Like many, the first thing I saw of Northern Ireland as I flew into the city airport, was the two huge yellow cranes adorning the skyline.  The Harland and Wolff cranes stand testament to Northern Ireland’s entrepreneurial past which once boasted the largest shipyard in the world and the first aircraft manufacturer in the world.

As post-conflict Northern Ireland attempts to move its economy from public sector driven to private sector driven, or, from a wealth burden to wealth creation, we look for an economic model to enable this.

One such model seems to be the venture capital driven valley model.

But is this good for us?

Firstly, I would say that this model requires a culture where entrepreneurialism is encouraged and failure seen as learning.  Sadly, I would say that the culture of Northern Ireland does not encourage risk taking.  Civil service and the “professions” (read – people who charge you for stuff you don’t want done – accountants, lawyers, medical etc.) remain the safe heavens of preference.

Secondly, I believe this model requires access to large local markets to succeed. 

One of the first, some argue the first,  business computers was manufactured by a British company.  The LEO computer. Many say one of the main reasons that they failed to gain global dominance was that the domestic economy was simply not big enough for more than a few sales whereas,  shortly after IBM entered the US market and sold hundreds.  As a result they became big enough to be able to globally market and sell their product.

So, whilst building global product is desirable, it is difficult to achieve without first building local product where learning your market is much cheaper. 

So what is the German model?

I am writing this from the West of Ireland – a heaven from the intrusion of the internet.  Here in my Leitrim farmhouse I have no phone – I don’t just mean a weak signal on the mobile – I mean not even a land line, no internet, two TV channels, electricity that dims when the oven is turned, water pumped from my own well, even my own sewage works – known as a septic tank.

I do have a radio.

I have always found Irish business programmes to be excellent.  In Northern Ireland business coverage is a couple of 10 minute slots from Eddie O'Gorman on Radio Ulster, or some national coverage from Radio 4.  The Irish, however, seem to take there business much more seriously with programmes such as today FM’s “The Last Word” and The Sunday Business Show giving extensive business review and comment.

As I listen this morning I began to despair.  The state of the Irish economy has made listening to theses programmes rather like the funeral of a revered celebrity.

Then I remembered the glass is still nearly full.

UK GDP Growth from the Office for National Statistics

Yes the economy has shrunk over the last 3 years – but over 90% of it is still there!  Some sectors of the economy, mainly construction related, have contracted much more sharply but for those of us not directly involved in these or able to sell to other sectors we should remain focussed on profitable and growth areas of our business.

In my ‘O’ level in economics there are broadly are two causes of inflation – Cost-push inflation and Demand-pull inflation.

These are pretty self explanatory – cost-push being increased prices of raw materials and demand-pull being increases in demand allowing the market to set a higher price.

The MPC has interest rates as a tool to keep inflation in check.  Interest rates affect consumer spending and so put a kerb on consumer demand hence mitigating demand-pull inflation.

However, it is fairly plain to me that we are not suffering demand-pull inflation – the UK retail sector is not exactly in rapid growth.  According to the office of national statistics -

“Over the period February 2011 to March 2011 the retail sales volumes increased by 0.2 per cent and the value of retail sales increased by 0.1 per cent.”

Our current inflationary woes seem to be caused mainly by high oil and commodity prices and historically weak sterling.  Raising interest rates at this point would, in my opinion:

1. Stifle the current recovery – particularly in weaker UK regions such as Northern Ireland which are not yet out of recession,
2. May strengthen sterling leading to decreased competitiveness of UK exports,
3. Not reduce inflation which currently seems to be mainly cost-push

So far I’ve not mentioned the other influencer – monetary policy.

Monetary policy is about how much money is in circulation.  By putting more money in circulation through “Quantitative Easing” (QE), the Bank of England made the pound in our pocket worth a bit less – result – inflation.

Now that QE has stopped, I would expect the value of the pound in our pocked to stabilise.

So, on balance, the decision for the MPC on 4’th and 5’th of May should be simple, hold firm on interest rates.  I would expect this to remain the case until we see significant demand-pull inflation.

I would also expect inflation to continue to fall away over the coming months as cost-push inflation falls as commodity and oil prices stabilise or fall.

As time goes by and working practices change, customers become more demanding of their software. With accountants and bookkeepers in mind, Stiona Software Ltd created “Fusion Accounts”, software that solves many problems for the user.

This is my impartial review of Fusion accounting software. I recently came across the software whilst reviewing other better-known accounting software packages for my clients and my blog. I came across the software by chance and have been using it for a few weeks now with one of my clients. I have to say that I am very impressed with the software and decided I had to write a review to let others know what this accounting software can do for them and their business.

So what has made me so excited about Fusion Accounts? Well, in addition to the usual run-of-the-mill features such as sales ledger, purchase ledger, bank, P&L, VAT etc, Stiona software have incorporated a number of additional features to help the busy accountant in the ever changing working environment.

Fusion Accounts also incorporates:

- Sales & Purchase Order processing

- Foreign trading with Multi-currency facility

- Vat Calculations and

- Foreign VAT registration

Once you have logged in securely, you go straight to the Business Dashboard which gives you a very quick overview of where the business is at – in real time. From the summary information contained in the dashboard you can, at one click of your mouse, access more detailed information in respect of your debtors, creditors, bank, cashflow, P&L, etc.

One of the greatest benefits of Fusion Accounts is that as an online package, I can access it anytime and from anywhere, so long as I have internet access. It is also very easy to use, which I am finding saves me a lot of time and helps me reduce costs for my clients.

You can also have multiple accounts within the software, enabling you to manage all of your clients from one screen. The software has an automatic backup facility too, again saving you time and money.

The next step for me is to migrate as many of my clients as I can convince to change. This migration process is very simple, as you can import data from Sage, CSV and certain other formats (you need to speak to the support team to check). Then I will be able to manage my clients from one screen, instead of the multiple packages I am currently using. I also have control over the levels of access my clients get, reducing the number of potential errors they can make!

This online accounting software is available from http://www.fusionaccounts.com

There is a 30 Day Free Trial – with absolutely no commitment!

Should you decide to purchase, simply determine the level you require and you simply pay a small monthly amount, no capital outlay is required.

The software comes with free, fast and friendly support which aims to ensure you can always use it.

Author: Paula Scoplin

Home Based Accounting Business

In the UK, the standard rate of VAT (T1) is to change to 20% from 4 January 2011.  As with the changes over the previous two years, Fusion Accounts users will need to do nothing!

The new VAT rate will be available for your financial transactions from 7 December 2010 for any transactions that you are preparing now that require the new rate.

From 4 January, unless you indicate otherwise, all products having a 17.5% rate will be changed to a 20% rate as will any other defaults using this rate.

For more information on the rate change please refer to HMRC.

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