Director Principle Point
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Making time to worry about business basics

A simple shopping trip to Bath left Richard Sergeant wondering: how can even the simplest of businesses find themselves in the most complex of situations, often by their own devices? And what does this tell us about our brave new digital future?

19th Sep 2019
Director Principle Point
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city of bath

Autumn is upon us, which brings with it the next round of conferences, vendor workshops and events, all keen as mustard to promote futuristic ways for accountants and their clients to move to the next level.

Away from the hustle and bustle of AI, blockchain and heterogeneous data mashing, however, and a single shopping trip to the city of Bath had me wondering about some of the very basics of business. Here’s a rough outline of how my day went: 

Shop 1

I was buying a new piece of pottery for my underfunded collection. However, it wasn’t just the pot that caught my eye, but the way the shop owner was dealing with the payment and processing of the transaction.

Card payments were fine, but the owner was using a card reader that I’d never come across before. He’d apparently picked it up online for about £10. The bad news was that it took four goes to complete the transaction; a problem that he was convinced was his mobile phone connection, and nothing to do with the tape that was holding the back of the device on.

I asked which accounting software he linked to. The answer? “None, I download the transactions every couple of days and add them to my spreadsheet”.

We quickly moved on to Making Tax Digital, which he informed me was about using software to post his VAT. However, he had huge trouble making the bridging software work. I suggested buying a piece of bookkeeping software: surely that would make his life a lot easier? No, and then followed a detailed analysis of the complex VAT situation he has to keep on top of, mainly due to much of his stock being a mix of buy and sell, or a sale-or-return basis. His spreadsheet keeps him sane.

And what about his accountant? Do they help out? And it transpires they do. Once every quarter someone from the firm pops in and they talk through any issues, give the VAT a once-over and talk about salary and drawings expected for the next quarter.

The firm also talks to him about software, a lot. They talk about helping him with his POS system, automating bookkeeping and how to simplify his VAT. And? “I’m not that interested at the moment. I just want to make sure I can get this spreadsheet filing working first, and then once I’m happy that works I can think about moving systems”.

I paid, got a hand-written receipt (beautiful pen work), and a commitment to phone me if any new piece I might like came his way.

Shop 2

At the next establishment, I was looking for a present and went to one of those shops selling jewellery and knick-knacks for those quick ‘I-haven’t-got-a-clue-what-to-get-you’ type purchases.

I selected two items and went to purchase them. What I hadn’t realised was that the outlet was actually two shops in one, and half the items were from one retailer and half from another.

I had to pay twice using the same till and POS. I then watched as the items were manually logged (including a specific item code hand-written on the tags) in a book. I was then given till receipts and two item receipts.

Again, I remarked that the process looked quite complicated. Wasn’t there an easier way to do this? Queue eye-rolling, puffing and remarks along the lines of “tell me about it”. Apparently, a daily record of takings is made and banking done, and then once a week they tot up from the records who has sold what and the accounts are worked out from here.

Can’t your accountant help? “I think they have given up on us. We see them pretty regularly and they are always trying to help us make things better. They’re really good, it’s just us. We need to sort ourselves out”.

Shop 3

Coffee and cake time. Great place, great service and a chance to watch the world go by for 20 minutes before heading off.

It was cash only, as the card payment system was apparently up the creek. Fortunately, there was a bank next door so I pulled some money out of the wall and tucked into my order. Apparently, this was a one-off, and the system is usually pretty good. Hooked up to the iPad at the counter they had everything they needed and as most people paid by card, they were even thinking of going cashless.

When I mentioned about MTD, they thought didn’t apply to them as they were effectively a retailer. I asked if they had an accountant. Didn’t they talk them through it? Their answer? “She’s really good, and I know she spoke to us about it, but I have to confess I didn’t really take it all in”.

The coffee was great, and I sat, and I thought. 

Three shops, two hours and an incredible reminder that even the simplest of businesses and the most intelligent of business owners can find themselves in the most complex of situations, often by their own devices.

I doubt there’s much in the above account that will surprise anyone on AccountingWEB. The over-complication of systems, the not following of advice or not taking on board important information, a resolute desire to do it their way (and hell, why not, it’s their business), the focus on the day job, a lack of experience in financial administration, and on it goes. 

It also reminded me that while vendors have a challenge getting heard in a crowded market place, and training accountants take on board their systems isn’t easy, this is nothing compared to dealing with business owners and all their preferences, foibles and idiosyncrasies.

Perhaps most importantly, it hammered home to me the importance for business owners like these to have an accountant in their corner, and for them to be the person they can turn to and sort things out – even if they don’t listen.

Replies (4)

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By ireallyshouldknowthisbut
20th Sep 2019 09:10


.run out of time and hit post not save.

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By coolmanwithbeard
20th Sep 2019 10:56

Great article and sums it up so well. The digital path from start to finish is broken and whilst we have softlanding or they trade under 85k they are ok but.... i think we at least need to put a summary of advice in writing as when HMRC arrive.... Also though it's clear they dont have the information they need to really chrck their businesses.

Thanks (1)
Glenn Martin
By Glenn Martin
20th Sep 2019 12:18

Across the summer we went back to basics and won a lot of work with the types of clients you refer to.

A lot of it is down to education and knowing that there is another way. Xero + Bank Feed + Receipt will
give 85/100 of what a client needs the remaining 15% would come from the Epos linking in or using stripe etc. Most cafes seem to inherit the previous owners till when they take it over and just carry on with it, you can get an Izettle setup for £400 which is worth the money but a tough sale to get some people.

Remember there is maybe 800k clients on the cloud now, with maybe 2m that would benefit from taking that step so a lot of work still to do, instead of just chasing new tech all the time we still have a responsibility to bring the less able forward also.

Thanks (4)
Mark Telford Chartered Accountant
By Mark Telford
20th Sep 2019 13:41

Another confirmation that I made a good decision in avoiding retail B2C businesses.

Poor systems, ignore advice - generally hard work.

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