Increasing earning power for oil and gas contractors
The decision to become a self-employed professional is a big step to make for anyone in his or her career. It’s fair to say the benefit of working in business for yourself brings with it a different type of lifestyle, compared to that of being a full-time employee. Contractors are able to take on projects that fit with the work-life balance they want to achieve and can manage their time accordingly.
For many, being able to get on with the job in hand without being restricted by administration and spending large amounts of time filling in spreadsheets, expenses and tax returns is essential; contractors want to feel they can trust an accountant to be a helpful partner.
Contractors are a fundamental part of the oil and gas sector and they need to feel aspects of their finances such as tax deadlines, expenses, timesheets and cash flow forecasts are in safe hands, allowing them to get on with their work. If a contractor was to use an accountant to manage their finances, it’s understandable that they just want to feel assured their finances are in order and that their accountant has their best interests at heart.
But should contractors be expecting more from their accountants? Could a more proactive approach to business finances mean contractors can make better, financially sound decisions and improve their earning power?
In the current climate, contractors need to raise their expectations of accountants and demand more proactivity when it comes to managing business accounts to ensure they are on top of their finances, work tax efficiently and make the most of their earning power. And we at Brookson are not the only ones to think so.
Government backs better management of finances
Last year the Business Secretary, RT Honourable Vince Cable, backed the introduction of monthly management accounts for small businesses. He stated this would not only improve the delivery of financial information, but also ultimately drive economic growth.
You may think Mr Cable’s view does not affect contractors as the announcement was largely aimed towards SMEs, but you would be wrong. It’s vital we apply this theory to contractors and how they manage their own finances.
Contractors play a huge contribution to UK plc’s and they need to be given a platform in which to work resourcefully, which will come with having a better grasp on their finances and spending less time on administration.A new era of accounting
With more than 15 years’ experience in the sector, we were more than aware of the issues facing oil and gas contractors when it comes to managing all aspects of their business. One of our main concerns for contractors is ensuring they meet their tax deadlines and have the required funds in their bank account to do so. Have I paid the taxman? Did I submit that expense? How much can I take out today while still leaving enough in my account?
Over the past two years we have developed a new service for customers, giving them an instant snapshot of their business finances. The service, Brookson Connect, gives users information on their financial situation, which is updated daily*, on areas such as profit, cash, personal tax position and turnover.
Using technology developed specifically for the needs of our customers (not for an accountant), they can see how much they can safely take out of the business – a so called ‘one number’ will display an amount you can take out that day. This number will have taken into account all up-to-date expenditures including tax liabilities.
Through daily task reminders the user will see what tax deadlines are pending and will be able to act accordingly. And if they don’t, one of a number of specialists at Brookson will alert them to this, completely removing any chance of missing a payment to HMRC.
The service can be as detailed or as simple as required. A more analytical customer may want to delve into financial reporting while others will just want to see top line information, such as how much is available to take out of their business on that day or when an expenses payment will go into their account.
In response to the typical lifestyle of a contractor, we’ve also enabled the service to work on the go. Its functionality allows users to capture and upload receipts via smartphones or tablets, which will appear online straight away. They can also log and manage receipts as well as raise invoices instantly.
The major component of this new service is the ability for users to see, at a glance, a complete overview of their business at that moment in time. By arming customers with this information we hope to see improvements both on a short-term and long-term basis, particularly when it comes to tax planning. Allowing our customers to see such simple things such as when the next tax deadline is and how much they currently have in the business will mean they can go on to make financially sound decisions and potentially increase their earning power.A better financial picture
Working with contractors and using better technology to allow them to become more in tune with their financial situation will undoubtedly result in an improved outlook for the flexible workforce as a whole.
Self-employed professionals, especially contractors, have an important part to play towards kick-starting economic recovery. The flexibility they can provide to end-clients is unrivalled by any other type of worker but they must be given the freedom to earn by removing the uncertainty around their financial stability.
An annual visit to the accountant no longer satisfies the need we now all have when it comes to the way we receive information. The digital age has brought with it a hunger for information to be constantly drip fed to us, whether that is through social media or news sites. Why should having access to our financial information be any different?
Brookson Connect is the UK’s first ever daily accounting system for contractors, delivering up-to-date information and providing them with an overall picture of their finances to help plan for the future accordingly. We hope to provide contractors with the necessary tools in which to make good financial decisions and leave the yearly frantic rush of pulling together 12 months’ worth of information a thing of the past.
Let’s face it; if we all knew exactly how much we had to play around with each month, we’d definitely be better off, both financially and mentally.Brookson
Martin Hesketh is managing director of Brookson, an accountancy firm representing contractors working in the oil and gas sector. With more than 15 years of experience, Brookson prides itself on the strength of its team and the expertise that lies at the heart of its success.
For further information please visit: www.brookson.co.uk