Category: Running a business articles

Health and safety has always been an important consideration for employers. Workplace health and safety laws can be strict and failure to comply could have devastating consequences, personally as well as professionally.

But according to some experts, today’s “compensation culture” means compliance with health and safety legislation is more vital than ever and anyone hiring other people to work for them needs to be fully aware of their rights and responsibilities.

Laying the blame

Employers have legal obligations to ensure a safe and healthy workplace and if an accident does occur at work, an employee has every right to question how and why. If they have hurt or injured themselves as a result of something their employer has or has not done, or something they have not provided, they can seek redress.

But Stephen Leigh, an advisor at Real Compensation, believes that today legal action is being taken for “ridiculous, small things that an employee could not envisage happening”.

He points out: “An increasing amount of organisations are more aware that if something happens then their employees are going to be putting in a claim.”

With this in mind, having a sound knowledge of health and safety law and doing everything possible to act in accordance with them is absolutely essential if employers want to avoid litigation.

Legal battles

Research from the insurance firm RSA reveals that almost 12 million people have been injured at work or suffered work-related health problems in the last year. Over half of these people sued their employer.

The most common problems experienced by workers were back pain and stress, which accounted for half of all illness and injury cases.

Colin Bradbury, underwriting director at RSA, said: “This highlights the importance of risk management in safeguarding employees’ health and ensuring a productive workplace.”

According to Stephen Leigh, it is possible that some employers underestimated the risk of being sued by their workers, perhaps because they do not have a full understanding of what is required of them or of the rights of their employees.

Preventative action

Mr Leigh insists employers must do “absolutely everything in their power” to comply with health and safety laws and to ensure that their staff comply as well, because employees also have responsibilities in terms of following the health and safety guidelines and procedures put in place by their employer for their benefit.

“It’s basically just complying to the health and safety regulations and ensuring that they are doing everything they can to avoid negligence. It’s just the case across the board really,” he states.

Training staff is essential, especially where they are required to handle potentially dangerous equipment, as employers can be held responsible if an accident happens as a result of failure to provide adequate instruction to mitigate risk, he adds.

Employment law can be a minefield, but taking the time to get to grips with it could save time, money and distress for otherwise attentive employers who want to do the best they can for their business and their staff.

Related articles

You can have the most fantastic business with a wonderful product that people are desperate to buy, but if you fail to get the financial side of things right you are doomed to fail.

That is a simple fact of business, with those who struggle to get their heads around the numbers often among the first to hit the rocks.

Running a tight ship is the key to enjoying a profitable existence, meaning you must keep a close eye on exactly what is going out and into a business.

With this in mind, balance sheets are likely to be your friend, as they give you the opportunity to identify exactly where your strengths and weaknesses lie.

Of course, it’s not just about being able to read and understand a balance sheet, it’s also important that you are able to enter the correct information on the document in the first place.

This will ensure that any statistics, data and trends you identify as being particularly crucial are reliable and accurate.

What is a balance sheet?

A balance sheet is a record of exactly what a business has in assets and what it owes to others.

Everything from stock and equipment to supplier debts should be included to give an overall picture of the state of a firm.

The balance sheet also reveals exactly what an organisation’s cash to debt ratio is – something that is known to be of huge importance, particularly in these difficult economic times.

If a firm is becoming too reliant on credit, the balance sheet should identify this is the case.

Why do I need one?

As well as being able to keep your finger on the pulse of operations, the balance sheet is a useful exhibit for you to showcase when it comes to trying for a bank loan or attempting to attract new investors.

A positive and concise balance sheet should make it much easier for people to pump money into your company.

With all this in mind, what you need to make sure you can do above all else is understand your sheet.

How do I understand a balance sheet?

It tends to be broken down into numerous columns, with these representing factors such as cash reserves, fixed assets, borrowings and debts to be call in.

You can even prioritise certain columns if this makes it easier to evaluate.

Handily, it should give an indicator of whether it would be easy to turn certain assets into cash, i.e. the rate of liquidity a company is operating under.

Again, this is a key issue when it comes to assessing the overall financial health of a business and where it stands at a particular moment in its development.

If you understand the balance sheet comprehensively, you will find it much easier to manage your firm and make the changes that are needed to ensure success.

For instance, you could decide to sell assets if you need to raise cash, while you might forecast that you will eventually end up with too many long-term creditors and subsequently look to ensure some pay up in a shorter time frame.

Expert advice

Written by a chartered accountant, Lawpack’s guide Understanding Accounts Made Easy shows you how to break down a Balance Sheet in a way that is easy to understand, plus it includes an example on how to create one.

Related articles

• Profit and loss forecasts: How to understand them
• The secrets of creative accounting
• Self-employment: how to keep proper accounts

 

Published on: August 30, 2012

It is essential for companies to seek business advice if they find themselves in financial difficulty, Frances Coulson, president of insolvency trade body R3 has emphasised.

She explained that burying heads in the sand is not an option when the future of a business is at stake.

“The first stages of recovery are the most difficult time for businesses; it takes time before a return to growth translates into tangible relief for business owners,” she highlighted.

Ms Coulson pointed out that as soon as there are signs of growth, creditors often become more aggressive in their pursuit of anyone who owes them money.

Last month, R3 revealed that a record number of individuals are currently in financial distress, with eight million individuals expected to go into their overdraft.

Two million expect to end up in an unauthorised overdraft position, while five million have concerns over the security of their job.

• Running a Business News from Lawpack: Get expert advice on the practicalities of setting up a business with Lawpack’s Running Your Own Business Guide

 

Published on: July 28, 2011

Employers running a business wanting to make their employees more engaged have been offered business advice by one expert, who suggested ways of making people more inspired to work.

Ashley Ward, director at European Leaders, highlighted that offering workers free pizza and cans of Coke is not the right way to go about things.

Instead he emphasised that employees need to feel a part of a wider strategy and involved in what a company is trying to do.

“What that releases in your workforce is a level of energy and diligence, which is very different from the fear-driven command-and-control type of structure,” Mr Ward commented.

He pointed out that all the companies who are considered good to work for take this sort of approach, so other firms are therefore encouraged to follow suit.

Almost 6.5 million (23 per cent) of UK employees are looking to change employer in the next year, findings from the GfK International Employee Engagement Study show.

• Running a Business News from Lawpack: Get expert advice on the practicalities of setting up a business with Lawpack’s Running Your Own Business Guide

Published on: July 8, 2011

Thinking of going self-employed? Want to work from home? Hugh Williams, author of our guide Working from Home, is a self-employed accountant who works from home.

Here are his tips on what you need to do when setting up your home office.

Working from Home Tip #1: Mortgage

If you’re a homeowner with a mortgage, check with your lender that there is nothing in your mortgage agreement that prevents you from working from home; there may be some regulations you need to meet; likewise if you’re a tenant.

It’s possible that your mortgage lender may prevent you from working from home, say if you’re developing a business that radically affects the approach to, the look of or use of your home.

Indeed, if your home-based business increases the risk of damage to your home, such as a greater risk of fire, this may also impinge on the mortgage agreement. So, check all the legal documents relating to the mortgage.

Working from Home Tip #2: Household insurance

Check your household insurance. Are there any clauses relating to working from home? Do you need to increase your cover for business equipment or stock? If you intend to have customers visiting your home office, there are health and safety considerations.

As you work from home, your insurers may require an additional premium on your current insurance and they may ask you to make changes to your home for safety reasons.

Working from Home Tip #3: Risk assessment

Even if you’re self-employed, working from home and with no employees, you’re still affected by health and safety regulations. For the most part, health and safety regulations are common sense because it has to be a good idea when working from home for you to work in a safe environment, both for your benefit and for those who live in the same building. Also, showing that your business has sound health and safety procedures may assist you in getting competitive insurance premiums.

Health and safety law requires you to protect the health, safety and welfare of others, whether they are employees or not. This may include visitors to your home, as well as other people in your household who may be affected.

To comply with health and safety regulations when working from home, carry out a risk assessment to identify hazards and assess risks. Doing a risk assessment is a straightforward practice and you can get full guidance with Lawpack’s Risk Assessment Kit or from our book Health & Safety at Work – the Essentials, which tells you how to assess your home office for health and safety issues.

Working from Home Tip #4: Planning permission

Another factor that you may have to consider is one of planning permission. If working from home affects your neighbours or the residential area (e.g. your home office will create noise, a number of visitors and increased traffic, or you need extra parking spaces), then you need to discuss this with your local authority.

You may need to apply for planning permission from your local council if your home-based business changes the use of a building. The general rule is that if you are using less than half your home as office space, you don’t need to apply for planning permission, but if what you do is noisy or somehow adversely affects your neighbours (e.g. your activity creates pollution or makes parking difficult for them), then no matter how small the business is, you will almost certainly need permission to carry it out.

Working from Home Tip #5: Dedicated space

When working from home it’s really important to keep your business life separate from your home life. Arrange for a dedicated area where you can work from home; a spare bedroom is ideal as a home office. Avoid working from the kitchen table or dining room. If you have to share your workspace with your family, ensure that at the end of the day your work activities are filed away, out of sight.

Working from Home Tip #6: Separate telephone line

Install a business telephone line in your home office. Firstly, it enables you to keep business calls separate from personal calls and therefore makes it easier for you to claim tax relief on business telephone costs. Secondly, it avoids any younger members of the family using the phone during the business day.

More tips on raising finance, making a business plan, keeping accounts and saving tax can be found in our book Working from Home. Plus you can access an expert Guidance Manual outlining how you can find home-based work or convince your boss to work from home with our Working from Home Starter Kit, which includes various working from home forms, including a Health and Safety Checklist.

Related Links:

• Top tips on what you need to successfully work from home
• 5 reasons why home working is good for business

Related Products:

• Working from Home Guide
• Working from Home Starter Kit

Published on: January 11, 2011

by Sarah Ashcroft

Failure to excel in health and safety in the workplace has the potential to land a company in trouble, so it should remain a priority for every boss in the country.

Health and safety law

The Health and Safety at Work etc. Act 1974 is the main piece of legislation in the UK that covers the subject and any business that fails to adhere to its rules and regulations can find themselves facing prosecution and substantial penalties.

Fire safety

All manner of issues are covered within the legislation, such as fire safety. Any person who is an employer or property owner has a responsibility to meet certain fire regulations, which means carrying out thorough assessments on a regular basis.

Emergencies

Bosses must also tell staff about the risks they have identified and put measures in place to deal with them. Planning for an emergency is key, as one could occur at any time and being able to overcome any threat is a must.

Heavy machinery

Agriculture is one of the areas in which many accidents occur, but any company that operates heavy machinery can, in fact, be in danger, so following the government’s guidelines is a must.

Carrying out risk assessments and setting standards that must be reached by staff at all times is a good starting point, while completing regular inspections of machinery will also help to keep it in working order.

Workplace temperature

It’s not all about serious injuries and potentially disastrous occurrences though, as even fairly basic issues are covered by legislation and the government demands that these are followed.

For example, employers should make sure that their workplace is of the correct temperature for employees, with a minimum of 16 degrees C (or 13 degrees C where manual work is being completed) advised.

Noise

On a similar level, noise at work levels must also be controlled so that employees are not forced to operate in conditions that could damage their hearing in the long run.

A general duty of care exists at all times so employers must always be thinking about how they could be reasonably expected to protect their workforce, explains the Royal Society for the Prevention of Accidents.

Risks

Tackling risks at their source should also be a key consideration. Rather than reacting to an accident – which could land a company in trouble if it hasn’t acted upon health and safety requirements placed on it – the smartest and most considerate organisations will detect potential problems long before they manifest themselves and take adequate precautions.

Training

While plenty of attention is sure to be placed on putting measures in place that can prevent accidents and injuries, it’s wise to invest in training and supervision as these can have a similar effect.

Co-operation

Companies should promote a feeling of cooperation between staff. After all, people working well together and acting to keep each other safe can help to ensure that this is a reality.

Hazardous materials

Another area to watch out for is hazardous materials, and any company that works with these – whether it’s dust, fumes, radiation or toxic substances – should make sure that they are controlled at all times.

More information

For more information on the health and safety requirements employers must comply with, read Lawpack’s Health and Safety at Work Essentials. Written by an expert in the law, it’s the one-stop guide for all you need to know.

External links

• Health and Safety Executive

Published on: January 23, 2014

If you’re to run a successful business that works in an efficient manner, it’s likely that very soon into your venture you will need to work out how to use profit and loss accounts. And if you’re to understand them, first you will need to know exactly what they are.

What is a profit and loss account?

Profit and loss accounts and forecasts are documents that record exactly how much money a business receives and pays out over a fixed period, usually a year. It will show your total income from sales as well as any other cash generators you may have had, while every cost from wages to materials and rent will be displayed.

The documents are not particularly complex, so there is no reason why you shouldn’t be able to get your head around it fairly quickly. A good way to start might be by familiarising yourself with all of the columns that appear on a profit and loss account and what they stand for.

After an initial income figure, you will probably see a net income statistic. This is the amount of revenue after various allowances have been taken into consideration. It’s followed by gross profit, depicting the amount of money you have to your name once direct operating costs have been calculated, and is followed by an operating profit figure.

Finally, you will need to pay tax on any profit you make, so a figure before this is usually given and then a final total, also known as net profit, is recorded.

The bottom line shows you exactly whether you have made any money or not and the extent of your profit or loss. It’s an essential record and one that will help you to make profit or loss forecasts for the months and years to come. This information is invaluable, particularly if you need to convince a bank or investor to back your project.

It will also come in particularly handy when you file your tax returns, as HM Revenue & Customs does not take kindly to businesses that cannot work out their own financial results. Similarly, shareholders will be interested in the data and can be appeased by fair and accurate records.

Do all businesses have to produce formal profit and loss accounts?

If your business is a limited company or a partnership whose members are limited companies, then by law you must produce a profit and loss account for each financial year.

Self-employed sole traders and most partnerships don’t need to create a formal profit and loss account, but they do need to keep adequate records to complete their self-assessment tax return fully and accurately.

However, there are key benefits to producing formal accounts. If you’re looking to grow your business, or need a loan or mortgage, for example, most institutions will ask to see three years’ accounts.

The benefits of understanding your accounts

The benefits of tackling this subject head on and gaining an excellent working understanding of it are clear. It seems fair to suggest that some businesses even go to the wall because their bosses don’t run the financial side effectively, so don’t become one of the statistics and do all you can to keep your finger on the pulse.

If you would like to get to grip with the financial side of your business – and you should, as a greater understanding of your status will help you to operate more effectively and identify potential cash leaks – it could be worth reading up on the subject.

We offer an excellent book entitled Understanding Accounts Made Easy that will offer you all the information you need to learn and run your profit and loss records adequately.