Streamlining Business Finances: Practical Strategies with Kam Grewal | EP291

Discover how to confidently manage your business finances as we kick off the year with Kam Grewal, a seasoned accountant with 24 years of expertise. Kam opens up about the journey of running KD Accounting Solutions and the crucial role trust plays in the accountant-client relationship. Whether you're just starting out or a seasoned entrepreneur, this episode will reinforce the importance of feeling comfortable with your financial queries and regularly reviewing your accounting practices to maintain a solid foundation for your business.

Our discussion unfolds with practical financial strategies tailored for self-employed individuals and small business owners. Dive into the transformative 30-30-30 rule, designed to streamline your financial management by allocating 33% each for taxes, business costs, and personal income. Highlighting common pitfalls, we stress the importance of maintaining separate business bank accounts and staying on top of bookkeeping. We also clarify the distinction between bookkeeping and accounting, encouraging you to embrace modern software to simplify these processes and keep your finances in check.

As we round off the episode, we tackle mindset challenges like imposter syndrome and technophobia, offering guidance on how to overcome them. Gain insights into recognizing your skills and rationalizing achievements while utilizing resources like Blinkist for ongoing learning. Kam shares his expertise on harnessing the power of technology like Xero to conquer bookkeeping fears, empowering you to manage your business finances with confidence. Join us to gain actionable insights and transform your approach to financial management.

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Chapters

• 0:00 Business Basics With Cam and Donna
• 14:27 Managing Business Finances for Success
• 21:38 Navigating Business Finances and Mindset
• 30:52 Tech Training for Financial Management

Transcript

Donna Eade: 0:50

You're listening to the Mindset in Action podcast, the place to be to grow and streamline your business. I'm your host, donna Eade. Let's jump into the show. Welcome back to the podcast, everybody, and happy new year. And so this is really really different for me, because normally my first podcast of the new year is a solo episode where I welcome everybody to the new year and we maybe talk about goals, et cetera, et cetera.

Donna Eade: 1:25

But I thought you know what? This year we're going to be different. We're going to be different and we're going to have a guest on the show and I have the wonderful Cam Grawl in the house. Welcome, cam, so happy to have you here. Thank you for having me. I am so excited to talk about this because if you listen to the podcast before Christmas, you will have heard that I had Diane Watson on the show and she was talking about personal finances and it's really, really important that we know our numbers and Cam is an accountant. So, before we jump into talking about money again, because it's a really important topic and especially at the beginning of the year, to set you up for the rest of the year, cam, introduce yourself, tell us a little bit about who you are and what it is you do.

Kam Grewal: 2:04

So I'm Cam. I run a company called KD Accounting Solutions based in St Albans. I set my practice up just over four years ago now, but my background is predominantly in industry, so I've always been the in-house accountant working within a company's finance function. I've been doing accounting for about 24 years now, and I'm really passionate about delivering the best service to my clients.

Donna Eade: 2:29

I love that.

Kam Grewal: 2:30

I never would have thought I'd be an accountant when I grew up.

Donna Eade: 2:34

It's not one of those things that kids aspire to be not really, but I tell you what a funny little story is that when we had one of the careers days and it must have been when I was in like I don't know, year 10 or 11 or something there was a careers day and there was a chartered accounting um company there that were talking about chartered accountancy and they were giving out posters. And I had a chartered accounting company there that were talking about chartered accountancy and they were giving out posters. And I had a chartered accounting poster on my wall for years because it was a really cool looking poster. It was really like really bright colours, vibrant, geographic sort of design and it was just said and then, whatever it was I can't remember what the company was called, but chartered accounting and I always just had that and I always thought, oh yeah, oh yeah, accounting working with numbers, I'd like that. I think I would like that.

Donna Eade: 3:19

Yeah. So there was always something in the back of my head and I did do a bookkeeping course, um, in my 20s. So, oh, that's hilarious. You might not have aspired to it, but they did try and get me in that way. But, um, so what do you do in your business now? So what does it look like. What's your client base look like?

Kam Grewal: 3:37

so I've got a couple of bigger clients, so the limited companies, and I've got quite a few sole traders who are running their own businesses, even under their own name, and then I've got some small limited companies as well. So it's quite a range, and I don't work with a particular industry or anything either. I think for me it's the people. So if we can work together and we we get on, then we can have a great relationship, I think that's so important, isn't it?

Donna Eade: 4:06

the relationships, and I think that is something that people often overlook. They're just looking for the cheapest price or you know all of those kind of things that are kind of your tick box items, but when it comes to looking after your money, I would say that you know trust has got to be the number one priority, and being able to kind of get to know somebody and feel like you know this person is somebody that I can trust to do what's right for me and my business when it comes to my money because we hear a lot of horror stories out there about accountants, don't we?

Kam Grewal: 4:36

It can be scary we do. And do you know? The thing that I hear the most actually about accountants is people can't talk to them and they come and ask me questions, like my friends who are in business. I'm like guys, you're paying for a service, you should be able to ask the questions, and if you can't, you need to be looking at why you should be able to ask the questions, and if you can't, you need to be looking at why. Why?

Donna Eade: 4:59

there's this block in place and is it time for a change? Yeah, yeah, absolutely. I just yeah, that's, that's. I hope you're charging Like, excuse me, you're not one of my clients, so if you want those answers In wine, in wine, in wine, I love it, brilliant, brilliant, okay, so today I wanted to talk about sort of some of the basics around setting up.

Donna Eade: 5:20

So, thinking of listeners out there who might be pretty new to business, I do have a lot of people who are fairly new to business, like under a couple of years old. But then I also have some people who are, you know, quite established in their businesses five years, 10 years or more. But I think accountancy is something that people forget to review. You know, you set up with an accountant, you set it, forget it, and then maybe you're like, oh, I'm hands off, I don't want to deal with that, I don't want to know about my numbers, just tell me how much I get to take out each one. So I think it's really important that we kind of review it, even if we are older in business. So what are some of the basics we need to know to set ourselves up system-wise?

Donna Eade: 6:07

For me, I like to keep it simple. You know there are people out there that use like spreadsheets, excel and things like that for their accounts. But what you say is you know a way to keep it simple in business. What should we be looking at with our accounts?

Kam Grewal: 6:21

um, I think if you're completely new to business and you've got a plan and you've already kind of looked at where your money's going to be coming from, your costs look like. I don't want to say the word forecast, but that's actually what you're doing. You're creating a forecast. Yeah, it's as simple as that. Really, just what's my income, what my cost going to be, and you'll be able to map out quite easily what your take home will be. Obviously, we're talking about newbie, so you've. Also, if you're going to earn over a threshold, so the 12,750 you're going to be paying tax. So then you need to start thinking about right, I can't actually take all that money and spend it. I need to be putting away 20 plus some. So let's go with 30 for tax and an eye.

Kam Grewal: 7:13

If you're self-employed, one of the easiest ways and I recommend everybody does this when they set up in business to keep track of your numbers is a little bit of software, just a little bit of software. Um, you can now. It's so intuitive. You can now put your bank feed through and if you have an accountant, they will have access to cheaper subscriptions. So for less than 10 pounds a month, you can have a snapshot of how your books look, because your bank feed will come through.

Kam Grewal: 7:45

Hopefully, you would have been shown just how to reconcile those items, which and all that means is you're putting it against sales or costs and you get your profit number at the bottom. It's very, very simple, but having that kind of data will help you while you're growing. Understand. Am I doing enough right now? If I've only got one package out there and actually I'm not performing, I'm not getting that profit number that I thought I'd be getting. You can see that very, very quickly. You don't have to wait until the end of the year to be told by your accountant well, it's not been that good a year for you, has it? You know nobody wants to hear that. This is how we should be looking at our businesses on a monthly basis.

Donna Eade: 8:28

Yeah, yeah, absolutely. I love that. You said that, because I am somebody who loves a bit of software and there are lots of different accounting softwares out there. Are there any that you think are interesting? I wouldn't. I'm not going to say better. I don't want you to have to sort of say, no, this one's rubbish, but ones that you prefer, and if you can tell us why you prefer to use them so I only work with Xero.

Kam Grewal: 8:54

They have quite a range of um subscriptions, so they've they've got two or three that I can offer to my smaller clients, which you can't buy off the shelf as a user, as a business owner. So I get that from my practice. And then they have, you know, higher level ones which cater to the companies that are bigger and need the bells and whistles. The thing I like most about Xero is their interface. It's so simple and clean that it just it takes away some of the fear that people have when they think about having to do the bookkeeping. It's very intuitive. So it starts, for example, on a bank record, it'll start matching or suggesting things based on what you've done before, which obviously is going to make it more time efficient, and they've just developed the quickest. They've been on the ball and, from a from a practice perspective, I also can file accounts through it. So my clout's on zero. There's no getting bits of paper and putting it into a spreadsheet, uploading it into anywhere. It's all linked and it's fantastic.

Donna Eade: 10:03

Other softwares are available, guys, but, um, particularly with zero and the ones that you know of, they have the function to be able to like scan your receipts into it, so you don't have to be like keeping bags of receipts to take to your accountant and throw on their desk once a quarter.

Kam Grewal: 10:20

None of my clients do that, absolutely. No one is allowed to bring paper to me. I have trained them all. So, um, yeah, I. For the ones that have the higher level subscription, they automatically get a product called Hubdog. Now, hubdog is fantastic. You can have it as an app on your phone and you open the app, take a picture of a receipt and it goes into the system. Um, you just need to code it and it's there, it's done. You don't need to go to a scanner, you don't need to. You know, get. You can even email in. Actually. So, um, there's several different ways. If you're on a desktop and you've got, you've got a picture of something you can just drag and drop. They've just helped streamline that process so much, yeah, that business owners can do it without needing their accountants to yeah, I always is.

Donna Eade: 11:11

It is zero the one. Oh, I'm gonna like it's another one. I always see this ad on YouTube of a guy on a skateboard scanning um receipts as he goes down the line, and it's for one of the apps, I can't remember which one.

Donna Eade: 11:27

I'm not sure, no, it's a blue. It's definitely blue is their company color. But yeah, hilarious, makes me laugh every time I watch it. But he's like but yeah, makes makes scanning your business receipts a breeze or something. It's like so funny. But yeah, so that's really useful for that streamlining and that's something that we love to do on this show is to streamline our businesses in any way possible. So making. To come back to the bank account thing that you said you can put your bank account into it. What are your thoughts or your preferences around people using a personal bank account versus a business bank account? Because I think a lot of people when they start up, they just open another current account and they're like, oh, I'll just use that for my business. What are your thoughts from an accountant?

Kam Grewal: 12:31

you should see. This is this is one of my really like please, if you're setting off in business, please, please, please, sell off another bank account because it's so important to have it separated. You will save yourself time down the line it it will be less of a headache trying to figure out if that coffee was when you met a client or a new business and you can put it through the business or not. So a little bit of confusion comes up when it comes to bank accounts. If you are self-employed and you are just trading as you, you can just set up another personal account because it is it is you with a limited company. It's a separate entity, so you do need to set up a separate bank account.

Kam Grewal: 13:13

Okay, that makes sense you don't always have to pay massive fees. You know, I use styling personally and I don't pay any bank fees. They're fantastic. Do what I need them to do, yeah. So yeah, there's um, there are. There are banks out there that are maybe less traditional, so you don't have the branches, but then you also don't incur costs for having that account.

Donna Eade: 13:34

Yeah, yeah that's useful to know, because I think a lot of times people get tripped up with the, the legalities of things that like that. So, um, that was a really useful tip. And then earlier on you were talking about like putting a percentage away for tax and things. So I wanted to sort of circle back to that and talk about how we actually break down our money, because I think a lot of people think they should. You know they're buying stuff for their business, so they can.

Donna Eade: 14:01

You know that that money obviously comes out of the business money, and then they want money for themselves and and that's it, and that's all we do is like, once of the business money and then they want money for themselves, and that's it, and that's all we do, is like, once all the business expenses are done, the rest of it is mine to take and I can spend it how I want, and I think a lot of people get in trouble doing that way. So are there any rules of thumb for you on how you kind of talk to your clients about splitting their money or just in general how you feel people should look at? You know, you've got this 100 pot of money that's coming into your business. What do we do with it?

Kam Grewal: 14:32

I definitely say you need to put money aside for tax and I if, especially if you're self-employed, the the profit number they were staying under, we're staying within the first threshold. So so the 20% you're not hitting above 36,000, for example then you want to be pulling away 20 to 30% because you are paying income tax and you are going to have to pay national insurance as well. So 30% is a really safe place to be. And that is on the profit number number. So once you've taken your income, you've taken off your costs from that profit number, the number you want to spend. You need to take away your 30 percent. Yeah, if you're a limited company, then you need to be looking at about 19 percent for the corporation tax, and that is if you're not taking anything else out of the business like dividends and okay things like that yeah, dividends might go a little bit over a lot of our people's heads so we won't even dive into that, if you want to know

Donna Eade: 15:34

about dividends separately, then please do message Kat, she will go through that with you. But yeah, I think that's important because the rule of thumb that I've always followed is 30, 30, 30 and30. And I know that that leaves 10 over, but it's beside the point of 33-33-33,. Whatever that, 33% is tax and national insurance, 33% is business costs and 33% is what I get to take. And then hopefully my business costs are lower than that and I think a lot of us are self-employed, solo entrepreneurs working from home. We can often keep those costs quite low. So you're not necessarily hitting the 30%. But the reason that I do that is because what if my laptop breaks down, or what if I need to access a piece of software or a? I need to buy something that is out of the ordinary, an annual expense that's a big one, or a one-off bigger expense. I'm going to have a little savings pot there in the business that I can pull from without having to go. Oh my God.

Donna Eade: 16:44

And I think a lot of people forget to sort of do exactly what you were saying earlier and forecast what's my next 12 months look like? What am I? Am I going to want to buy a new computer? Do I need a new x? Do I need a new y? How much is that going to cost?

Donna Eade: 16:58

And actually putting that, taking that into consideration, I think we do as bad enough in our personal finances that we don't think oh yeah, I paid the car insurance in full last year. I really should be putting £10 away a month to pay it next year in full as well. Everybody just brings out the credit card or just put it on the credit card or whatever. So I think it's really important to kind of think about those things when you're thinking about where your money goes. So I really appreciate that. Looking at our accounts, what are the biggest mistakes that you see people making with their accounts? I would love to know, from an accountant's point of view, what are some of your pet peeves, like absolutely can't believe that this person did that. You know you don't have to name and shame any clients. Obviously clients obviously.

Kam Grewal: 17:46

Well, I'm very happy to say that my thoughts are very well trained from the start, but I think, um, in general I can see that having the business bank account is one of the big things that people don't get right at the beginning. And then you're kind of between two bank accounts, trying to, you know, move direct debits across or subscriptions across, and that's. You know it's a pain trying to get all that done. It's more admin, so it takes longer. So definitely the business bank account, that is really important and then actually just doing your books, because people set up a business, they've got a fantastic idea and they want to go and that's all good and well and delivering everything's fantastic. But you need to be on top of what's happening. If you're not on top, you don't know if you've invoiced people, have I actually been paid for this, and then you don't know when the money's coming in or if the money's coming.

Donna Eade: 18:46

You just need to be on it and something like software will help you with that what I would like you to do for me is just clarify the difference between bookkeeping and accounting, because I think a lot of people put that in the same boat and they don't realize that they're two different things.

Kam Grewal: 19:06

So when we're talking about bookkeeping, we are literally talking about doing your day-to-day reconciling of your in and out of your bank account. That's the core of your business. So I'd say that's basically bookkeeping and your accounting would be.

Donna Eade: 19:23

when you're then going on to look at your full year and perhaps you're doing reporting obviously the compliance piece as well, um, so that would be maybe calling it compliance and your day-to-day is a bit more simple yeah, yeah that makes sense to me that makes sense and I think because I do think people get a day or I need an account, I need an accountant, and actually they need a bookkeeper because they want to give all the receipts to somebody or whatever. It's almost like it's so much easier to be your own bookkeeper these days with the software that's available, so I think it's a really useful thing, yeah, especially as a small business owner.

Donna Eade: 20:05

When you're like trying to keep those costs down, a person is just going to say the same. That might be an issue going forward, but it's really. It's really one of those things as a solopreneur that you should be able to do yourself and with the software is is quite a simple thing to do. So, to wrap up our little talk about um, accounting and looking after our money, what are three things that you would want a listener to take away from today's conversation and either implement or take to heart and go and do some research on?

Kam Grewal: 20:50

definitely the business plan. So, look, make sure your business plan is solid. Um, that doesn't have to be pages and pages, it can be. This is my product, this is my price and the forecast of it. So so I want to get to let's go with the 36,000 a year, because that's an easy number to work with. I want to get to that point. How am I going to do it? Work backwards and make sure that you understand right, what does that look like? Per month it's 3k. How am I going to do that? What do I need to sell? How am I going to get myself out there to sell that? And it's just taking it backwards, I feel can really take the overwhelm out, especially new business owners, take the overwhelm out of it. So that level of planning would be so beneficial to take them through the year. The business bank account and I keep saying it clearly I feel very strongly, very passionate about this one yeah.

Kam Grewal: 21:48

So the business bank account. It will just make your life easy. It's a no-brainer from the start. Get it set up. It doesn't need to be, you know, a really big bank that you go with. It can be some of these online options. And then, yeah, just putting the money away for tax, making sure that you understand what you actually can spend, so you're not hit with a tax bill at the end of the year because nobody wants that.

Donna Eade: 22:12

No, absolutely Love that. Thank you so much. I really appreciate it and I think it's a really good conversation for my listeners to listen into as well. Now, as I have said previously, in my episode before Christmas, I said that changing things up a little bit this year. So no mini Mindset Mondays coming this year, but we're going to embed them into this episode. So mindset is a big one for business owners and, knowing you, cam, as I do, I know that this was a a big big block for you to come on and have this conversation with me and I'm so bloody proud of you for doing it. But I'm probably thinking this is just just just a little thing, one of those little things in amongst the rest of it. So what is kind of the biggest mindset block that you have had, that you've had to shift over your business lifetime?

Kam Grewal: 23:09

I think it's definitely the dreaded imposter syndrome. Definitely, even when I worked in industry, the first company I went into was in London is my first job in the big smoke. People swore in the office. I was like, oh my goodness, what is this place? And uh, I was the youngest person in the business. Yeah, I fitted right in. I um, I just remember being the youngest person in the business and I had to implement a massive change um to all the processes and I genuinely didn't think I could do it. And then the MD and the FD sat me down and I said, right, we're not saying anything, but we are going to make you do this. So we're not going to get involved, but we want you to do this because we know you can yeah and so that spurred me on.

Kam Grewal: 24:09

I got, I got through it. I have amazing relationships still and we're talking about 24 years ago, 23 years ago with quite a few of those people from that business. So that that, and also when I was going to set up the company four years ago, obviously I always worked in business, not my own, and it was one of those where I wasn't I don't really fit in the box like your typical accounting box, if you like and so I got quite frustrated and just threw my toys out of a can and went well, I'm gonna do this now. I've had enough. I'm not interviewing anymore for any of these companies if they don't like me as I am. Well, I'll just do it myself, do it myself.

Kam Grewal: 24:51

So I did, I did and I I took the approach that I've kind of shared. You know, I kind of went well, where do I want to be? What does that look like? How am I going to get there and worked it back? And obviously, with my industry, there's a lot of red tape, so there was that to get through as well, which felt quite daunting at the time. Once that was done, I think I started networking and that might have been where we first met. Yeah, within a couple of months yeah, yeah.

Donna Eade: 25:20

So one thing that I want to kind of pull on there is is how you overcame your block, and it seemed like you kind of just got to a point where you're just like, well, no, I'm just going to do it, and it was just kind of a switch. So are there any other things that you do when that creeps up, that you're sort of mentally saying to yourself to help you cope with when it rears its ugly head?

Kam Grewal: 25:44

Absolutely, and I actually do this with other people as well. So I rationalise a lot, lot. So I will get, if I'm in from in a really bad place and I feel really stuck, I will write down what have I accomplished with the skill set that I think I don't have, and actually I'll read it back and then I'll go, wow, well, if I read this on somebody else's CV, they could definitely do the job. You know, and I think it's just qualifying your skills by recognizing what you've actually already done. Yeah, and I think when, when you do anything new, sometimes it does feel a bit overwhelming, but sometimes writing those things down, you can completely qualify your skill set by just looking at what I've done so far, yeah, and and just talk to people as well and they'll tell you that you're awesome. Usually, yeah, yeah, usually they do.

Donna Eade: 26:40

Talk to the right people. Talk to the right people. I love that. That's such a good tip. Thank you so much for sharing that. And, as always, guys, when anybody brings up imposter syndrome, I always link that fabulous talk by Reshma in my comments, because it's just an amazing talk. So if you haven't listened to her talk about imposter syndrome and bicycle face, then go to the comments below into the show notes and listen to it, because it's bloody amazing. So listen to that. Okay, so thank you for that. We're going to go on to my quick fire round now. So we're going to, and it is going to be quick because I don't want us to run over. So first question what is a podcast you're listening to and loving right now?

Kam Grewal: 27:23

um, I'm not actually listening to any podcasts at the moment, but I am a bit of a Blinkist addict, okay tell us what Blinkist is um. So Blinkist is an app that I've, I've got and it and it gives you snippets of books, so it gives you the top takeaways and you can just listen on the go, and I find it really useful because you get a summary almost of a book in 20 minutes, which probably doesn't do it justice, but it's the key takeaway.

Donna Eade: 27:52

How's listening to one of those Blinkist ever made you go? I need to buy this book and actually read the whole thing.

Kam Grewal: 27:57

I have some saved, but it's a time thing for me yeah, it's a time thing I've got books that if I had, you know, a few weeks off, I would definitely get um, but yeah, I won't be able to name them off off my top my head now. But um, yeah, one of them I think I was reading recently was called the power of habit by Charles Duhigg, and this is a good one for those people who don't like to do their bookkeeping. If you did a little bit each week, just plugging that in yeah, yeah, absolutely, it would make it a lot easier it would, um, yeah, love that, love that.

Donna Eade: 28:34

So what's the book that has made the biggest impact on your life so far? So, maybe not one of your blinkest books, maybe back when you had a bit more time and you actually did do some full length book reading.

Kam Grewal: 28:44

Yeah, or maybe it is a blinkest book I don't know.

Donna Eade: 28:46

Go for it.

Kam Grewal: 28:47

No, it's not. This is again tying into into. When I went into my first big job, um, I was quite introverted and shy and I came across Dale Carnegie and he his book how to Win Friends and Influence People. Um, I had friends just saying that, um, but it actually helped me understand a bit more psychology because, bearing in mind, I would have been in my very early 20s at that point and I was working with people who were a lot older than me, so it gave me quite a good insight and influencing people was 100% my job in that place yeah, brilliant, love that.

Donna Eade: 29:26

I've got that one on my bookshelf. Um, what's your favorite go-to snack when you're in a hurry?

Donna Eade: 29:30

definitely stoats, oat bars okay very specific, like an oat bar, and I do yeah, I'm quite, I'm quite picky about my oat bars as well, so I get that. And then, finally, what is your ultimate me time thing to do? Because I know you're a mum, you've got some children that run around the house, you've got a dog. That's a quite a young dog. So what do you do when you actually get some time to yourself quite a young dog. So what do you do when?

Kam Grewal: 29:55

you actually get some time to yourself. I actually took myself off on Monday for a spa day amazing, I had an amazing time and it was definitely very, very rewarding just being offline and, yeah, just the quiet, the quiet. I actually I did take a notebook. I did take a notebook, to be fair, and I was doing some planning as well, because I like doing that when I'm away from the office yeah, I'm a planner as well.

Donna Eade: 30:20

I like to do planning, so, yeah, I love that well. Thank you so much for coming on the show today, cam. It's been an absolute joy and I hope that now you've done it, you're just like what was I even worried about? This has been brilliant.

Kam Grewal: 30:32

Tell people where they can find you online and how you can help them yeah, at the moment my website is being redone so you'll find me on linkedin cam gruel. So g-r-e-w-a-l and um, you can get in touch for a consultation, and I also train people on software. So training people in zero so they can, can do the round-foot keeping.

Donna Eade: 30:56

Brilliant, brilliant. So there you go if you need a hand with getting your head around the software, because we know that there are some technophobes out there that think everything is well beyond them and when they have a little bit of training they realize actually they can do it. You know that imposter syndrome comes in, doesn't it? Oh tech, no, I can't. So go and connect with Cam. All of her links will be in the show notes, so do go over and connect with her. Thank you so much for listening. Thank you for coming on the show, cam.

Kam Grewal: 31:21

Thank you for having me.

Donna Eade: 31:23

We'll see you in the next one. Bye for now.