Our view on the UK economy

As Coronavirus quarantine in the UK continues, we outline what we think the mid-term impact will be, as well as the trading conditions after the restrictions have eased.

The biggest threat to global economic stability is what is happening in the US. Bank of America recently released their analysis giving a likely scenario of 10% GDP contraction over 3 quarters with 47 million unemployed workers. At present they do not have anything like the Coronavirus Job Retention Scheme. The UK Office for Budget responsibility predicted a 35% contraction and 2 million unemployed. Considering the US picture this is very good and by having an economy in comparatively better shape with a high percentage of companies surviving means that the UK has an opportunity to gain a little bit of market share at home and abroad. Whether you are competing with an American PR firm or an international competitor in the same foreign market, the government has set up these schemes to make sure you can take advantage of the downturn.

Some of you may have read economics at university but a very simple concept is that there is a perfect, inverse relationship between the unemployment rate and growth. As the economy grows, unemployment goes down, as the economy contracts, unemployment goes up. A 35% contraction is a much bigger drop proportionally than the rising unemployment rate. This means that the Government’s policy decision has been about making sure they keep as many people as possible in employment by keeping as many businesses afloat as possible.

For the UK government these are the numbers that count, because this means more businesses will have some cash (via grants) to take advantage of new opportunities and employees, furloughed or not, will still be able to go out in the summer and spend some money (albeit a bit less).

If you work in retail, take advantage when the lockdown is lifted. People will want to meet up for a coffee, food or a drink to socialise again. We all might have awful hair that needs a proper seeing to by a local hairdresser and some of us will want to hit the gym and maybe get our beach bods ready for what is left of the summer.

Assess your own market, your competitors and look at new markets if that is relevant and achievable.

Survival and getting on with things: stories from the Mushroom Community

Here’s how some of our clients have been approaching the lockdown…

Michael Harley: Redplug

UK’s leading Rockwool Approved Blown Insulation Installer



“In the current Covid 19 crisis we have tried to take a calm, practical approach. We have looked at guidance from the government information for the construction industry. As a small business we have adjusted our operation accordingly with the government advice to be able to keep our employees safe and keep the business running.

Our customers have been understanding throughout this and hopefully we can continue once the restrictions have been lifted.”

Business as usualish...

John Higginson: Higginson Strategy

Award-winning communications agency

“We are a purpose-led consultancy based in London and Manchester. We support a range of companies, charities and public bodies, helping them to explain their purpose, getting them media coverage and opinion pieces in national publications. We also have a podcast that looks beyond the headline called Behind the Story.

Prior to Covid-19 we had two offices so we were already good at working remotely. Once the virus hit we immediately started working from home – luckily we don’t make physical products so this was achievable with minimal disruption.

As a result, the operational challenge we have faced has been not so much on the technical side, but more on keeping people motivated whilst they’re apart. Like many we very quickly became video conferencing masters and have conducted much of our business through this medium.

The other key affect on business is the fear of a recession. Being a consultancy is it (fortunately) easier for people to put our contracts on hold than get rid of us completely. The fact that our clients have been able to furlough non-income-generating staff has also worked in our favour as in some cases it has freed cash for them to continue to engage us. As an outside agency we’re also very productive (we have to be to prove our value compared to in-house resources) which is a useful thing for our clients at the moment.

So after an initial drop-off in clients, we now appear to be winning business. Among those signing up have been a number who are wanting to support the NHS or government in some way, such as through the provision of ventilators or Personal Protective Equipment (PPE). Higginson Strategy has benefitted here due to our access to these channels and our specialism in communicating the right messages about people doing good. Providing they are presented authentically – and not just for commercial gain – these kinds of messages help the bottom line for our clients as people in general want to do business with organisations they believe are doing good.

Overall we have been fortunate that our business model has proven resilient to the pandemic so far and, while we are obviously looking forward to returning to normality along with everyone else, we are pleased to have maximised the opportunities identified along the way.”

Planning for the post lockdown haircutting spree

Ross Chaplain: Lykke and Hygge

Specialist Hair Professionals in Evesham

“Covid-19 was tough for us to begin with. With closing completely, we have had to be really careful to minimise our costs. Having recently taken on a new member of staff this was especially challenging, and, whist we were able to furlough most people, our new-starter was not eligible so we have had to find an alternative way of protecting what income we can for her by paying her a training wage.

We have since received a small business grant, which has eased our cashflow, and we’re waiting for the outcome of our CBILS (Coronavirus Business Interruption Loan Scheme) application which should help us through the next month or so.

When business gets going again we’re confident the demand will be there. We’re preparing to work differently, with PPE and potentially taking on some new assistants to help maintain distancing between each stylist team.

Our staff are really keen to get going again and we’ll be offering them extra working hours where needed to help meet the new demand. All are welcome down for their first post-lockdown haircut!”

Mushroom’s call to UK Businesses

Mushroom’s call to UK businesses: What can you do to help?

Across the country, caring volunteers are coming to the aid of the isolated and vulnerable members of their local communities, providing them with much needed support and engagement at a time when the consequences of loneliness, a shortage of supplies or an inability to get to a local shop for groceries or medication can be severe.

Local voluntary groups, many under the Covid-19 Mutual Aid UK banner, have gathered small armies of altruistic people with the ability and willingness to help those most in need. We have witnessed first-hand the effort and passion with which people have jumped-to, helping their neighbours with grocery deliveries, medicine runs or just being on the end of the phone to cheer them up with a chat.

It has been a concentrated movement with the power to restore any faith we might have lost in humanity.

Just as one example, a community group in Somerset received a call from a 92 year-old lady who had been without food for 2 days. Thanks to their group, groceries were bought and delivered to her immediately and they are ensuring she is provided with a hot meal every night.

We’re doing what we can, but we need your help too.

Since mid-March, Mushroom has committed time and money to help more than 70 Mutual Aid and voluntary organisations across the country setup new phone numbers with their local area code, linked through to a grouping of phone extensions that enable local volunteers to receive multiple inbound calls at once from their communities via an app on their phones, so they can be there to provide much needed support.

Our telephony provider Gradwell has pledged their backing for the initiative by providing the new phone-lines to Mushroom at heavily discounted monthly rates. If you’re part of a voluntary group or know one in need of this support, let them know that they can register here.

Mushroom is now calling on the UK business community at large to come forward and be counted during this unprecedented time of crisis.

Whether by donating time, money or specialist knowledge and skills, we want to hear what your company can do to help.

We’re compiling a directory of businesses and their available offerings to share with voluntary groups UK-wide – to play your part, sign-up here.

Helping you to help others

Mushroom is also offering dedicated business support for our UK SME clients during the Covid-19 pandemic, including the preparation of individual survival “battle plans”. Find out more here.

Our own business is far from immune from the effects of the current crisis, but with a company group that originated during the 2008 recession, we know from experience that the way we all survive is by coming together and making the very best of our new reality. 

What help is needed?

Every business will be able to bring its own value and creativity to this. As food for thought, here are some needs we have been informed of directly by leaders of some of the groups:

– Containers for doorstep deliveries/drop offs, such as cardboard boxes, crates or similar

– Mobile phones/SIM cards for volunteers to use to contact local residents the provision of lanyards for ID badges

– A way of liaising with local supermarkets to agree better arrangements for volunteers to shop on behalf of the elderly and vulnerable (such as access during the first hour of the day and the ability to buy more in bulk)

– Safe methods of transportation to/from hospital

– A simple method of determining which local shops are open/closed

– Antibacterial gels/equivalent to help sterilise deliveries and protect the isolated from infection

Join us and help us make the journey one to be proud of.

4 Ts of Risk Management

Risks are the probabilities of bad things happening. In short, the uncertainty surrounding your objectives.

When managing risks, you need to set out Control Statements i.e. what you are going to do to minimise the likelihood of an adverse incident occurring and – if it does – minimising its impact. A clear understanding of your risks and achievable Control Statements is often a major competitive advantage for any company. To do this you need to understand the different types of risk management options you have available.  There are really only 4 types – the 4 Ts.

  • Treatment
  • Transfer
  • Terminate
  • Tolerate

This little blog sets out these 4 different types of control statements.


Think drugs, think staying healthy. To avoid getting ill you try to stay fit and healthy. 5 Fruit and Vegetables per day, no smoking, low alcohol consumption, regular exercise.

When you’re ill you take drugs like paracetamol and anti-biotics.

We’ve just described different types of treatment, some that are pre-emptive and reduce the likelihood of a threat materialising or reduce its impact before the risk materialises, and some that minimise its impact if or when it does materialise.

For businesses we believe treatment is always a great place to start managing risks. When assessing a risk like a product defect that causes injury, often identifying and addressing training gaps or the need for investing in some new quality assurance tools can knock a hammer blow to the probability of this risk ever happening in the first place. If the risk does occur, having a slick investigation process can do wonders for reducing the negative impact of that product defect in your market. There is often a large number of treatment options available to a company that can cost very little in many cases.

For making your workplace Coronavirus secure and to reduce the likelihood of an infection breaking out, these are some of the many common treatment options:

  • 2m distancing
  • Perspex checkout counters and workstations
  • Personal protective equipment
  • Infrared thermometers
  • A different office rota system
  • Occupational infection control training

Save time and supercharge the return to work with more help from Mushroom

✓ Full 37-point COVID-19 Risk Assessment

✓ Get a full Risk Treatment Plan, H&S Policy and workplace-reorientation pack with our COVID-19 Compliance Bundle

Plus a free consultation call with a Mushroom specialist


The clue is in the name. When we transfer risk, we pass on the risk management responsibility, relying on other parties to assist with managing the impact of that risk. Companies have multiple options. A major one is insurance; some are mandatory like Employers Liability, but you may want to take out a Cybersecurity policy. Here, you are transferring the risk of a particular loss from you as the policyholder onto the insurer.

You can also implement risk transfers in your contracts. Run a gym and don’t want to be held responsible if your member gets an injury by dropping a weight on their foot? Limit your liability in your contract.

Are you a construction company that hasn’t built an electricity connection to your new housing development? You could bring in an expert cable installation company. Subcontracting here is a no brainer; if things go wrong, you have another party to claim from if your new homebuyers make a claim against you.

As an overview, Transferring Risks include the following activities:

  • Taking out insurance policies
  • Having good contracts and limiting your liability
  • Subcontracting


Removing the risk. This is often underrated but can often be the most effective when you really go into the detail of a particular risk. This decision can often be made after assessing the costs of treatment (buying protective kit, investing in software and new machinery) or insurance policies and solicitors fees when transferring, and actually the costs don’t outweigh the risk management benefits. In this case, it’s often better to replace or remove a process or procedure to stop that risk from ever occurring in the first place.

Say you’re a lending company and you make manual loan payments to borrowers. The risk is money being lost from the loan drawdown process due to human error.  The cost of training your staff, along with extra fraud prevention software and expensive insurance policies, outweighs the cost of implementing an automated lending system where the payment details are automatically populated by the borrower, thus removing the risk of human error by your staff. This is a form of termination.

Another termination example: an architect being approached to design a shopping centre when they only have expertise in residential homes. The costs of a claim on future insurance policies or fixing errors for free as expected by the angry client may outweigh the short term cost of not taking up the contract!


Tolerating Risk is where no action is taken to mitigate or reduce it. This could be because the costs involved in managing the risk are not worth it, or because the probability and impact of a particular risk is so low that it is deemed an acceptable risk for the business.

Caution here:

Even when these risks are tolerated, they should still be monitored because future changes may make them no longer tolerable.

Risk Management is becoming an increasingly important theme for businesses amid the Coronavirus pandemic and getting employees back to the workplace. Different businesses and workplaces carry different risks and risk management is going to get more crucial to any business development decisions your company may take as we deal with changing trade arrangements with the European Union, cyber attacks increase in sophistication and the recession looms.

This is obvious, right?

Well yes, but we believe lots of companies aren’t approaching risk in the right way.

Our view is that SMEs are often sold the dream of good risk management; buying an expensive cyber security insurance policy, or outsourcing certain pieces of work or production to a counterparty, without a detailed understanding of the weaknesses of their models and the threats they face in their markets.

So take your business risks seriously. Make sure you spend time thinking carefully about the risks you face, define your control statements properly and ensure you therefore have a clear plan of how you’ll protect your company and its people, both now and in the future.

For help managing your business risks, take a look at our Risk Management Resource Centre or get in touch.

Introducing our Productivity Blog

Macro Productivity/Labour Productivity

Labour Productivity is a measure of output per unit of labour or hours worked. Since the recession, productivity growth has been sluggish.

Macro Productivity or Labour Productivity is only really useful for policy decisions, not businesses decisions. This blog sets out why  productivity is a worry for Government and the Bank of England and why policy tools won’t fundamentally solve the problem. There needs to be a culture shift in the way SMEs operate their businesses because we think improving productivity can only be done at a micro-level and not a policy level.

Labour productivity is really important for policymakers because it indicates how fast the economy can grow before it starts to push inflation up. Bank of England economists call this “slack” and the measure of this stuff influences  the Bank’s decision on interest rates.

If you are into homemade lemonade, a good analogy of slack or productivity is how much juice you can squeeze out of each lemon before you increase the number of lemons.

The Data

As you can see from the chart below, labour productivity has not followed the pre-crisis trend:

Output per hour (UK), 2000-2015. Source: Bank of England

This is the UK’s biggest headache. This is one of the main reasons why interest rates have remained so low and are unlikely to change before the end of the decade.

Some reasons have been put forward by the Bank of England in their piece on the productivity puzzle.  One reason is that many businesses kept their workers in 2008 to side-step any cost of rehiring when the economy picked up and the new jobs that have been created are in low skilled and low productivity areas of work.

For Mushroom, there are two stand out reasons for the UK’s current productivity problems:

  • Unproductive companies are facing little pressure because interest rates are so low, so the cost of overdrafts and loans have kept weak companies afloat.
  • Businesses were spending less money on investing in new skills and technologies (but this is changing).


Poor productivity is systemic.

SMEs account for 99.9% of all private sector businesses in the UK. Totaling £1.8 trillion last year, SMEs’ combined turnover was 47% of all private sector income in the UK economy yet 60% of all private sector employees were employed by SMEs.

That means that companies over £40m turnover employ roughly 40% of private sector employees and contribute 53% of private sector income.

So, poor productivity can be summarized as the following:

99.9% of all UK companies and 60% of the country’s private sector employees produce less than half of private sector income.

0.01% of all UK companies and 40% of the country’s private sector employees produce more than half of private sector income.

There are many small businesses out there, that are making a profit, but day-to-day operational cash-flows are often a daily pain. Taking growth to the next stage always seems difficult.

How do Large companies scale?

At some point, large companies got their scaling right. After starting up, running your business in preparation of this scaling is the hardest phase.

This is a problem for ambitious businesses and a problem for the Bank of England too.

Those companies that scale, generate 69% extra in income per person, per year. If more companies fall into this bracket, wages increase and living standards rise. This pushes up inflation and interest rates, creating a more stable (in price terms) economy.

We think, as accountants, SMEs should always think less about tax and more about operations. Throughout this blog series, we will go through some of the great tools and calculations you use. We are here to up-skill your management and resource planning. But for now, these are some key questions to ask yourself as an established or newly started business:

Is my spend on marketing justified for my operations?

Can I scale up my operations effectively to cope with higher demand?

How much net profit do I make per unit of goods or services?

Where/What/How/When/Why do I invest capital to improve the answers to the first three questions?



In our next blog we will look at measuring output and the four key areas we believe drive up productivity.

Building Great Customer Loyalty

Building customer loyalty is an important process for a small business. It helps encourage first-time customers to come back, builds a strong customer base, and can make you stand out from your competitors.
So how should you go about achieving customer loyalty in a small business? We’ve provided several key ways to build customer loyalty and help turn your key customers into regulars.

Making customers feel special

A first important way to build loyalty with your customers is to make them feel special. This can come down to the customer service you provide, from the moment they get in touch or walk through your door. Small businesses also usually go hand in hand with local business and local customers. So it’s a good idea to make an effort to know and understand your customers – remember their names, their personality traits, and their key purchases to show that you listen and value their custom.

Getting your customers involved

It’s also a good idea to make your customers feel involved in your company. This suggests that you always put your customers first and aren’t just interested and in making your business money. A good way to do this is to hold a community event, like a coffee morning, if you run a cafe, or an outdoor activity day, if you run a fitness club. Alternatively, you could hold an open day, with free food and drinks, if you manage a design or marketing agency, for instance.

You should also show that you like to hear your customers’ views. Consider setting up a suggestion box, where they can put their ideas to improve your business. It’s also a good idea to regularly ask for feedback, like handing out or emailing a questionnaire. You could also create an online forum, such as on your website or social networking channels, where your customers can start discussions with you and each other. Showing that you’re doing all you can you to keep them happy can go a long way in building trust and, in turn, loyalty.

Improving the customer experience

Working to better your customers’ experience is also crucial in building customer loyalty. The obvious factors are all important: making sure you always have stock in; being reliable with your services – whether that’s completing deliveries or meeting deadlines; and being consistent in producing high quality products or work. But another good way to do this is to show yourself as an expert in your business industry.

Really understanding your offerings inside out, and having exceptional experience of your business industry, can serve you well. It allows you to help and advise your customers, even with those products or services you don’t offer. This shows that you’re happy to help your customers in ways that don’t just benefit you. In return, this can encourage them to come back to you for what you do offer in the future.

Client Service, Client Communication, Client First = Client Retention.

Remember Client, Client, Client

Data Protection Services (“GDPR” compliance)

Data Protection Services (“GDPR” compliance)

May 25th 2018, the date on which the new General Data Protection Regulation (“GDPR) becomes law will be with us sooner than we think.

The new legislation brings significant changes in the way businesses and organisations can store and process data and puts much more onus on them to have either a sound legal basis for processing data. Alternatively data will be collected which has obtained consent from the individual.

Furthermore you have to be able to prove these legal bases and that you have communicated them to the individual, before May 25th.

There are huge penalties (up to 4% of turnover for businesses or organisations) for non-compliance so businesses must be prepared for the new regulation which will be fast approaching.

Here at Mushroom Management we can assist you with preparation and ongoing compliance to GDPR through our sister company tlam. Tlam is currently helping law firms get you prepared for May 25th and has all the knowledge to help your business.

Overview of the new General Data Protection Regulation

The General Data Protection Regulation requires you to show how you comply with the new principles, such as;

  • Having a clear understanding of the data you or your business processes;
  • Having staff trained about the new data protection regulations;
  • Documenting what actions will be taken from the data processing activity.

Before May 25th, businesses will have to make customers aware as to what data they hold. Looking from a legal basis, businesses will have to inform customers what they are going to do with their data. Therefore, businesses processing a lot of data may want to consider hiring a data protection officer (DPO). DPO’s can help manage your data and make you aware of what data you are controlling, which is the legal requirement.

With or without a DPO, each business will need a Data Controller. This Data Controller is accountable for failures of any data processing and equally liable for breaches. Therefore, a DPO can help you get your business to follow the new General Data Protection Regulation guidelines.

General Data Protection Regulation – Background information

General Data Protection Regulation had its last regulation in 1998. The rapid growth of the digital economy since 1998 has resulted in an enormous increase of exchanges of personal data.

Rules for the 1998 regulation focused on the length of time you should keep data and only keeping relevant data. Therefore, the up and coming regulation in May will focus on the emphasis of the customer knowing their data will be protected.

As you can imagine, the internet has come on significantly since 1998, with businesses now getting data online whether you as a customer are aware or not.

What has to be done

The Information Commissioners Office (ICO) have prescribed their 12 steps to take now to be GDPR compliant. In terms of following these we believe there are three overall stages to achieve and maintain GDPR compliance.


Identify and list all of the personal data for which you are a data controller or data processor. You need to document every process which involves personal data. Personal data includes client details, employee records & bank details. Analyse personal data for each process. Document where it came from who has access and why. The legal basis for holding and processing it. Whether it is up to date and still required.


Before 25th May: Review and update your Privacy Policies and communicate them not only to staff but to your customers and clients, Prepare Data Processing Agreements, review data security both online and offline establish breach reporting procedures, establish control of your information security assets.

After 25th May: Ensure that data is only used for the legal basis on which it was collected and that consent was explicitly given (if applicable). Communicate Privacy Notices to all stakeholders. Ensure that all new data processing undergoes a Data Protection Impact Assessment (DPIA).


Beyond implementation, your business needs to: Maintain good data governance over the personal data you control and process, make sure your Data Protection processes are performing to the required standard, foster a culture that ensures a “buy in” from your whole organisation and review your data protection compliance with a designated responsible person or Data Protection Officer (DPO).

Outsourcing your DPO 

Tlam has a Data Protection Officer and we are training more to serve its clients’ needs for quality data governance. Your senior managers, marketing or IT managers at your business may not have the time or the training to take on this role. Similarly tlam can also assist your clients with GDPR compliance. Instead of employing a new person, use someone who is autonomous and will guide you on an independent basis.

Get in touch

If you are a business seeking help with your data compliance, do not hesitate to get in touch. The deadline of May 25th is fast approaching and a penalty for not handling data correctly can be very damaging for your business. Get in touch with either tlam or Mushroom and we can talk you through the next steps for you to get compliant.

Contact tlam – 01684 342023 – Email

Contact Mushroom – 0121 285 0421 – Email

GDPR: Actions Speak Louder Than Words

With less than one month to go until the GDPR comes into force (25/05/18) and as a business owner the acronym GDPR means nothing to you, then you need to not only get up to speed on the new rules, but more importantly ensure that you meet these new requirements in the operating procedures of your company.

GDPR stands for the General Data Protection Regulations, and it is designed to enhance individuals rights to data privacy. This means that businesses who are responsible for holding personal data will need to have processes and technologies in place that can deal with data requests from subjects

GDPR builds on the UK’s existing 1998 Data Protection Act, reflecting a world of data and technology has moved on immeasurably since the Act came into force in 2000. Companies now handle extraordinary amounts of  personal information. Cyber breaches are being regularly reported in the press and prominent in the public eye following the aftermath of the Facebook cyber breach by Cambridge Analytica. When we add this to the high profile data leaks at firms Mossack Fonseca and Appelby and frightening cyber attacks at Experian and TalkTalk, it is understandable that European regulators might feel vindicated in beginning an expansion.

There are lots of companies out there at the moment going over the ins and outs of legislation which is useful, but often it does not help you get compliant on a practical level.

If you haven’t yet done anything about GDPR’s implementation, your first step will be to know exactly what personal data the company holds (and where it’s held), along with where it has come from and how you process it. Individuals will be enfranchised with  8 new data rights, including  the ‘right to be forgotten’.  You’ll, therefore, need to ensure that data is stored in easily accessible places, and know who in your organisation has access to any personal information.

Here are some tips to practice GDPR Compliance:

Tick the ICO’s boxes (as a bare minimum!)

The Information Commissioner’s Office (ICO) will also be keen to find out how exactly you are complying with the new GDPR, so it’s important you can demonstrate processes that you have for:

  • obtaining consent,
  • subject access requests
  • data-protection impact assessments
  • deleting client data
  • reporting data breaches within 72 hours.


Empathise with your customers and employees data rights.

In all cases, the ICO’s prescribed processes will need to reflect the fact that individuals now have enhanced rights as individuals. Make it easier for yourself.

Achieving compliance through empathy is super effective at obtaining and maintaining compliance easily. Whether you are a managing director, compliance officer or manager, you are also an individual and you have your own feelings and desire to control how you are presented digitally and what information is held about you.

Put your customers at the heart of this exercise. The opportunity to build a stronger layer of trust can leverage a transformation in company culture and turbocharged quality in the services you provide.


Create a role for data protection (Official or not)

Every public authority and company that carries out large-scale individual monitoring (such as online behaviour tracking) will need to have a Data Protection Officer in place, while every other company will need to ensure that a senior staff member holds responsibility for compliance with data protection.

Opening a new role for GDPR compliance is important in ensuring your new compliance systems are working. Hire or appoint the role to someone who grasps the innermost understanding of how your business works and has the ability to work across all your departments and with all your stakeholders.


Don’t get caught out.

It’ll be important to ensure that you don’t get caught out by GDPR. For example, when you are collecting customer’s email addresses you will need their consent if you want to use these for marketing purposes (which they must be able to later opt out of) and you will also need to explain to your customers how exactly you plan to use their data. No longer can any company have a ‘pre-ticked’ opt-in box on your website, or use e-mail to promote products or services beyond the reason for which the customer initially gave their data without their consent.

The other big priority you will need to do over the next month is contact all of your clients to confirm they are aware of GDPR and what you are doing to update your procedures. As well as the above, this will also need to include updates to your privacy notices to show the data you collect and how you plan to use it. You will need to show how you have considered who has access to data (and why), demonstrate that all data is secure and regularly backed up. One suggestion under GDPR is to think about encrypting all electronic devices!

Getting your company up to speed on GDPR isn’t a choice – it will very soon be against the law for companies to not offer greater personal privacy around data. Failure to comply could lead to fines of up to 4% of total annual turnover or €20 million, whichever is greater, so not having the right data protection policies in could be very costly.

The Benefits of Outsourced Accounting

The benefits of outsourced accounting

Outsourcing can be a big decision, especially when you’re just starting out. At this point you want as much as possible as close to your chest, feeling in ‘control’. At this stage, your company is like a child or a small plant; you are responsible for growing and nurturing it. We get it.

Avoiding Cheap and Risky

In the beginning, the non-income generating functions of your business are often done as cheaply as possible but often carry the highest risks.

When you are running your company and you’re in your first couple of years it is highly unlikely that you will have an accountant/bookkeeper in your office on your payroll. You may have a co-owner or founder acting as Finance Director (FD) or Chief Financial Officer (CFO) and understandably they should be working on a bespoke financial strategy if that’s relevant to your company. This is great, having someone that can zoom in from a strategic level and set up a system exactly how they want it at the most granular level is awesome. So, 99% of the time you’re probably safe.




…If you don’t have an FD or CFO and you don’t have an accounts person, you might have a PA or a close relative or friend that might look after your books. This can be effective, if they are good. But can you be sure they are? Moreover, if your company runs something slightly more complicated than sales receipts in, expenses out, how much does cheap actually cost you?

Say you trade internationally, or you run a client account, or your revenue gets funded at an intervention rate of 45% via taxpayer-funded grants? Doing it on the cheap is high risk and could lead to serious mistakes.

At Mushroom we replace the idea of you getting a cheap solution with a neat solution.


Get a Better Understanding of how Accounting Works


Back to the financial strategy part: If you are reluctant to outsource due to fear of loss of control then you may not fully understand how your accounts technically work or what is and isn’t compliant with VAT rules, PAYE, NI or a whole host of other things. Imagine your PA, close friend or relative plugging away at the numbers without asking questions for fear of looking stupid or jeopardising your relationship? It doesn’t bode well for the long-term success of your company, nor feeling comfortable about the financial stability of your firm.

When you outsource, you turn essentially an employee-employer, or friendship-based relationship into one based on a contract. A good supplier (like us 🙂 ) will ask you questions like “why do you pay your IT bill a couple of days after you receive your invoice, rather than to your standard terms of 30 days?”

You’d be surprised at the number of great business owners with great companies not knowing what we were talking about, let alone those providing a mediocre answer!

So often at Mushroom we tend to get entrepreneurs (who just want to sell or do what they do best) levelled up on their financial knowledge as well as giving them a small cash-flow boost each month.


Good outsourced accounting firms have a system of supervision that give you enterprise grade resources at very affordable prices.

Accounting is one job area but done well you are combining a whole range of skill-sets:

  • posting income and expense items effectively
  • applying VAT correctly
  • chasing outstanding money
  • spotting poor budget management
  • paying salaries and administering the payroll accurately and on time
  • ensuring all elements of a company’s financial system is running in accordance with the strategy of the firm
  • complying with all relevant tax and sector specific regulations


Even as a small business owner, in order to have a faultless finance department you need a Financial Controller, Sales Ledger Clerk, Purchase Ledger Clerk, Payroll Administrator, Credit Controller and if you want good regular information you might need one of these people to be good at producing reports or hire a Management Accountant as well! Big salary bill huh?


The truth is when you outsource your accounts to Mushroom, you get:


5% of a Financial Controller, 15% of a top-quality bookkeeper, 2% of a Payroll Administrator, and 5% of a Credit Controller. So that’s 27% of one accounting person working for you on a full-time basis.


This is an enterprise grade team you might find in a 5 year old company turning over £2-10m per year.

Since you don’t (currently) need at least 4 people on a full-time basis you could get an equivalent service for around £8,000 a year, or £667 per month per year rather than £10,000 per month!


Not a fortune for enterprise quality really, is it?

Ultimate Accountability

Accounting isn’t just about counting, it’s about accountability. Accounting actually means holding a company to account for all the income it receives, expenditure it makes and taxes it pays. Removing that burden from your in-house demands and working on a contract basis instead means you can be properly in control. You, the customer, are king. A king without admin is a happy customer, too.


Find out more about Mushroom’s Accounting offering here.


Still not sure about outsourcing? Read more here and get a FREE review of your Accounting, HR or Privacy needs to see what these simple solutions can do for you!


How a virtual PA will save you hours per month

How a virtual PA will save you hours per month

No matter what your business, whether you’re a sole trader or a large team, you will have paperwork to deal with and admin to organise.  You may prioritise getting clients/sales and doing your business, but this paperwork is a vital part of your business too.

But what if you:

  • Aren’t a fan of admin?
  • Would rather be doing something else?
  • Struggle for time?

A virtual assistant isn’t the same as Siri or Alexa.  They’re not there to play your favourite music or check the weather (necessarily). But today’s technology does allow a real person working from a remote location, usually their home or office, to help support you and your business.

A Virtual Assistant may seem like a luxury but can actually be surprisingly cost-effective and can benefit you in many ways.  Think about it.  If you could easily delegate certain regular tasks, what would your week look like?

You could:

  • Increase income because you have more time getting more clients/sales.
  • Be more productive because you are more focused on the tasks that excite you in your business.
  • Reduce your stress levels and increase your well-being if you’re struggling to juggle work, family and leisure interests.

How much time do you spend each day/week on the following:

  • Checking and sending emails?
  • Making/taking telephone calls?
  • How many are spam?
  • Planning meetings/travel?
  • Organising insurance renewals?
  • Filling in spreadsheets?
  • Preparing/formatting documents?
  • Drafting letters?
  • Preparing invoices/quotes?
  • Chasing customer payments?
  • Researching?
  • Managing projects?
  • Procrastinating?
  • Getting distracted?

Do you have a separate work phone or do you use your personal one?  How often do you hear a ping on your phone and check to see if it’s an important email but then get distracted because you got tagged into a post on Facebook? Then while you’re there, you have a quick scroll down to see what everyone has been up to at the weekend?

How many phone calls do you take each day? How many of them are spam and disrupt your train of thought in what you’re working on?

What about meetings?  How many face to face meetings do you attend?  Do these meetings require you to plan travel, parking?

Do you tend to renew insurance policies or service renewals without researching for alternatives (and thereby maybe paying extra) or do you take the time to get new quotes for each?  Whether it’s your car, property, public liability or travel insurance, it all takes time.

How up to date are your IT skills?  You may have done IT as a degree module at university or taken a European Computer Driving Licence (ECDL) a few years ago but with technology updates happening constantly, how quickly can you prepare or format a spreadsheet, report or presentation with the latest version of software?

Getting money into your business is essential but the administration of it can easily be handled by a Virtual Assistant, whether it’s preparing your invoices/quotes or handling credit control.  A good PA may also be trained to use accounting software such as Xero, where repeating invoices can be easily set up, saving even more time.

A Virtual Assistant can also help make you more time by automating regular tasks with things like email responders and appointment schedulers to make sure routine things happen without any ongoing effort.

As mentioned previously, it’s easy to get distracted or interrupted by a phone call or email but what about procrastination?  How often do you spend procrastinating about a task that you know needs to be done but you’re just not looking forward to doing it?  Instead, could you delegate it to a Virtual Assistant?

If you need help in several areas of your business, you can choose to use more than one PA.  Or you could use an organisation that offers Virtual Assistant Services.  The latter may suit you better because you have access to support from a whole team of people, therefore you get a wider range of skills and experience for the cost of one assistant, plus you are assured continuity of service regardless of holidays or sickness.

For the solopreneur with a long to do list, you might feel you haven’t got time to train anyone to handle these tasks or that it’s easier to just do it yourself.  It is true that in the short term you would need to allocate time to ‘handing tasks over’ but then your time would be saved.  Initial investment for a long term reward.


Another concern may be that of maintaining quality.  A good Virtual Assistant will make your business look good.  They’ll have the same work ethos, communicate in the same way that you would and be professional in every task they carry out.  They will be an extension of you. It is possible to ask a Virtual Assistant to do a test piece of work for you to ascertain your confidence in them and their work, or you could delegate a few tasks initially and then increase the workload over time.


Mushroom provides a Virtual Assistant service that helps with all administrative aspects of running a business. Jane Judd of Lace Law states “I cannot recommend the professional and friendly PA’s at Mushroom enough.  Their service allows our solicitors to focus on work uninterrupted.”


Find out more here, or sign-up for a free test-task to try us out with no obligation.

Make your Self Assessment tax return hassle-free this year with these 7 handy tips

Make your Self Assessment tax return hassle-free this year with these 7 handy tips


As we near the deadline for Self Assessment tax returns, let’s face it, nobody is looking forward to the aggravation! Getting everything together, filling out forms, paying money to the Government… we didn’t get into business for this!


But Self Assessments don’t need to tax your brain as well: take a look at these useful tips and save yourself some headaches – and some money!



1. Remember the deadline!


Tax Returns for income earned between April 2018 and April 2019 must be submitted to

HMRC by 31st January 2020. But don’t leave it until the last minute! HMRC’s online system 

unsurprisingly gets heavy traffic during the last week in January and if you’re caught in the 

rush, you risk seeing an error message and missing the deadline.


If you do, you may receive a penalty notice, and whilst you may be able to appeal on the grounds of a

system issue, this is not a certainty. In any case, you’re trying to save hassle, not cause more, right?



2. Save money for your tax liability


HRMC also requires any Income Tax due to be paid by the same deadline, 31st January. So make sure you save the money for this as you go along. A good way to save is to put aside at least 20% as soon as you receive the income from your clients or customers, and you may even find it useful to open a separate bank account for tax payment savings to keep it clearly distinct from other monies going through your accounts.


HMRC is very stringent if you miss the deadline for paying your tax bill and they normally charge interest on any outstanding amount on per day basis. Saving well in advance should help with your cashflow and ensure you have the funds available when you need them.


Don’t forget you may also need to pay a ‘payment on account’ to HMRC for the next tax year, which is normally 50% of your current year tax liability.



3. Keep good records as you go along


Whether you use a simple spreadsheet or one of the many affordable cloud accounting systems on the market, if you keep your bookkeeping up to date throughout the year you will thank yourself come self-assessment time.


Decide early how you will record all your financial transactions and keep to the routine. Our pro recommendation would be to use cloud-based bookkeeping software because it will:

  • Keep all of your records (such as invoices and receipts) digitally, ensuring you are already compliant with the Government’s Making Tax Digital (MTD) requirements.
  • Keep you on track throughout the year, meaning you are only ever a few clicks away from finding out how your business is doing and, if you are profitable, your estimated tax liability to be certain you have the funds available.
  • Integrate with your bank feeds making the bookkeeping process far less laborious and your visibility so much greater.


Bookkeeping software charges are also allowable expenses for tax purposes so it reduces your taxable profit.



4. Get good advice on tax savings


Have you looked into your options for saving tax? Again, don’t leave this to the last minute, get competent advice from a decent accountant and you may end up saving a fortune.

Who doesn't like saving money!

Get £25 off the preparation of your Tax Return with Mushroom this November.

5. Make sure you’re registered


Is this the first year you’ve had a Self-Assessment tax return to submit? Have you registered yourself with HMRC to get your Self-Assessment UTR number? The deadline to register for a UTR number if you started your business in the 2018-19 tax year was 5th October 2019. If you missed the deadline, HMRC may send you a penalty for late registration of UTR. But don’t let that stop you registering ASAP to avoid further penalties.



6. Cash-basis or Invoice-basis? Make sure you choose


It’s very important to decide whether you will prepare your accounts following a cash basis policy or on an invoice basis. A handy hint: if you prepare your tax return on a cash basis then your income and expenses will only include actual income received and expenses paid out.



7. Don’t panic, let someone help you


A hassle it may be, but there’s no need to be left in the dark or stuck doing it all yourself. Get an accountant or bookkeeper to organise everything for you and free yourself from the stress.

We can help get everything in order!

Get £25 off the preparation of your Tax Return with Mushroom this November.