are interested in finding out more about our services, please contact me for details.

Want to spend less time on your bookkeeping or payroll?

Thu, 15 Oct 2020 10:18:25 GMT

As you assess the implications of the recently announced Budget while coping with Covid-19 restrictions, preparing for Brexit and managing day-to day tasks, time constraints are more than likely an added burden. Outsourcing tasks like payroll and bookkeeping can be an effective way to streamline processes and free up time, says Sarah Daly.

What a year 2020 turned out to be. As we move into the final quarter, most of the accountants and business owners that I work with simply don’t have enough hours in the day to keep on top of constantly growing ’to-do’ lists.

Admittedly, the last quarter is always a busy time of year, but 2020’s changed working practices, pressures on cashflow, constant stream of new Government announcements and the forthcoming end of the Brexit transition period are creating a perfect storm.

Given the complexity of these challenges, it’s easy to understand why so many businesses and their accountants are struggling to keep on top of things at present. Indeed, research commissioned by GroForth a few months ago found that time constraints were the top concern of accountants, closely followed by difficulties finding and retaining good staff.

Support for you

The time pressures that our clients are facing has led to increased demand for GroForth services this year. By looking after bookkeeping and payroll — two of the most tedious and time-consuming tasks for many businesses — we are able to give our clients more capacity to focus on other areas of their business. Clients tell us that the assistance we provide is a game changer because of the way that it streamlines their processes cutting out duplication, improving accuracy and giving them peace of mind. Our clients, who are mostly Irish businesses, like the fact GroForth is based in Dublin and that our local team is up to speed and understands Irish rules and regulations.

8 practical examples of tasks that can be outsourced

New clients often ask me for examples of the types of task that GroForth can take over for them. Often, we provide customised services depending on individual business requirements but commonly included tasks are things like:

Cross checking balance sheet entries against the supporting documentation (e.g. bank statements)
Tracking down and resolving errors,
Checking that profit and loss accounts are correctly calculated,
Ensuring fixed assets are correctly recorded,
Bank reconciliations including processing payments and ensuring that cash allocations are deposited in bank accounts
Payroll administration and support,
Issuing RCT reminders,
Generating management reports.

While many of these tasks are year-round activities, Q4 is always busier for businesses and their accountants due to year-end deadlines. In fact, that’s the main reason why our accounting firm clients use GroForth’s back office support for accounting firms. It also helps that our team use all the common accounting software packages like Xeroand SortmyBooks so we are able to integrate seamlessly with the systems that businesses and accountants are using.

Cashflow management

GroForth also provides cash management services for some of our clients. Given the pressures on cashflow that many businesses are experiencing at the moment, it is important to have strong financial controls in place as this helps businesses control their income and expenditure and avoid running out of cash.

Planning for 2021

As in any other year, Q4 is when businesses review their plans for the coming year and assess how any changes or new measures announced in the Budget will affect them. Meanwhile, day-to-day tasks continue and filing deadlines must be met. It’s likely that planning will take more time than usual as the Covid-19 pandemic and Brexit preparations, mean that templates used in previous years are unlikely to be sufficient.

When reviewing your plans, it is worth considering whether outsourcing your payroll and bookkeeping could be a cost-effective move. Payroll has been particularly challenging for many businesses this year because of the impact of the various Government supports introduced to support jobs and help individuals cope with loss of income during the pandemic. With all the indicators suggesting the pandemic will still be with us in 2021, the implications for payroll will need to be carefully considered when planning for the year ahead. Outsourcing payroll can be a good way to free up time so that you can concentrate on the other challenges facing your business.

Finally, cash, of course, is king and making sure that you don’t run out of cash will be more important than ever in the coming months. The key to successfully managing business finances is making sure that you have access to accurate information at all times. This means that transactions must be recorded accurately and on time — a challenge in itself when so many administrative staff are working from home at present. If you need support, GroForth’s bookkeeping team can provide assistance. Likewise, if you need help to analyse or interpret financial information or want someone to do this for you, GroForth can extract meaningful management reports from your business data. These reports can help you plan more effectively for the year ahead. If these services are of interest, please contact us for further details.

Should You Hire An Accountant, Bookkeeper or Both?

Tue, 22 Sep 2020 15:06:56 GMT

A good way to understand the difference between bookkeeping and accounting is to look at the tasks performed by each role, says GroForth’s Geraldine . This article covers:

• What bookkeeping records do you need to keep?

• Do you need a bookkeeper if you are using accounting software?

• What is the difference between bookkeeping and accounting?

• Why accountants like their clients to have a bookkeeper

Many business owners find administrative tasks boring. Spending hours poring over bank reconciliations can be tedious and it is all too easy to overlook filing an invoice or checking a statement when you have a million other demands on your time. Yet neglecting simple tasks like these can end up costing a lot of time and money come year-end.

Not only that, it also makes extra work for your accountant and, left unresolved, could cause problems with Revenue down the line.

“Yes,” I hear you say, “But there are only so many hours in the day and I have more urgent tasks on my to-do list. I hardly ever have time to catch up on my paperwork.”

This is a common problem and one that tends to get bigger when businesses begin to grow. That said, today’s cloud accounting solutions make keeping your business records up to date a lot easier than it used to be!

Still, though, lack of time is one of the main reasons why business owners recruit a bookkeeper or turn to an outsourced bookkeeping service provider like GroForth for help.

What kinds of bookkeeping records do I need and why do I need them?

The first reason that you need accurate, up to date bookkeeping records is so that you can keep your tax, accounting and compliance records in order. Examples of the types of records you need to maintain for this include:

• Sales figures

• Invoices

• Purchase receipts

• Bank Statements

• Loan Statements

• Credit card statements

• Hire Purchase or Finance Lease agreements

• Insurance

• Correspondence relating to your tax affairs such as your communications to/from Revenue

But good bookkeeping isn’t just about keeping you on the right side of the tax authorities and law, it’s also about helping you run your business more efficiently. A properly set up system will highlight opportunities to improve your profits and help to keep your business strong.

Do I need a bookkeeper if I am using accounting software?

Many businesses today use cloud accounting solutions like Xero, Big Red Book, and SortmyBooks to improve efficiency. These solutions give you 24/7 access to data about your business and make it easy to spot opportunities to increase sales or cut costs.

They also enable you to share information with your accountant who will use it when helping you decide on the best strategies for your business. However, the quality of your information on the cloud platform depends on how reliable your user input is. If you are too busy to keep your data up to date, you won’t be able to get reliable outputs from the system.

What is the difference between bookkeeping and accounting?

When your business reaches a point where you know you need help to keep your books up to date, you may be unsure about whether to hire a bookkeeper or an accountant or both. This is a question I am often asked by new clients.

A good way to understand the difference between bookkeeping and accounting is to look at the tasks performed by each role.

Your bookkeeper helps you organise and maintain records of your business transactions. Bookkeepers can also train you on how to implement good business processes and explain how to use accounting software correctly. Often, they will send out invoices on your behalf and ensure that your bills are paid on time. When your year-end comes around, your bookkeeper will make sure that your accountant has all the necessary information to prepare your annual financial statements. Some bookkeepers, like GroForth, provide a fully outsourced finance function for business clients along with payroll support services. This releases you from administration so that you can concentrate on other aspects of your business.

Your accountant prepares your annual financial statements and provides advice on matters such as your business structure, growth and contingency plans. Your accountant also provides tax advice and helps ensure that you meet your compliance obligations.

So, in simple terms, your accountant focuses on the ‘big picture’ whereas your bookkeeper focuses on the detail of your transactions.

Why accountants like their clients to have a bookkeeper

Locating missing documentation and reconciling errors in business records are two of the biggest headaches for accountants and their clients when year-end approaches. I support a lot of accounting firms and business owners and I have seen whole days lost tracking down a missing purchase receipt or searching for an explanation when there is a discrepancy between business income and bank records.

Often, if a business doesn’t have an in-house bookkeeper or if they need to improve their financial controls, their accountant will suggest outsourcing their bookkeeping to a specialist service provider like GroForth. This gives both the business and the accountant peace of mind that records will be properly maintained so that the information that is needed for decision making and financial statements will be accurate.

If you are at a point where you need help with your bookkeeping, GroForth would love to help you. Contact me for more information about the bookkeeping services my business provides for businesses like yours.

eWorking Relief

Thu, 10 Sep 2020 13:17:12 GMT

Are you or your employees working from home during the Covid-19 pandemic? Here’s what you need to know to pay or claim tax-free expenses.

Revenue provides for certain tax-free expenses to be paid to employees who qualify as eWorkers. An eWorker is an employee who works from home either on a full-time or part-time basis. Employees who bring work home outside of normal working hours do not qualify as eWorkers.

An employer may make a payment of €3.20 per workday to an eWorker without deducting PAYE, PRSI, or USC taxes. This payment is to cover basic expenses, such as heating and electricity costs. If you wish to repay your employee for costs higher than €3.20 per day, taxes must be deducted.

If you do not pay the eWorking allowance to your employees, they may make a claim for tax relief at the end of the year. They will then receive a tax refund based on the number of days they worked from home and the cost of their expenses. They can make this claim through Revenue’s myAccount service.

An employer may also provide equipment such as a computer, printer, scanner, software, telephone, internet, or office furniture for business use. This is not a Benefit-in-Kind, provided that private use by the employee is minimal.

Further information from Revenue can be found here: https://www.revenue.ie/en/jobs-and-pensions/eworking/index.aspx

Should I run my own payroll or outsource it to a specialist?

Mon, 07 Sep 2020 15:47:34 GMT

Managing payroll can be a stressful and time consuming task at the best of times so it is not surprising that many businesses are asking the question; "Should I outsource payroll", says Sarah Daly.

Following the introduction of PAYE Modernisation last year, payroll administrators could be forgiven if they were hoping for an easier time in 2020. However, the outbreak of the Covid-19 pandemic dashed those hopes in March. Disrupted working patterns and the impact on payroll of reduced hours, temporary layoffs, and the various Government supports introduced to help businesses and individuals through the current difficulties have created a multitude of new challenges for payroll teams.

While supports like the Temporary Wage Subsidy Scheme and the recently announced Employment Wage Support Subsidy provide welcome assistance for eligible businesses and individuals, processing these payments is creating additional work for payroll administrators.

Here at GroForth, our team is working hard to keep our payroll clients up to speed with the latest developments through our regular client communications and via the FAQs section of our Payroll Services Page.

New to payroll?

If you are a first-time employer, getting to grips with your payroll obligations can be daunting. It’s not just a matter of calculating weekly wages or monthly pay checks, there are also tax and employment law requirements to comply with. It is important that you set up and operate your payroll correctly from the outset so it is a good idea to seek advice from an experienced payroll service provider.

Ways to run payroll

The three main ways to run payroll are manually, using payroll software, or outsourcing your payroll to a specialist service provider. Here is a brief description of the pros and cons of each of these options:

Manually: This can look attractive as it means you don’t incur the cost of paying a payroll service provider. However, operating payroll manually can be risky as it is error prone especially if you are not experienced in payroll. Also, payroll legislation can be complicated and it is not easy for any one individual to keep up to date tax and employment law changes that can affect employee pay and deductions.

Payroll software: Depending on your business structure and how many employees you have, payroll software can be cost-effective. There are various cloud-based solutions available — e.g. Thesaurus, BrightPay and Sage Payroll to name just a few. It is important to choose the right solution, checking carefully that it integrates with your accounting software and is compatible will Revenue’s systems. You also need to understand how to operate the software correctly. Training is usually required especially if you do not have previous payroll knowledge and experience.

Outsourced payroll: This is where you use a specialist like GroForth to manage your payroll on your behalf. While outsourcing can save you time and is often more cost effective than trying to manage payroll in-house, you need to choose your payroll service provider carefully making sure that they have the resources and skills to deliver the services you need. Similar to choosing payroll software, don’t forget to check that the service provider’s systems and processes integrate reliably with your accounting software and Revenue’s systems.

Payroll and Revenue

Each time that you make a payment to an employee, you have to report certain information to Revenue. This includes the payment amount, payment date and the Income Tax, Universal Social Charge and Local Property Tax deducted. For an overview of these requirements, see the Revenue website.

Should I outsource payroll?

Keeping up to date with the various legislation and tax changes that impact payroll can be stressful and time consuming. Often, the changes require certain knowledge before you can fully understand them and they can be complicated to implement, particularly if you have employees working non-standard hours or with different pay, benefits and conditions. Because of this, businesses often find it is easier to outsource payroll. It can also save time and be more cost-effective than hiring a payroll specialist and investing in training to keep their skills up to date. However, before you outsource your payroll, it is vital to check that the provider you choose has the necessary skills and knowledge to comply with tax and employment law requirements. You also need to check that they are set up to provide an efficient service and confidential service so that your employees will be paid correctly, securely and on time.

It’s important to be aware that, as an employer, you are responsible for ensuring that your payroll system complies with tax law regardless of whether you are using payroll software to manage your payroll yourself or relying on your accountant, a payroll service provider or another agency to manage your payroll for you.

What payroll services should I look for from an outsourced payroll service provider?

Provided you keep your payroll service provider informed of relevant changes such as salary changes and details of new or departing employees, they should be able to:

Provide a confidential, secure service

Use industry-standard, compliant payroll software

Calculate employee payments including overtime, holiday pay, sick pay

Generate employee payslips

Process PRSI, USC and tax deductions

Process pension payments, health insurance, trade union membership subscriptions and other relevant deductions

Report payroll information to Revenue including details of new employees and employees leaving your service

Track annual leave

Generate payroll reports

Calculate employee share payments

Calculate Benefit in Kind (BIK) on non-salary benefits

Provide payroll support and training where required

GroForth provides all of this, and more, for our payroll clients. For more information about our services along with some frequently asked payroll questions, please see our payroll services page or contact me here and I will be happy to answer any questions you may have.

EMPLOYERS - PAYROLL ISSUES TO WATCH OUT FOR IN 2025

Wed, 12 Aug 2020 11:16:57 GMT

2025 Revenue Payroll Notifications

Remember that you cannot use 2024 Revenue Payroll Notifications for 2025. RPNs for 2025 are available from Revenue. It is important not to file a payroll submission with a 2025 pay date until the 2025 RPN is available.

National Minimum Wage

The national minimum wage will increase by €0.80 per hour to €13.50 per hour from 1 January 2025.

Payroll taxes

Changes announced in the Budget that will affect payroll in 2025 include a €2,000 increase in tax bands and modest increases in personal tax credits. For details of these and other relevant changes see our Budget 2025 article.

USC

The 4% rate of USC will be reduced to 3%. The entry point contribution rates will increase by €1,622, in line with the increase to the national minimum wage, so it will apply to income between €27,382 and €70,044.

Enhanced reporting requirements

Enhanced reporting requirements, which came into effect on 1 January 2024, is still in place for 2025. This will affect you if you provide certain reportable benefits to your employees or directors. Reportable benefits include the remote working daily allowance, travel and subsistence expenses and benefits such as Christmas vouchers which avail of the small benefit exemption. From 1 January 2025, there will be an increase in the maximum exemption, from €1,000 to €1,500. This can include up to 5 non-cash benefits per year (an increase from 2 benefits per year).

Pensions

An auto enrolment pension scheme which will give all employees access to a workplace pension savings scheme co-funded by their employer and the State will be introduced on 30 September 2025.

Need help?

If you are a GroForth client and need more information on any of the issues mentioned in this article, our team is on hand to help. During busy periods, the best way to contact us is via the contact form on this website or by email

Understanding the Business Case for Outsourcing

Mon, 27 Jul 2020 15:01:45 GMT

Most growing businesses reach a point where they either need to hire someone to look after their bookkeeping, payroll and accounts, or they need to outsource these functions to a specialist service provider. As with any other business expenditure, before deciding which option is best for your business, it is important to examine the business case. In this article, GroForth’s Michelle discusses

• The cost of hiring versus outsourcing

• Accounting software and training considerations

• Skills, knowledge considerations

• Key questions to ask when choosing a service provider

Cost

Cost is usually the first element to consider. You will need to compare the cost of hiring a staff member with that of using an outsourced service provider. As well as salary, remember to factor in the cost of benefits, training, office equipment and software.

Recruitment websites and online jobs boards will give you an idea of current salaries for accounts roles.

Once you have an idea of the cost of hiring/retaining an accounts professional, you will then be able to compare this basic cost with the cost of using an outsourced service provider.

Accounting Software, Training

The next step in examining the business case for outsourcing is to look at the non-staff costs. These are likely to include things like software and the associated costs of maintaining and updating systems, office accommodation, training, and keeping up to date with the latest accounting, payroll and tax rules and regulations.

Often, when these are taken into account, smaller businesses find that it strengthens the business case for outsourcing as the outsourced service provider is able to share the costs of things like software and training across a number of clients.

Skills, Knowledge

Another factor to keep in mind when you are investing in an area like accounts which is an additional cost for your business, is that it’s important to ensure you will have the answers you need at your fingertips when you need them. Today, many businesses use realtime, cloud-based accounting solutions like Xero and SortmyBooks which make it easy to keep information accurate and up to date. However, your business records only really become valuable when you understand how to use them effectively. Good management reporting is essential when it comes to forecasting and deciding on strategy.

So, if you decide to hire a bookkeeper or an accounts employee, knowledge and skills are an important area to focus on. Remember good skills include communication skills as it is important that the person you hire is able to communicate effectively with you and your team. Of course, you want to be sure that they process your information on time and keep systems up to date, but you also want to ensure that they understand how to interpret your financial information and communicate it in a way that helps your business become more profitable.

When weighing up the advantages of having an in-house accounts team who work exclusively for you versus outsourcing to a specialist who works with other businesses, keep in mind that a specialist service provider can often provide valuable insight and reporting because of their knowledge of the trends affecting businesses similar to yours — for example, they may be able to tell you if you are spending more on certain services than your peers, if your sales and pricing are better or worse than your competitors, or if your payroll costs are out of line.

Key questions to ask when choosing an accounts or payroll service provider

For many owner-managed businesses and SMEs, when they weigh up the business case, the decision to outsource accounts and payroll becomes a ‘no-brainer’. However, it is important to choose the right service provider. Key questions to ask in this regard include:

• Where are they based? There may be risks to consider if you intend to use a service provider in another jurisdiction.

• What services will they provide and what is their pricing structure?

• What automation and reporting do they have in place and how will this integrate with your existing accounts processes and systems?

• Are their systems mobile-friendly?

• Do they provide realtime information?

• What security and controls do they have in place to protect your data?

• How user-friendly are they and what support is available if you have questions or need help?

• What reports can they provide and how will they improve your bottom line?

If you are considering outsourcing your accounts or payroll and would like more information about GroForth’s services, please get in touch. We’d love to hear from you.

Accounting Firms — Do you recognise these growth barriers?

Mon, 20 Jul 2020 14:46:54 GMT

While most accounting firms want to grow their business, time constraints, staff issues and coping with difficult clients are common barriers to growth, says Sarah Daly.

GroForth recently commissioned research on the biggest problems facing accounting firms. The purpose of the study was to understand the barriers accountants face when trying to grow their business.

Our findings revealed four key pain points that will be familiar to many accountants in practice:

Time constraints - 38%
Finding/keeping good staff - 34%
Finding new clients - 34%
Working with bad/undesirable clients - 15%

This article shares details of our findings and explains how GroForth clients are successfully overcoming growth barriers with the help of our specialist back office services for accounting firms .

Time is money

Lack of time was the number one issue identified by firms who participated in our research. More than four in ten accountants (42%) said that they struggle to manage competing demands on their time and would like a better work/life balance. Time constraints are also a major barrier to business development.

So where does the time go in a busy accounting firm?

Maintaining client relationships, managing staff and running the business day-to-day tend to be the top demands on accountants’ time but they also have to stay abreast of regulatory requirements, keep skills up to date and complete their required CPD hours. That’s a lot for anyone to cope with, so it’s not surprising that many accountants struggle to make time for finding new clients, planning for growth and improving their work/life balance.

Ways to save time in an accounting firm

When it comes to saving time, streamlining administrative processes can be a real game changer. Many firms encourage clients to use accountancy software solutions like Xero and SortmyBooks. However, systems are only as good as the information available to them. If an accountant’s client does not maintain accurate records, that will inevitably lead to queries, document chasing and time consuming headaches at year-end.

In a lot of firms, chasing clients for missing information and resolving anomalies and inconsistencies don’t just increase workload — they also generate unnecessary stress and pressure for both accountants and their clients especially around filing deadlines.

Sorting out problems like this is one of the specialist services Groforth provides for accounting firms.

Other ways we help accountants free up more time include:

Finding and resolving inconsistencies,
Reconciling balance sheets,
Checking profit and loss accounts,
Ensuring fixed assets are correctly recorded,
Bank reconciliations,
Payroll support,
Issuing RCT reminders,
Generating management reports.

As well as outsourcing processes like these to a service provider like GroForth, another time-saving tip for accounting firms is to encourage clients to do more to help the accountant help them.

(See our article, What you can do to help your accountant help you.)

Better self-management can also help accountants save time. Previously on this blog I explained how technology enabled me to identify my most valuable work and eliminate time-wasting activities. I use MyHours to help with my time management.

Recruiting and retaining staff

In our research, we found that attracting and retaining capable, experienced staff is another barrier to growth in around a third of the firms. Smaller firms struggle to compete with the Big 4 and some practices worry that they may not be able to generate sufficient new business to offset the cost of hiring expensive staff.

While there is no getting away from the fact that experienced accounting staff are expensive, outsourcing back office administration can be a cost-effective way to overcome recruitment and retention problems. It means you don’t have to worry about providing salaries and training and you don’t have to provide technology and office equipment for an in-house team. Often, the decision to outsource is a no-brainer but, as with anything in business, it is important to examine the business case for outsourcing before making your mind up.

Finding new clients and divorcing time-wasters

Referrals are the number one source of new business for most accountancy practices and there is no better ambassador for your firm than a satisfied client.

Aside from your existing clients, other businesses and firms are also an important referral source so finding the time to network has to be a priority — whether that’s at industry events, CPD courses, or online.

Offloading difficult clients is equally important. Managing these time-wasters often involves many unbillable hours so identifying them and planning how to terminate your engagement with them can be just as important as finding new business.

How GroForth is helping accounting firms overcome barriers to growth

The accounting firms that GroForth supports find that by optimising schedules, embracing technology, and outsourcing work where possible they can redirect the time they free up into activities like planning, networking and business development, all of which help enhance their work/life balance while also benefitting the bottom line.

If you are interested in finding out more about our services for accounting firms, please get in touch. We’d love to see if we can help you!

Setting Financial Controls for Your Business

Wed, 08 Jul 2020 14:53:41 GMT

While every business needs effective financial controls, many small businesses and SMEs are unsure how to implement them. But what do we mean by effective financial controls and how can they help your business? In this article, GroForth’s Geraldine covers:

• What are financial controls

• Practical examples of financial controls

• How financial controls improve planning and forecasting

• Using financial controls to enhance performance

• What happens if you don’t have good financial controls

What are financial controls?

Financial controls are systems and processes that protect your business and support profitability by:

• improving planning and forecasting,

• enhancing performance,

• aiding compliance, and

• protecting your business against losses and fraud.

What are some practical examples of financial controls?

A basic financial control that every business owner needs to put in place is separating business and personal expenses. This is very important as it helps avoid tax problems. Other practical examples of financial controls include:

• Implementing a reliable accounting system,

• Carrying out regular bank reconciliations,

• Ensuring payroll is operated correctly,

• Prompt invoicing,

• Managing stock/inventory,

• Monitoring debtors,

• Preparing and reviewing budgets

• Managing cashflow,

• Keeping track of assets,

• Checking and authorising expenses and purchases,

• Identifying and managing risks.

How do financial controls improve planning and forecasting?

Effective financial controls enable you to keep track of your business income and expenditure and help you spot potential opportunities and problems as they emerge. Armed with this information, you are better able to keep your business goals realistic and relevant.

While some small businesses still rely on spreadsheets or manual accounting systems, this tends to become unwieldy when activity picks up and the business begins to grow. Relying on spreadsheets also makes it more difficult to generate meaningful management reports to help you run your business.

Consequently, most businesses today use cloud-based solutions like Xero and SortmyBooks. The advantage of these solutions is that once you know how to use them properly and input your data on time, every time, you will have accurate, up-to-date, financial information at your finger tips when planning and making decisions.

This, in turn, ensures:

• Forecasts can be based on accurate, factual data rather than influenced by bias or simply following what was done in the previous year,

• Budgets are realistic and linked to business goals,

• Progress in meeting goals is easier to monitor and problems can be quickly identified and addressed,

• Enhanced efficiency and profitability,

• Compliance with legislation and regulatory requirements becomes easier to manage,

• Easier identification and monitoring of risks.

How do financial controls enhance performance?

As well as enabling you to make better business decisions, effective financial controls also minimise risks such as overdue debts, uncontrolled costs, and running out of cash. This, in turn, helps boost the cash your business has available and/or can borrow for future investment, development and growth.

What happens if I don’t set effective financial controls?

If your business does not set effective financial controls, the problems that can arise include:

• Unauthorised access to your accounts and systems which can lead to error, duplication or gaps in records, and even fraud.

• Late invoicing and overdue debts which can result in running out of cash. There is no point in making lots of sales if you don’t get paid for them.

• Overtrading (taking on more work than you are able to complete),

• Cashflow difficulties,

• Uncontrolled costs.

In the worst situations, weak financial controls can lead to business failure. Often, running out of cash is the first sign a business is about to fail. This is why it is so important to keep a close eye on the financial position of your business at all times. There is still truth in the old saying, ‘cash is king’.

What if I don’t have the resources to implement effective financial controls?

Of course, not every business has the resources to employ a full time bookkeeper or accountant and it can be easy to let financial controls slip when you have many other demands on your time. That is why many businesses outsource their accounts to a specialist bookkeeping and back office accounting service provider like GroForth. If you would like more information about how our team can help you set effective financial controls for your business, do get in touch . We’d love to hear from you!

Back Office Support for Accounting Firms

Fri, 26 Jun 2020 14:39:05 GMT

In recent weeks, some accounting firms who rely on bookkeepers to provide on-site support for clients have run into problems due to the Covid-19 social distancing rules, says GroForth’s Sarah Daly.

Social distancing is becoming a problem for accounting firms who send a bookkeeper out to a client’s premises every week or month to keep the client’s records up to date. Typically the bookkeeper works on things like processing invoices, reconciling bank statements, chasing customers for payment, posting journal entries, preparing or checking VAT returns, and so on. However, the Covid-19 social distancing requirements mean that some clients are no longer able to allow the bookkeeper into their premises. This is leading to a backlog of processing which in turn increases the likelihood of gaps and errors in records as time goes on.

Accountants know all too well that cleaning up a client’s records can be a headache and the headache gets bigger if they have multiple clients’ records to sort out and are under pressure at a filing deadline. That’s where a specialist service provider like GroForth can help.

Reasons why accountants seek back office support

In recent weeks, I’ve had a number of enquiries from accounting firms asking about our back office support services. There are a couple of common themes: Covid-19 is forcing some businesses to completely change their administrative processes, switching some processes online to facilitate working from home or to serve customers remotely.

And it’s not just employees who are working from home—business owners and managers too have been forced to stay home due to the Covid-19 restrictions. Recently, we shared some tips on this blog about how people working from home during the Covid-19 crisis can use this time wisely.

As well as the impact on processes and people, the pandemic has also played havoc with budgets and forecasts so many accounting firms are finding that more clients than usual need help in that area at present.

Non Covid-19 related issues include clients needing help sorting out backlogs or support with payroll following the new PAYE regime that came into effect last year.

Helping accounting firms deliver high quality support for clients

For accounting firms, an advantage of using Groforth’s back office support services is that we understand these problems and are very focused on finding solutions that help accountants deliver the high quality support that their clients have come to expect.

Our relationships with accounting firms are based on trust and we put a lot of emphasis on things like privacy, security and controlling and limiting access to data.

It’s important that our accountancy firm clients know we’re not trying to poach their business. We actually want to help them to grow their businesses. Our focus is on giving them more time to concentrate on their higher value work as well as on their business development.

Process driven

A lot of back office accounting work is process driven. As a process driven business ourselves, we understand how to streamline processes and enhance efficiency and we’ve been working in accounts long enough to know where to find the opportunities for improvement.

Using technology to enhance back office support

We also know that good decisions depend on access to good information so we put a lot of emphasis on using data to generate reports that really add value for our customers. Technology is key. Today’s online systems make it easy to capture data at its source whether that is bank statement, invoices, point of sales information, or expenses. However, it’s only when you know how to leverage that information that you can really start to add value.

Our knowledge of accounting software packages like Xero and SortmyBooks, as well as a broad range of other technologies and apps, means we understand how to automate processes quickly. This has been a great advantage during the Covid-19 pandemic. Our experience is very helpful for accounting firms who may not have the right in-house resources to support their clients in this area in the current crisis.

Traditional back office accounting work

At the same time, GroForth still does a lot of the traditional back office work that accountants need — chasing missing documentation, finding and resolving inconsistencies, reconciling balance sheets, checking profit and loss accounts, ensuring fixed assets are correctly recorded, doing bank reconciliations, tracking down missing payroll data, finding errors in VAT rates, issuing payroll and RCT reminders, and so on. Even if an accountant’s client is using paper invoices, for example, we can take the invoices and scan them — digitising the data first so that we can then digitalise the process.

Outsourced finance department

As well as providing back office support for accounting firms, GroForth also acts as an outsourced finance department if an accountant recommends that his/her client should outsource their finance function or management accounting. Some accountants tell us that their clients don’t always understand what this involves so we recently wrote an article to explain what it means to outsource your accounting or bookkeeping.

New Normal

At the time of writing, we are beginning to see the first tentative moves towards lifting the Covid-19 lockdown restrictions.

So, if your accounting firm needs back office support while adapting to the ‘new normal’, do get in touch.

We’d love to hear from you!

Travel and Subsistence Allowances for Business Travel

Tue, 12 May 2020 14:31:23 GMT

12th May 2020

Sarah Daly explains what employers need to know about employee travel and subsistence allowances.

As an employer, you may require your employees to travel for work from time to time. Depending on the circumstances, your employees may be entitled to a travel and subsistence allowance for this travel.

Set out below are the answers to some frequently asked questions about employee business travel and subsistence payments.

What is business travel?

Business travel is deemed to occur when an employee travels on business to a destination that is not their normal place of work. Travel between an employee’s home and their normal place of work is not considered business travel.

How is business travel calculated?

Business travel is calculated in kilometres and is the lower of either:

The distance between the employee’s home and the temporary place of work; or

The distance between the normal place of work and the temporary place of work.

What if my employee uses their own vehicle for business travel?

If your employee uses their own vehicle for a business journey, you can pay them a tax-free allowance. There are two options — either:

you can pay them the actual amount spent (they must provide receipts), or

you can pay them an amount based on the Civil Service rates per kilometre.

What are employee subsistence payments?

If an employee is required to work away from their normal place of work, you may also repay them for their subsistence costs. Again, these payments can either be based on reimbursement of the actual amount spent (based on receipts) or based on the Civil Service subsistence rates.

Where can I find the Civil Service travel and subsistence rates?

The relevant Civil Service Rates can be found on the Revenue website.

How are travel and subsistence payments treated in the payroll?

If you make travel and subsistence payments to your employees, these should be run through the payroll as a tax-free addition.

What if I need help to manage travel and subsistence payments to my employees?

Outsourcing your payroll can be a great way to make sure that your payroll submissions are accurate and comply with the latest regulations. GroForth administers travel and subsistence payments for many of our clients as part of our outsourced payroll service. For details, please get in touch.

What does it mean to outsource your accounting or bookkeeping?

Wed, 11 Mar 2020 15:42:16 GMT

Businesses are not always sure what it means to outsource their accounting or bookkeeping. In this short article, Sarah Daly explains what’s involved.

Outsourcing your accounting is where you hire an external service provider to carry out certain tasks for your business. Usually the tasks involved are administrative, repetitive and time-consuming. Often, they require specialist skills. Bookkeeping, payroll, HR and IT support are examples of tasks that businesses often outsource.

Why do businesses outsource their accounting or bookkeeping?

There are several reasons why businesses decide to outsource their accounting or bookeeping. At GroForth, the most common reasons that we come across include:

Your accountant has recommended that you outsource your bookkeeping

You do not have the necessary skills or knowledge to carry out the tasks yourself

You have a backlog or are struggling to keep up to date because you are too busy with other, more urgent priorities

You can’t afford to hire an in-house accounts staff member

The person looking after your accounts is unable to cope as your business has grown and/or become more complex

You want to reduce costs

You don’t have the resources to invest in the technology needed for certain tasks

You are not confident that you are carrying out the tasks correctly

You have high turnover of staff members

You are struggling to keep on top of changing legislation and regulation requirements

You are incurring penalties or fines due to filing late returns

What should you think about before deciding to outsource your accounting or bookeeping?

Business owners who decide to outsource tasks like accounting or payroll need to be confident that the service provider they choose is competent, reliable and has the necessary knowledge and skills to comply with regulatory requirements.

Key areas to look at when choosing a service provider include quality control, confidentiality, data management and control. It is important that scope of the outsourced activities is included in the service contract and that the responsibilities of each party are clearly set out. (Previously, we provided more information on what you need to think about in this article on outsourcing your finance department.)

What are the main benefits of outsourcing your accounting or bookkeeping?

For many GroForth customers, a key benefit of outsourcing their accounting is that it frees them from time-consuming administration and allows them to concentrate on the value-adding areas of their business. Outsourcing also increases efficiency and reduces costs for many customers as they can save on staff costs and equipment. (For more information on this, see our earlier blog on why businesses outsource their financial management).

Many of our customers say that they gain in other ways too. Customers cite benefits such as timely raising of invoices which can help improve cashflow and the regular reports that GroForth provides which help them to be better informed when making business decisions.

If you are interested in finding out more about outsourcing your accounting or bookkeeping and how GroForth’s outsourced finance services could benefit your business, why not give us a call? We’d be happy to have a chat and explain more about our services and how we can help save your business time and money.

Maternity Benefit Basics – For Employers

Wed, 04 Mar 2020 14:15:04 GMT

In a previous article , we explained some of the basic about maternity leave. Today’s article focuses on how maternity benefit interacts with payroll.

All female employees in Ireland are entitled to maternity leave and, depending on their PRSI contributions, many also qualify for Maternity Benefit.

Maternity Leave and Maternity Benefit are separate concepts so it is important to know which is which:

Maternity Leave is a statutory entitlement to time off work, before and after giving birth. It applies to all employees regardless of how long they have worked for you or how many hours they work.
Maternity Benefit is a weekly payment from the Department of Employment Affairs and Social Protection that an employee on maternity leave may qualify for if they have sufficient PRSI contributions in the relevant period.

How Maternity Benefit Works

Your employee will need to apply for maternity benefit either online through MyWelfare.ie, or by post to the Department of Employment Affairs and Social Protection (DEASP). They must apply at least 6 weeks before the intended start date of maternity leave. At the time of writing, the benefit is usually €245.00 per week but may be increased or reduced in certain circumstances. The amount of maternity benefit is assessed by DEASP.

As an employer, you must complete an MB2 form which your employee should supply. Alternatively, this form can be downloaded from Gov.ie.

Payroll Considerations

Payroll for employees on maternity leave can work in several different ways. The first thing to consider is the contract of employment as this will determine your payroll obligations.

If your employee is not entitled to any maternity pay through their employment contract, then subject to meeting the qualifying requirements, they will receive maternity benefit directly from DEASP. In this situation, you don’t need to run a regular payroll for them

If your employee is entitled to maternity pay under their contract, there are two ways this can be paid:

You can pay your employee a ‘top-up’ amount. This is where your employee receives their maternity benefit directly from the DEASP, and you pay a separate amount on top of this. The ‘top-up’ is run through payroll as usual.
You can continue to pay your employee their full wage. In this scenario, the benefit from DEASP is usually paid directly to you, the employer. You pay your employee their normal gross salary however the ‘Benefit’ portion of the payment must not have USC, PRSI, or PAYE tax applied. The rest of the payment should be taxed as usual based on the most up to date Revenue Payroll Notification (RPN).

You also need to keep in mind your employee’s rights in respect of public holidays and decide whether to pay for public holidays, or accrue the relevant days as extra annual leave when your employee returns to work.

How GroForth Can Help

Our payroll specialists have a lot of experience handling maternity leave and maternity benefit administration for employers. To find out more about our services and how we can help your business, get in touch .

Good communication starts with being clear to yourself!

Wed, 19 Feb 2020 14:06:35 GMT

Regardless of where you are on your business journey, good communication is vital, says Sarah Daly.

"The longer I am in business, the more I appreciate the importance of good communication in every virtually every interaction, including how I communicate with myself! Perhaps the most important lesson that I have learned over the years is that clarity is the key to effective communication. Only when I am clear about what I want to achieve, can I articulate my expectations to others.

"Regardless of where you are in your business journey, I suspect good communication is equally important to you. Most of us have many different groups that we communicate with regularly — from existing and prospective customers to employees, business partners, suppliers and other stakeholders.

It can be easy to take existing customers for granted. However, poor communication is a sure-fire way to trigger complaints. The better we understand customer expectations and the more clarity we can provide about what we will deliver, and when, the better we can manage expectations and keep complaints to a minimum.

Similarly, being able to communicate our vision and values is vital when we want to provide team members with clarity about what is expected of their role, how we want them to represent our business, and how their individual goals support our wider team goals.

When it comes to prospective customers, one of the first lessons every entrepreneur learns is the importance of having a good ‘elevator pitch’ — the sentence or two that tells people you meet for the first time what your business is about. Unless we can communicate our business proposition clearly to prospective customers, we are unlikely to win their business.

Among business partners, suppliers, and other stakeholders, misunderstandings and conflicting objectives can escalate to become a source of tension or, worse still, trigger disputes. This is an area where formal communication such as written agreements can often be helpful. At this time of year, as I draw up my plans for 2020 and think about my goals for the year ahead, communication is definitely on my agenda — not just as a desirable soft skill but as a key enabler of better business performance."

If you are thinking about outsourcing your finance department and would like more information about GroForth’s services, please get in touch.

Maternity Leave Basics – For Employers

Wed, 12 Feb 2020 13:51:58 GMT

This short article explains the responsibilities of employers and employees regarding maternity leave.

All female employees in Ireland are entitled to maternity leave. As an employer, it is important to understand both your own responsibilities and those of your employee in respect of this leave.

Employer Responsibilities

An employee who becomes pregnant is entitled to 26 weeks maternity leave, plus an optional 16 weeks of unpaid leave. The additional leave must begin immediately following the end of the 26 week-period.

In addition, your employee is entitled to

Return to work to the same job on the same contract of employment. If this is not reasonably practicable, you may provide alternative suitable work;
Paid time off for medical visits connected with the pregnancy, both before and after the birth, and certain ante-natal classes; and
Leave for any public holidays that occur during maternity leave or additional maternity leave. This can be accrued as extra annual leave days, or paid out to the employee.

There are certain situations where changes to maternity leave are allowed. These include miscarriage or stillbirth, premature birth, or illness. Further information can be found here.

If your workplace poses risks to a pregnant employee, you may be required to provide alternative duties or health and safety leave for your employee. More information on protecting pregnant employees can be found here.

Employee Responsibilities

The pregnant employee must:

Give 4 weeks’ notice of their intention to take maternity leave;
Provide a medical certificate confirming their pregnancy and due date;
Take at least two weeks of maternity leave prior to the week in which the baby is due; and
Give 4 weeks’ notice of their intention to return to work at the end of their maternity leave.

Difference between Maternity Leave and Maternity Benefit

Maternity Leave and Maternity Benefit are separate concepts:

Maternity Leave refers to the statutory entitlement to time off work, before and after giving birth, and applies to all employees regardless of how long they have worked for you or how many hours they work.
Maternity Benefit refers to a weekly payment from the Department of Employment Affairs and Social Protection that an employee on maternity leave may qualify for if they have sufficient PRSI contributions. Some employers provide additional payment during maternity leave. This depends on the terms set out in the employee’s contract of employment.

How GroForth Can Help

Our team has extensive experience managing maternity payments and providing administrative support for maternity leave on behalf of our clients. To find out more about our services and how we can help your business, please get in touch.

Thinking about outsourcing your finance department? Here are five questions to consider

Wed, 05 Feb 2020 15:08:09 GMT

Typically, business owners become aware that they need additional financial management resources when backlogs start to build up. Delays in raising invoices can lead to late payments and cashflow problems while late filing of data with Revenue can result in penalties and fines. Outsourcing your financial management can be a good way to keep on top of administration and avoid these problems, explains Sarah Daly.

Previously on this blog, we explained some of the reasons why businesses consider outsourcing. Finance department tasks such as accounts receivable, accounts payable and management reporting are among the processes most often outsourced when businesses are growing. When thinking about outsourcing, here are five key questions to consider:

Organisation.

What stage of development is your business at? Are you expanding? Entering new markets? Investing? Implementing change? If day-to-day administration is taking up too much of your time each day, outsourcing could relieve the pressure and allow you to focus on more productive activities.

Personnel.

Do you have adequate staff available in-house to manage your company’s accounts? Are you confident that your staff’s knowledge is up to date and that they have the relevant skills to produce, and interpret, the financial information you need to develop your business. Having access to up-to-date, accurate financial information is vital but it can be difficult to stay up to date in periods of rapid growth or change. If you are struggling to produce timely, relevant information — or if you have difficulty understanding how to use financial information to improve your business performance — outsourcing could be a good option.

Functions.

A good question to ask outsourcing service providers like GroForth is, “What accounts functions are typically outsourced by businesses similar to mine?’ For example, if accounts payable is outsourced, the outsourced finance department will usually manage processes like data capture, processing invoices, and payments disbursement.

Data security.

This is an extremely important consideration for all businesses as breaches of data privacy can lead to substantial fines as well as repetitional damage for your business. When considering outsourcing, remember to satisfy yourself on the security aspects of how — and where — your data will be stored, processed and kept secure.

Quality control.

Because of the critical importance of financial information, you also need to satisfy yourself that the outsourcing service provider you choose has appropriate controls in place both to deliver the level of service that your require and to protect your business.

If you are thinking about outsourcing your finance department and would like more information about GroForth’s services, please get in touch.

Payroll Modernisation

Fri, 31 Jan 2020 15:11:45 GMT

Payroll Modernisation took effect at the beginning of 2019, and brought significant changes to the payroll system in Ireland. Here are a few changes that both employers and employees may notice.

Elimination of Form P35

Employers are no longer required to file an annual return for their payroll. Employers are now required to make payroll submissions at the time they pay their employees. Because these submissions are made in real time, Revenue will already have the information they need at year end and there is no requirement to make any additional submissions.

Elimination of Form P60 and P45

Employees will no longer receive a P60 at the end of each year. Instead, all the information that would have been included on a P60 is now available through Revenue’s MyAccount service.

Similarly, when an employee leaves a job, they no longer receive a P45. Instead, the employer will report the leaving date to Revenue through a payroll submission and the details of that employment will also be available through Revenue’s MyAccount service.

If your employee asks for a P60 or P45, you can direct them to log in to their MyAccount here.

If they are unable to create an account, Revenue’s PAYE phone helpline number is: 01 738 3636.

Payroll is a constantly evolving area and can be surprisingly complex. The experienced team at GroForth can help – we use the most compliant payroll software solutions and keep constantly up to date with payroll regulations, so you don’t have to. Email us at info@groforth.com or ring our office on 01 905 9436.

Why do businesses outsource their financial management?

Wed, 22 Jan 2020 15:01:48 GMT

Sarah Daly describes five key ways in which outsourced financial management could benefit your business.

Outsourced financial management is a popular option for many businesses. It is particularly helpful when a business is growing and/or does not have an in-house team that can meet its financial management needs. In our experience, there are five key ways in which clients benefit by outsourcing financial management to GroForth.

1. Access to staff with specialist knowledge and skills.

Getting your numbers right, and keeping them right, is vital for any business but this is a skill that is not always available in-house. However, unless you have up-to-date, accurate financial information, you cannot be sure that your business decisions are soundly based.

Worse still, inaccurate data could land you in trouble with the Revenue, leading to fines and penalties, not to mention taking up valuable time that could better be spent developing and growing your business. At GroForth, our priority is helping you get your numbers right, and keep them right, so that you can focus on looking after your customers and developing your business.

2. Cost savings.

Outsourcing your accounts department means you don’t have to worry about providing salaries and training for a finance team. Outsourcing can also reduce your capital expenditure costs as you don’t have to provide technology and office equipment for an in-house accounts team.

3. Benchmarking.

GroForth can provide you with benchmarking information to help you assess how your business is doing in comparison to similar businesses in your sector. Our clients find that this service helps them to identify areas for improvement so that they can grow their bottom line.

4. Management.

As well as improving the information available to you for decision making, outsourcing can also help to strengthen the financial controls in your business and provide early warning signals when things are going wrong.

5. Compliance.

Outsourcing makes it easier to keep up to date with changes in legislation and other regulatory developments. Monitoring Revenue and other relevant developments that affect our clients is a key part of our business at GroForth. We continuously invest in training and developing our team so that we can deliver the best possible service for our clients.

To find out more about outsourcing and how GroForth’s services could benefit your business, get in touch. Email us at info@groforth.com or ring our office on 01 905 9436.

Employers - Payroll Issues to watch out for in 2024

Sat, 04 Jan 2020 15:36:16 GMT

2024 Revenue Payroll Notifications

Remember that you cannot use 2023 Revenue Payroll Notifications for 2024. RPNs for 2024 are available from Revenue. It is important not to file a payroll submission with a 2024 pay date until the 2024 RPN is available.

National Minimum Wage

The national minimum wage will increase by €1.40 per hour to €12.70 per hour from 1 January 2024.

Payroll taxes

Changes announced in the Budget that will affect payroll in 2024 include a €2,000 increase in tax bands and modes increases in personal tax credits. For details of these and other relevant changes see our Budget 2024 article.

PRSI

PRSI contribution rates will increase by 0.1% from 1 October 2024. This will affect all PRSI contribution rates. There is due to be a further 0.1% increase in 2025.

Enhanced reporting requirements

Enhanced reporting requirements come into effect on 1 January 2024. This will affect you if you provide certain reportable benefits to your employees or directors. Reportable benefits include the remote working daily allowance, travel and subsistence expenses and benefits such as Christmas vouchers which avail of the small benefit exemption. (For details, see Nikki’s September article on reportable benefits.)

Additional leave entitlements

If you haven’t already done so, it’s important to familiarise yourself with two additional leave entitlements that were introduced last year. Medical Care Leave came into effect on 3 July 2023 and entitles employees to up to 5 days unpaid medical care leave in any consecutive 12-month period. Domestic violence leave came into operation on 27 November 2023 and entitles employees to take up to 5 days paid domestic violence leave in any 12-month period. These additional leave entitlements have workplace policy and record-keeping implications for employers.

Pensions

An auto enrolment pension scheme which will give all employees access to a workplace pension savings scheme co-funded by their employer and the State is due to be gradually phased in, starting in late 2024.

Other issues

Although not directly related to payroll, other issues to be aware of include new whistleblowing obligations and a one-off grant to help businesses cope with increased costs.

Whistleblowing: From 17 December 2023, all private sector organisations with 50 or more employees must establish internal channels and procedures for their workers to report wrongdoing. Previously this requirement only applied to organisations with 250 or more employees. Public sector organisations must comply with the requirements regardless of size. (More information is available on the Workplace Relations Commission website).

Increased cost of business grant: This grant was announced as part of Budget 2024. It is due to be paid in once-off grants to small and medium businesses in the first quarter of 2024. It will provide a cash injection of up to €5,000 for over 140,000 eligible businesses. (Further information is available on ie)

Need help?

Time is Money!

Sat, 16 Nov 2019 11:09:21 GMT

When we are too busy it is all too easy to lose sight of where we are spending our time, particularly if we are juggling projects and/or clients. This problem can be even more acute where we have teams working on multiple projects. It is not unusual to find that a project takes a lot more time than originally envisaged, or continues to absorb time even though it has been superseded by a new project and is no longer relevant. Project management software can help you a great deal when dealing with these kinds of problems.

Sometimes ‘scope creep’ happens when a client asks for more work than was envisaged in the original brief or changes requirements before a project is completed. Unless these problems are identified and dealt with, they can end up costing a lot of money without ever satisfying client expectations.

There is truth in the old saying, ’Time is money!’ It is important when costing projects to be clear about what is included and to communicate this to your client — whether the client is an internal customer in your organisation or an external customer. Estimate how much time and technical support will be required and discuss how any additional costs will be allocated if extra work is subsequently needed. Transparency and clarity up front can save headaches at a later stage.

Keep in mind that while time tracking software, such as MyHours, can deliver valuable insights, you need to exercise good discipline when it comes to data input. Insights are unlikely to benefit your bottom line unless the data they rely on is accurate and up-to-date.

Need an independent view?

When you are very busy and/or overloaded with demands on your time, it is easy to find yourself in ‘firefighting’ mode, losing sight of the big picture. If you find it difficult to be objective about prioritising tasks, allocating time, monitoring workloads, delegating effectively and measuring progress, it can be helpful to get advice from someone who understands your business.

GroForth specialises in helping growing businesses, technology companies and accounting firms to maximise their efficiency and control costs. Contact us at info@groforth.com or ring our office on 01 905 9436.

Practical tips to help avoid tax penalties

Fri, 15 Nov 2019 14:57:21 GMT

In Ireland, tax payers are required to manage their finances so that they can pay tax when it is due. While it’s not always easy to find time for administration when you’re running a busy business, keeping your tax affairs in order is essential if you want to avoid Revenue interest, penalties and fines.

One practical tip that I often share with GroForth clients is to open a separate bank account for Revenue bills. This helps in a number of ways. For example, if you set aside about 20% of your income from each invoice you issue, you will have money available to pay your tax bill at the end of the year.

Likewise, if you employ staff, you can put 10%-20% of the net amount of each invoice into your Revenue account so as to ensure you have money available to meet your PAYE obligations. This is important because if your payment to Revenue is late, you will be charged interest.

If your business is VAT-registered, you can transfer the VAT element of invoices into this account so that you will have money available to pay over to Revenue when your VAT is due. If you do not pay VAT on time, interest is charged on a daily basis from the date the payment is due until the VAT is paid.

The peace of mind that you get from knowing you have money available to meet your tax bills is really important but so, too, is paying your bills on time. Putting good processes in place to manage your finances will help you keep on track and avoid unnecessary interest charges, penalties and fines.

If you need information and/or advice about putting good procedures in place, contact our team for assistance. Email us at info@groforth.com or ring our office on 01 905 9436.

Ten tips to improve your business networking

Wed, 06 Nov 2019 13:47:06 GMT

The ability to network is an important business skill but it doesn’t come naturally to everyone. In fact, it’s fairly common to feel a bit shy at networking events. However, the more you improve your networking, the more your business will benefit.

Like any other skill, networking skills can be developed over time once you are willing to learn. The most important thing is to get started by working on your confidence and focusing on what you want to achieve. Set out below are ten tips to help you on your way.

Ten tips to improve business networking skills:

Attend relevant business and social events.
Do your homework before events. A bit of research on the theme or speakers will often provide useful conversation starters.
Dress appropriately and make sure that your clothing is comfortable. This will help you feel more confident when meeting new people.
Practice how you describe your business and what you do. The more comfortable you are with your ‘elevator pitch’, the more confident you will feel when new contacts ask you what you do.
When you are introduced to a new person, repeat their name aloud as this will help you to remember it.
Ask questions and develop your listening skills. This helps show you are genuinely interested in the person you are speaking to.
Follow up new introductions promptly.
Avoid making promises you don’t intend to keep. For example, don’t say, ‘I’ll call you next week’ if you know you won’t call.
Volunteer for committees and/or projects as this can be a good way to build relationships and improve your communication skills.
Leverage your online networks. Participating in online discussions and groups, such as LinkedIn discussions or groups, can be a good way to keep an eye on industry developments.

Too shy to network?

Even if you are shy, you can become a good networker by focusing on what you want to achieve. Make a list of the reasons why you want to improve your networking as this will help you to focus.

These reasons may include a wish to:

Strengthen your existing business relationships and develop new contacts.
Improve confidence and enhance communication skills
Raise your profile and stimulate interest in your business
Generate new ideas — a valuable benefit for owner-managers and sole traders.
Keep up to date with industry news and developments which, in turn, can alert you to emerging business opportunities or provide an early warning of potential trouble ahead, for example that a key customer or supplier may be in trouble.

As with most things in life, what you get out of networking depends on what you put in. In my experience, the most effective networkers see tangible results on their bottom line through increased referrals and new contacts. In today’s connected business world, perhaps the real question is not should you improve your networking but can you afford not to?

Are you a business owner or manager who wants to improve efficiency and effectiveness? Get in touch now. Email info@groforth.com or ring our office on 01 905 9436.

Helping Clients Understand the Numbers

Wed, 23 Oct 2019 16:16:42 GMT

To understand where your business is today, plan for where you want it to be tomorrow and work out how to get there, you have to be able to access accurate, up-to-date information. Yet, with more internal and external data resources becoming available all the time, it can be difficult for business owners to know where to focus.

It should go without saying that understanding financial data ought to be the first priority. Unless you have proper oversight and control of your company’s income and expenses, you will not be able to successfully grow your business, control costs, source funding and stay competitive.

Getting to grips with your financial information is not just about keeping your accounts in order or preparing your tax return. While these activities are certainly important, it’s equally important to understand how to draw insights from your financial information and use that to develop your business. A properly implemented finance system — whether in-house or outsourced— should streamline your day-to-day administration, provide up-to-date data to help you see the big picture, tell you who your most valuable customers are, identify trends, assess how you are doing compared to similar businesses in your industry, and so on.

Today, there are plenty of tools available to help with these tasks — from real time accounting and time tracking software to external data sources for credit checks. Yet, while many early-stage businesses are happy to spend money on marketing solutions, they are often less willing to spend even a modest amount each month on accounting. This can be a missed opportunity, not least because it limits their ability to make good decisions for your business.

GroForth client Anita Donoghue, Managing Director of Hair Cafe Salon, found that she was able to make better strategic business decisions once she got to grips with her business finance.

“My goal was to understand the financial aspect of my business to make better financial decisions and to enter Network Dublin’s New Emerging Business Women of the Year. A huge part of the interviewing process with Network Dublin is that you understand your business finances and your business financial strategies. GroForth explained my business accounts and financial issues in a language I could understand and learn from. I’m delighted to say with Groforth’s help I won Business Women of the Year for Network Dublin,” Anita said.

GroForth specialises in helping businesses like Anita’s to understand their key financial indicators so that they can maximise their efficiency and control costs. To find out more about our services and how we can help your business, get in touch now.

How to Best Deal with a Revenue Letter

Mon, 04 Mar 2019 13:37:13 GMT

Act – allow your accountant or bookkeeper to help you deal with that dreaded Revenue letter.

A letter from Revenue strikes fear into the heart of most but for most, this fear is irrational. If you take a measured, active approach there is no need to worry. When such a letter arrives take a deep breath and follow the steps of engagement below:

Breath and then breath again.
Read the letter.
Reread the letter aloud, an action that will focus your attention and give you a deeper understanding of what is being asked of you. This is a simple yet effective way to reduce panic.
Once you understand what the letter is in reference to, take note of who it is from – their name, number and email address. Know what you are dealing with and who you are dealing with.
At this point there are two avenues available to you:
Contact Revenue directly asking what exactly they require and how best to get this information to them.
Contact your accountant or bookkeeper and ask them to help you, after all, they are the professionals and have all the tools and knowledge in their arsenal to deal with Revenue quickly and forthrightly.

By following the steps outlined above Revenue will know that you have received their letter and are dealing with it. Know that Revenue wants to engage with you and resolve all situations as quickly as possible.

If for whatever reason you choose to contact your accountant or bookkeeper and ask them to deal with Revenue do so quickly and ensure that they not only deal with the situation actively but keep you in the loop throughout the process.

Revenue first and foremost want to open a dialogue, if you simply ignore a letter from them due to fear or panic this dialogue cannot begin. Your preparation cannot begin, be it for a simple query or an audit. If you act and open and maintain that dialogue you will soon see that when dealt with head on, most issues can be resolved swiftly and painlessly.

Remember your accountant and bookkeeper are professionals and as such they are best placed to help you with any queries from Revenue. They can actively deal with Revenue on your behalf or advise you how best to deal with them yourself. They are there for you, engage with them as soon as you can and not a week before a deadline.

Preparation is key, and knowledge is power. Allow the professionals to take the reins. They know Revenue and they know you. Trust them.

We hope the tips mentioned above will help you make better decisions. If you have any questions, drop us a quick email on info@groforth.com.

Getting your business processes in order for 2021

Wed, 20 Nov 2002 13:56:36 GMT

Implementing effective accounting and payroll systems will give you more time to focus on business planning, says Sarah Daly.

With planning for 2021 well underway at the moment, a priority for many businesses will be putting the right processes in place to survive, and hopefully thrive, in the so-called ‘new normal’ environment.

While the environment has changed dramatically when compared with this time last year, the principles that underpin effective management remain the same. You still need to get the numbers right, manage cashflow, and look after your employees, customers and suppliers. You also need to focus on strategy rather than allowing yourself to become bogged down in the day-to-day crises that will always want to fill up your time.

Bookkeeping and accounts

This is a good time of year to review your bookkeeping and accounting processes. If backlogs have built up, now is the time to deal with them. Whether through growth, or simply due to lack of time, it is not unusual for businesses to reach a point where they either need to hire someone to look after their bookkeeping, payroll and accounts, or they need to outsource these functions to a specialist service provider. Whichever route they choose, these are big decisions for a small business.

Often, outsourcing will be the most cost-effective option, but as always, there are pros and cons to consider. Previously on this blog, we explained how to examine the business case for outsourcing.

If this is something that you are considering, please get in touch. We’d love to hear from you.

What to focus on when reviewing your accounting processes

If you still look after your own bookkeeping and accounting, tasks that need to be carried out include checking debtors and assessing what action may need to be taken to follow up on any money you are owed.

Cashflow is more important than ever at the moment with many businesses in difficulty due to the impact of the Covid-19 pandemic and Brexit so you also need to tackle any improvements that may be needed in your cash and working capital processes.

Costs also need to be reviewed, checking that 2020 purchases are correctly coded so that you will have accurate data in your accounting system when it comes to preparing your budgets and forecasts.

Other administrative tasks on the ‘to do’ list are likely to include:

Reconciling balance sheets,
Checking profit and loss accounts,
Ensuring fixed assets are correctly recorded,
Bank reconciliations

Chasing missing information and resolving anomalies and inconsistencies will increase the workload, adding to the demands on your time in what is often already a highly pressured environment.

Cloud accounting

Cloud accounting systems like Xero and SortmyBooks can take a lot of the pain out of routine accounts administration however any system is only as good as the information it is given. Unfortunately, if you don’t record transactions accurately as they occur, you won’t be able to rely on the data in your system when it comes to budgeting and forecasting. This, in turn, means that your forward planning process will be more time-consuming than it needs to be.

Payroll

Payroll is another time-consuming task and this year’s disrupted working patterns due to Covid-19 created additional headaches. It has not been easy to keep up to speed with the various Government supports introduced to help businesses and individuals through the pandemic. The changes were sometimes difficult to implement where employees work non-standard hours or have different pay, benefits and conditions. As a payroll service provider looking after businesses in a range of different sectors, GroForth has seen at first hand the difficulties small businesses encountered this year with many looking for help to reduce the administrative burden.

Making time for yourself

Like many small business owners, I have too many demands on my time so I know from personal experience that when we are constantly on call for clients, employees, family and friends, it is easy to fall into ‘firefighting’ mode, focusing more on who shouts loudest than on what is best for ourselves and our business. Previously, on this blog, I shared tips on the techniques and tools that help me to manage my time more effectively.

Lack of time isn’t just a problem for small businesses, it also affects their accountants and was the number one barrier to growth identified by accounting firms who participated in GroForth research earlier this year. More than four in ten accountants we surveyed said that they struggle to manage competing demands on their time and would like a better work/life balance.

Streamlining business processes is a great way to improve operations while also getting time back for yourself.

So, if this is a priority for your business in 2021, why not contact us for a chat to find out more about our services and how we can help.

What you can do to help your accountant help you

Wed, 20 Feb 2002 15:45:59 GMT

The quality of the information you provide for your accountant can enhance, or limit, their ability to help you, explains Sarah Daly.

For many business owners, their accountant is their most trusted advisor. Usually, your accountant is the one person who really understands your business and is your first port of call for advice on everything from dealing with the bank and Revenue, to raising finance, growing the business and planning for succession.

However, your accountant relies to a great extent on the information that you provide to him or her. So, if that information is incomplete, inaccurate or out of date, it can have a significant impact on your accountant’s ability to help you. This is one of the reasons why many accountants encourage their clients to hire a bookkeeper or outsource their accounting to specialist service providers like GroForth.

Timely, accurate financial information

To understand your business and plan ahead, you have to be able to access accurate, up-to-date financial information. Unfortunately, the busier you are, the harder it becomes to keep on top of day-to-day administration. Orders can flying in the door faster than ever before, but unless you are raising invoices and getting paid in a timely manner, you could find that you are running out of cash.

It is an easy situation to fall in to, particularly in growing businesses where the volume of transactions is increasing week on week. The invoice that you were half-way through raising when you were interrupted by something urgent never gets completed and you don’t get paid. Let things like this slip and it becomes much harder to manage your business because the information you have access to is incomplete, inaccurate or out of date.

Outsourcing your accounts and bookkeeping

Accountants are all too familiar with the panic business owners experience ahead of filing deadlines when transactions and/or documentation is missing or anomalies are discovered that cannot easily be tracked down and resolved. This is why many accountants recommend that their clients outsource their bookkeeping or accounting to service providers like GroForth.

Outsourcing means you don’t have to worry about day-to-day record-keeping and reconciliations as the service provider looks after these tasks for you. Typically, tasks like data entry of sales and purchases, bank and VAT reconciliations, debtors lists, and so on are looked after by the outsourced service provider. Another advantage of outsourcing is that it can save you money as you don’t have to pay salaries and provide training or equipment for an in-house bookkeeper.

How realtime information helps your accountant

When it comes to helping your accountant help you, the cloud-based accounting solutions like Xero and SortmyBooks that are used by many businesses today make it easier than ever to access real-time information about a business. Sharing this information with your accountant can enhance their ability to provide timely, relevant advice.

By allowing your accountant to see the accurate state of play, they can get to grips with the ‘big picture’ and advise you on how to address potential problems like late payments, spot opportunities, and plan ahead for the future success and growth of your business. However, the information that your accountant can extract from your accounting system is only as good as the information that you put in. This is why it is so important to keep on top of day-to-day record keeping.

In our experience, growing businesses often spend money on marketing every month but hesitate to spend on accounting. This can be a missed opportunity as it can affect your ability to make the right decisions for your business. So, next time your accountant suggests outsourcing your bookkeeping, don’t rule it out on cost grounds. It’s a tax deductible expense that could actually save you money!

If you are thinking about outsourcing your finance department and would like more information about GroForth’s services, get in touch.