These weren't paint, but you I can smell markers too.  The second one is fuzzy (I was in a sketchy place), but was a piece worth posting.

This dude was prolific.  There was a larger piece that I saw while riding a bus that I didn't get a chance to take a photo of.

In my last posting I discussed the importance of having a Planning and Budgeting Process for your business.   Every business has this process some more formalized than others.  The following is a list of the universally accepted elements to an effective business planning and budgeting process.


Develop or revisit the mission statement for the organization and each department.  Define or revise the reasons for existence.

Develop or revisit the company vision statement.  Articulate your vision for the company and what you want to be.  An analysis of the company's strengths, weakness, opportunities and threats (SWOT) can be an effective tool for developing the company vision.

Review and update the company business model. Changes in the market place or for example new opportunities may require one to updates how you create or deliver the value that your customers want.

Update or develop a long-range or strategic plan.  Capitalize on your brand, experience, etc. to develop your strategic advantage to increase sales, margins, market share, etc.

Update or develop the overall product/service plan.  Look at your product and or service offerings and update them according to the strategic plan.

Develop the current year's operating plan.  Write-out the general budget targets that will be met during the next twelve months.

Assign specific goals and objectives with individual action plans.  Define who's responsible for each detailed and measurable action plan.

Develop the detailed operating and capital budgets.  Amount of expense and capital expenditures are detailed by cost and profit centers.

A timely and accurate reporting system should be in place to monitor the results.  An evaluation and assessment of the process should periodically be made.

The payoffs from a well-structured planning process can be significant.  Planning can insure that one has a profitable and successful business with a viable future.  It can also help with providing a clearer direction and purpose, communication, dealing with rapid change and unknowns, accountability and control.  Good luck.  I would be pleased to get input from businesses on how they implement their planning process.  Feel free to comment or contact me. Thanks.

Andrew Jordan, CPA

• From 10 October 2011 to 6 January 2012, tutors/coaches/instructors must register with HMRC to ‘notify’ that they plan to make a voluntary tax disclosure.

• By 31 March 2012 those who have registered to notify must tell HMRC what they owe and pay the tax, interest and penalties due.

I really enjoy just being able to get down and paint.  No pressure, no deadline, just mess around and see what occurs.  After spending the last couple of months painting really large works I have found switching back to these tiny little paintings really refreshing.  What waits around the corner?? 

The goanna totem of the Budawang People, traditional custodians of the beautiful lands on which we live, have provided inspiration for the 'Celebrating Bargana' project.  Initiated by local artist Meagan Jacobs, the project was a collaboration between three separate groups at Ulladulla High School - the Student Representative Council, the Gunyah Students and the Special Education Students - building a totem style sculpture which will be exhibited at RIPE Sculpture at Cupitt's Winery as well as painting banners and canvas murals,  block printing bunting and other Bargana focused activites during the festival.  (Escape Artfest Programe 2011)

Engine size	Petrol	LPG
1400cc or less	15p (15p)	11p (11p)
1401cc – 2000cc	18p (18p)	12p (13p)
Over 2000cc	26p (26p)	18p (18p)

Engine size	Diesel
1600 cc or less	12p (12p)
1601cc – 2000cc	15p (15p)
Over 2000cc	18p (18p)

• Employers do not need a dispensation to use these rates.

• Employees driving employer provided cars are not entitled to use these rates to claim tax relief if employers reimburse them at lower rates. Such claims should be based on the actual costs incurred.

• The advisory rates are not binding where an employer can demonstrate that the cost of business travel in employer provided cars is higher than the guideline mileage rates. The higher cost would need to be agreed with HMRC under a dispensation.

Obtaining a business loan has become more difficult as the economy, regulations, and lendig policies become more stringent.  I took the following notes during a recent staff training presentation and hope they will help you to understadn what lenders need to see in a business loan appllication. 


I. Understanding the Lender

It is much easier to find a business lender if you understand what a lender needs in order to process your loan application. I recommend starting with the lender you are already doing business with but check for the most recent bank policies and procedures. Government regulation and bank policies are frequently updated. To prepare you application it is helpful if you know the following:

Bank Policies –
Loan portfolio mix, number of and type of loans they like to make.
Loan Programs they use? (SBA or USDA programs?)
Loan requirements – Minimum Credit score, Loan to Value, Collateral, Equity, Lending Ratios -- Liquidity, Debt Coverage, others
Risk tolerance – some banks are more liberal, others more conservative.
Lender’s experience with customers in your industry?
Recent changes in the bank’s corporate structure that effect lending policies.
Banking regulations that affect the bank’s lending policies.
Average time to close a loan.

• Loan Underwriting – The lender will only know what you provide, incomplete applications get denied. Your loan officer will need to justify a loan approval based on due diligence review of you and your business. Information they are looking for includes:

Is the loan purpose consistent with the type of loan?

Credit Standing (score and credit report)

Cash Flow, is the business be profitable?
.... Are losses explained?
.... How were losses funded?

Collateral
.... Quality and value
.... Collateral value covers loan?

Equity/Net Worth
.... Has equity increased or decrease over last three years?
.... Amount of contributed equity and earned equity (retained earnings)

Financial ratios
.... Exceed lenders minimum target?
.... Ratio trends over last three years

Business condition – Strengths, Weaknesses, Issues

Other
.... Other business owned
.... Other sources of income
.... Personal Financial history

II. Preparing a loan package
Presenting the lender with a complete package is critical. Your package must demonstrate your capacity to manage the business, your capacity to produce stated outcomes, and the market place capacity to buy your service/product. Incomplete packages slow review and errors or misstated information will result in a denied application. Lenders will be examining:

1. Financial Statements – History
• Profit Loss Statements- YTD  Revenue, margins, profit
 • Cash Flow: EBITDA and Working Capital needs, Owner draws, distributions, When you spent cash, when you received cash

• Last three years of Tax records, Explain differences between tax records and Profit & Loss Statements. Explain any expenses made for tax purposes

• Balance Sheets – current liquidity, asset quality, leverage, capital structure, retained earnings, Aging of A/R and A/P

• Budget Projections with assumptions

• Break Even analysis

• Ratio analysis - Liquidity, leverage, performance over time has been consistent and is sustainable Sales to Assets, ROI, ROA, A/R Turnover, Average Collection period A/P turnover, average payment period Inventory Turnover, Inventory on hand

2. Management
Character of top management, resume of management experience, experience as management in this business/industry. Team depth, who does the tasks of CEO, CFO, A/R and A/P. Succession (who runs the business if you can’t be there?) Performance as compared to industry standards and trends

3. Business Plans
• Supports and explains how you will accomplish what you claim in your budget. How you meet the five C’s of credit. (Character, Capacity, Capital, Conditions, Collateral)
• Explains market opportunity
• Provides budget assumptions.
• Describe the business, how you make money
• Describe the service/product, provide pictures, marketing materials, samples
• Associated documents, Articles of Incorporation (Partnership), Leases, Contracts, firm estimates on major purchases, Collateral

III. Presentation Tips
• Be enthusiastic
• Be professional
• Be prepared
• Make an appointment, be early and ready
• Be organized and bring copies of all the document to leave with the lender

IV. Deal Breakers
Some issues in your history can be deal killers, there must be extenuating circumstances before a lender can consider proceeding with an application. Other problems could result in a loan application being considered as a higher risk. If a loan were to be approved, these issues could result in higher interest rates and more conditions and restrictions.

Preparing a quality loan application package will help identify potential deal breakers and provide you the opportunity to explain what happened and what you have done to correct the situation. Remember, it is safer for the lender to say no if there is any doubt or perception that your loan is a higher risk than the lender wants to accept.

http://www.accountingweb.co.uk/article/sa-penalties-hit-15m-more-come/519767

This is a message on the proposed changes from the President of the ICAEW (at http://www.icaew.com/)

• To extend audit exemptions for SMEs by aligning the mandatory audit thresholds with EU small company thresholds. Currently in the UK, SMEs have to meet both turnover and balance sheet thresholds to be exempt from audit. In future, to be classified as small for accounting purposes, businesses will have to meet two out of three criteria (turnover, balance sheet and headcount).
• To exempt subsidiary companies from the statutory audit where they fulfil a rigorous set of conditions including a commitment from the parent company to guarantee its debts.

Great guidance from Peninsula

Auto enrolment 12 month reminder

As part of the government’s plans for pension reform, employers must automatically enrol their workers into a pension scheme. The largest employers, in terms of the number of workers they have, and in some cases, by PAYE reference, will have to comply first, with a ‘staging date’ of 1st October 2012. The ‘staging date’ is the date from which an employer must start to auto enrol their workers into a scheme. To find out when your staging date is, click  here.

From the relevant staging date, all workers must be auto enrolled into a qualifying pension scheme by their employer. Employers can choose which scheme they use but it must meet minimum standards in respect of the benefits it provides or the amount of contributions paid to it.

Employers must therefore:

• make a minimum 3% contribution is made towards a defined contribution scheme (based on qualifying pensionable earnings) such as NEST (see below); or
• offer membership of a defined benefit scheme or certain hybrid scheme which either has a contracting out statement or meets the test scheme standard

One qualifying scheme that has been set up specifically for an employer to use so that he meets his new obligations is called NEST (National Employment Savings Trust) and is available to any employer who wants to use it. However, use of this is not compulsory, as long as the pension scheme used counts as a ‘qualifying’ one.

Employers who currently use a pension scheme should therefore check that it counts as a qualifying scheme. If it does, then they can continue to use it under the pension reform. If it isn’t, then they should check how the existing scheme can be amended, or set up a new scheme.

Not all workers must be auto enrolled – only ‘eligible’ workers must be. ‘Eligible’ workers are those who:

• are 22 years old and over
• are under state pension age
• earn more than the minimum earnings threshold (likely to be £7475 per year); and
• work or ordinarily work in the UK

However, other individuals will have the right to be enrolled into their employer’s pension scheme if they ask to be. These are:

• jobholders aged between 16 and 22, or between State Pension Age and 75 with earnings of more than £7,475 a year.  If these individuals ask to be enrolled their employer will have to make a minimum contribution.
• workers aged at least 16 but who are under 75 and who do not have earnings of more than £7,475.  If these individuals ask to be enrolled their employer will not have to make a minimum contribution, but it can if it chooses.

Once a worker has been automatically enrolled, they can choose to opt out in which case they will no longer be a member of the scheme and any payments made into the pension pot will be refunded. Opting out can only be done within a month of being auto enrolled. Opted out workers may re-join at a later date.

After the opt-out period, workers can choose to leave the pension scheme at any time. Payments already made in this circumstance will not be refunded and will remain in their pension pot.

Workers who have opted out or left the scheme must be auto enrolled again ever three years as long as they continue to be an ‘eligible’ worker.

Who should be automatically enrolled?
Fiona
Fiona is aged 27 and earns £37,000 per year.

Fiona’s employer is required to automatically enrol her because of her age and her earnings level. Her employer must make at least the minimum contribution.

Raj
Raj is 20 and earns £17,000 per year.

His employer is not required to auto enrol him because he is not old enough. However, Raj can ask his employer to put him into the workplace pension scheme and will have to make a contribution to his pension.

Peter
Peter is 42 and earns £25 a week.

Peter’s employer is not required to automatically enrol him because he doesn’t earn enough.
However, Peter can ask to be enrolled but his employer does not have to make contributions, but can do so if they wish

This is good advice for what can be a difficult area.

http://www.peninsula-uk.com/bottomlineexpress/457/Directors-Cut:.html

http://www.peninsula-uk.com/blog/blogentries/43/Are-Proposed-New-Employment-Tribunal-Reforms-Going-To-Be-Good-For-Business?.html

These are some thought provoking comments on the new employment tribunal rules

Interesting update on IR35

http://www.ion.icaew.com/TaxFaculty/23116

From the ICAEW:

According to figures obtained by Hacker Young, during the 18 months to 31 October 2010 the VAT Internal Review Team considered almost 29,000 appeals against penalties imposed by HMRC for incorrect returns and late payments. In just over 50% of these appeals, the penalties were cancelled because they had been wrongly imposed. In most cases the penalties were cancelled because the mistakes made by businesses were not as a result of carelessness but rather a genuine mistake.

If that weren't bad enough, the penalties were overturned by HMRC's review team who are hardly likely to be independent!

Courtesy of RBS Group Economic Research

The Governor of the Bank of England is hoping that increasing monetary stimulus will help steer the economy into calmer waters. By injecting more funds into the UK economy, and quickly, Mr King aims to counteract some of the drags on growth coming from weaker global activity and worries about banking and sovereign debt conditions in the Eurozone. Meanwhile, his European Central Bank (ECB) counterpart, Jean Claude Trichet, also took action to increase liquidity in the Eurozone banking system in an attempt to promote some stability. But overall, there is little prospect of a strong recovery. Choppy times lie ahead.

If I could translate profile page loads into roses, dates and confidence she would love me too.

I was about to trip over a gutter so I looked up from my phone, because I was forced to, and onto the footpath/sidewalk/concrete.

I saw two stencils, the one above by Fukt. It depicts a bum resting at home -beside a supermarket trolley in the street.

The phrase 'Best We Forget' is a play on the ANZAC phrase 'Lest We Forget', i.e. it's how we remember the Australian and NZ men and women who fought in the wars.

Fukt is Australia's equivalent of Banksy in terms of style. I would go so far as to say he is Banksy's equivalent of Banksy.

And I saw this too. I'm still unsure who did this or what it means. I see a boy, a boy looking up at me (you're such a bad father) with a firecracker/Red Bull/light saber.

I'm not immediately alarmed, possibly because homeless people are a more visible pollution, but I know this kid is in trouble.

Wait - is this kid me?

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Fukt: Iwo Jima McDonald's Stencil

From Accounting Web