Figurate!

On a more personal note - the name of my own company is now Figurate Ltd.

The legal name change at Companies House was quite straightforward.  It took a little more time to communicate the change to my clients and bank.  However, what will take the longest is changing all the directory/advertising entries that had been set up under the old name.  The moral of my experience - choose your business name wisely the first time around.

Other Things To Do when Renaming your Company

People to tell: 

• Your customers
• Your employees
•  Your suppliers
• Your bank
• HMRC (the tax man)
• Professional bodies/trade associations

 Other things to do:

• maximise the marketing opportunity
• change your business stationery
• obtain a new domain name and relaunch your website.
• update all your advertisements

Change of Company Name by Written Resolution

The other method of changing the name of a limited company is by written resolution.

This is a resolution passed unanimously by the members (shareholders) of a company.  All the members are then required to sign and date the document.

A Change of Name by Written Resolution form (NC20) is also available for download at the Companies House website.

Change of Company Name by Special Resolution

There are two ways of changing the name of a limited company, the first of these is by Special Resolution.

This is a resolution that must be passed at a general meeting of the company with a majority of 75%.  An ordinary resolution only requres a 51% majority.

A Change of Name by Special Resolution form (NC19) is available for download at the Companies House website.

Renaming Your Company

It’s always best to chose a good name for your business at the outset , but in case you hadn’t, it is possible to change the name of a limited company after it’s registered.

You must first check to make sure that the new name you have chosen is available.  This can be done online using Comapnies House WebCHeck service.  This service is available from Monday to Saturday 7.00am to 12 Midnight (UK time)

There is a fee of £10 (at the time of writing), which must be paid to Companies House before the name change is effected.

The process takes about 5 working days from the receipt of the request at Companies House.  Alternatively, there is a same day service for £50, which may be worth considering if time is particularly critical.

On the change of name, a new certification of incorporation will also be issued.

Working From Home and Time Management

I know it’s a cliche but  time management is even more important when working from home  to avoid an unproductive merging of work/home/family.  Here are just a few blogs on work/time management sites:

Time Management at Home

A Matter of Time

Mark Forster

 Pick the Business

Goods Written Off or Goods Written Down

Sometimes, goods might be unsaleable for one of the following reasons:

• the goods might be lost or stolen
• the goods might be damaged, and therefore worthless
• the goods might become obsolete

When goods are lost, stolen or disposed of, the business will make a loss on them, because they will have zero sales value.

Similarly, if goods become obsolete and have to be sold at a reduced price, the business might make a loss, if the clearance sale value was less than the original purchase price.

As I mentioned, when I blogged about the prudence concept goods which have bcome worthless or worth less than their original cost, whould be written down to:

• nothing if they are worthless/disposed of
• their “net realisable value”, eg, their clearance sale price, if they are to be sold off at less than their original cost.

Carriage

Carriage is the cost of transporting goods from the supplier to the business which has purchased them.  Sometimes the supplier pays and sometimes the buyer pays.

If the supplier pays, the cost to the supplier is called “carriage outwards” and if the buyer pays, the cost to the buyer is called “carriage inwards”.

Carriage inwards is usually added to the cost of purchases and is therefore included in the trading account by default.

Carriage outwards is a selling and distribution expense in the profit and loss account.

Cost of Goods Sold

The cost of goods sold is calculated as follows:

                                                                                                       £ 
Opening stock value                                                                  X
Add cost of purchases (or production, if manufacturing)    X
Less closing stock value                                                         (X)
Equals cost of goods sold                                                         X

 That is, to match sales and the cost of goods sold, you need to adjust the cost of goods sold, to allow for increases or decreases in stock levels.

Unsold Goods at the end of an Accounting Period

Goods may be unsold at the end of an accounting period and therefore, still be in stock.  The purchase cost of these goods should therefore NOT be included in the cost of sales of the period.

For example, suppose Widgets & Co (who have no stock at the start of the year) purchase 40,000 widgets for £20,000 and sold 30,000 of them for £2.  Total sales for the year are therefore 30,000 x £2 = £60,000.  At the end of the year, there are 10,000 unsold widgets in stock, valued at £0.50 each.

Widgets & Co have purchased 40,000 widgets, but only sold 30,000.  Purchase costs of £20,000 and sales of £60,000 do not relate to the same quanitity of widgets (goods).

The gross profit for the year should be calculated by “matching” sales to the cost of those widgets that have been sold.  Therefore, the gross profit is:

Sales (30,000 x £2)                                                         £60,000
Purchases (40,000 x £0.50)                     £20,000
Less closing stock (10,000 x £0.50)           £5,000
Cost of Sales (30,000 widgets)                                        £15,000
Gross Profit (£60,000 - £15,000)                                 £45,000

Therefore only the purchase cost of the widgets that have been sold are actually taken into account in calculating the cost of sales and therefore, the gross profit for the period.

The cost of the unsold widgets are shown in the balance sheet.

Choosing an Accounts Package

I’ve recently been in the position of choosing accounting software, so this has been forefront of my mind.  This is a (by no means exhaustive) list of things to consider (in no particular order). 

• price
• functionality
• ease of use/user friendliness
• accounting knowledge
• upgradeability
• upgrade cost
• ongoing support costs
• flexibility
• does it meet your legal obligations

Duties of a Sales Ledger Clerk

Some of the duties may be carried out by the Credit Controller, rather than the Sales Ledger clerk, if the company is big enough to have this segregation.  Again, this is only a generic description and some duties may not apply or may have been omitted. 

• Match dispatch notes to customer orders
• Produce sales invoices
• Allocate customer payments to the correct invoices
• Prepare bankings
• Produce Aged Debt Report
• Send out Customer Statements (either to all customers or just those with overdue accounts)
• Write off bad debts