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Three key legal questions for UK finance departments

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Three key legal questions for UK finance departments 1

By Magali Michel, Director, Yooz

From Brexit to Covid-19, 2020 has been a disruptive year for UK finance departments.

But now that we’re finally starting to see the light at the end of the tunnel, businesses are turning their attention towards the tasks at hand that will allow them to return to what is being deemed as the ‘new normal’.

One of these areas is around UK financial regulations, which change on an almost daily basis. Businesses have to become better at dealing with developments in order to stay competitive, now more than ever.

So, as the dust starts to settle, what are the key questions finance departments across the UK need to ask to make sure they’re not caught flat-footed?

  1. HMRC has pushed back the deadline for MTD until April 2021, but should businesses still aim to digitalise their invoices process despite the delay?

There are several reasons why it is essential to do so. One is that HMRC has been very clear that it wants to become one of the most advanced digital tax administrations in the world. That means other taxes, probably starting with corporation tax and self-assessment, will soon follow MTD for VAT.

Rather than regarding MTD as a compliance issue alone, it is best to see it as an opportunity. A part of the current MTD legislation which is often missed is that you have to keep records digitally, so the sooner you upgrade to a digital process for every part of your finance function, including invoices, the better. Storing them digitally in the cloud is much easier than keeping paper invoices on file for the six years which is required by law.

What’s more, this will bring business benefits including being able to offer something more competitive to clients and suppliers, and greater efficiency, efficacy and accuracy.

  1. How can a digitalised AP process facilitate a business’ Duty to Report?

Duty to Report legislation, which came into force in the UK in 2017, means that companies over a certain size have to provide a lot of detail about their payment practices to the Department for Business, Energy and Industrial Strategy. It is designed to protect small businesses from the £2billion they lose every year due to late payments. But it isn’t just how long it takes you to pay invoices which the government wants to know.

Companies must also report whether they use e-invoicing, which is a platform where suppliers can upload and track their invoices. Digitalising your AP process including portals of this type will not only help you to comply with Duty to Report legislation, but it makes your company a more appealing option for suppliers.

When your AP process is digitalised, it is easy to see at any one time which payments are due or late. That makes it much easier to stay on top of them. The legislation is an opportunity to embrace automation and good practice, and it will leave a clear and secure audit trail.

  1. How does an automated AP streamline the process for contractors and subcontractors?

If contractors can upload their invoices to a supplier portal and track progress from there, it gives them greater transparency and control over the process. Rather than sending invoices which may be treated differently each time, the contractor knows that their invoice will be automatically categorised and validated for payment. Eliminating manual tasks creates greater accuracy and efficiency throughout the entire process for both contractor and employer.

Conclusion

Businesses in the UK and indeed globally are actively preparing for the negative impacts of COVID-19, focusing their resources on supporting customers over what will certainly be a challenging period.

Minimising disruption on the legal side and complying with financial regulations will only help businesses focus on customer-care strategies and the changes needed to facilitate this new business environment, helping support the economy and protecting the resilience of the financial department.

Finance

Staying connected: keeping the numbers moving in the finance industry

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Staying connected: keeping the numbers moving in the finance industry 2

By Robert Gibson-Bolton, Enterprise Manager, NetMotion

2020 will certainly be hard to forget. Amongst the many changes we have come to live with, for many of us it has been adapting to a new style of working. Whatever your take on it is, remote working, working from home or even agile working, one thing remains clear – for many of us, this could be the new-normal for the foreseeable future. The professional services sector is no different. For example, many finance practices around the world are now allowing staff to work from home part of the time. In addition, a recent KPMG report found that half of the UK’s financial services workforce want to work from home after COVID-19.

Will this therefore become the de facto working practice for the finance industry too? We can’t say for sure, but this agile approach to working has certainly caused a major rethink for many firms. And as they evolve and adapt to meet the demands of a different way of working, firms need to ensure that their workforce can seamlessly interact with each other and their clients – this is key if they want to continue to deliver exceptional client service. Whilst financial services organisations everywhere are busy adopting innovative new technologies to better reflect the ‘work from anywhere environment’, they need to ensure secure access to resources and strive towards enhancing the end user experience. Success will be replicating the office working experience at home or wherever else they may be.

It’s all well and good for a firm to boast about the ability of their staff to work successfully from home, but how do they also establish that their people are just as productive as they were before? Whilst the IT department will have to grapple with security and compliance issues that arise from agile and remote working, they must also ensure that their people can connect securely, without eschewing user experience. And it needs to be completely seamless, without compromising the service level provided to clients.

Why all the fuss?

Which brings us nicely to persistent connectivity. Persistent connectivity effectively allows you to do more. How frustrating for the user when connectivity drops, or when the device that they are working on can’t find a network to connect to (or if the device switches between different networks). When connectivity drops, and re-connection is required then there is that small period where the user is not connected at all. And the user might have to re-authenticate or log into their VPN again (most VPNs are rubbish when they lose connectivity). All of these different scenarios ultimately disrupt the user experience – persistent connectivity provides the flexibility to overcome these challenges. When you enjoy consistent connectivity, you are making sure that the technology works as it was designed to work, allowing staff to rely on optimum user experience, anytime, anywhere – in effect, supplying them with that office-like experience, wherever they are. Just think about how many hours might be spent on a train, in a hotel or even on a client site. Consistent connectivity is key here – consistent in any of these locations.

Connectivity will be a fundamental component for successful remote working as firms try to meet the demands of an increasingly mobile workforce. Ultimately, they need encrypted and reliable connections that enable them to quickly and easily reach business applications and services. Working in a disconnected environment can lead to frustrated workers, hardly fitting given all the new remote working policies in place.

Getting the user experience spot-on

When you fine-tune connection performance so that essential business applications run reliably across networks, you are essentially talking about traffic optimization. Mobile traffic optimization ensures that applications, resources and connections are tuned for weak and intermittent network coverage and can roam between wireless networks as conditions and availability change. When connections aren’t performing well, applications that are crucial for job performance can experience packet loss, jitter or latency that can make working on the hoof extremely tricky. Compared to wired networks, wireless networks operate under highly variable conditions, including such factors as terrain or congested mobile towers. When you optimise the flow of traffic, you are helping to manage packet loss. Effectively, packet losses are data loss, which happens very regularly when you’re on the move or transitioning between different networks. Applications that require a lot of data tend to become fairly unusable when you hit even minor packet loss, which can be a common occurrence for many on residential broadband or on local Wi-Fi. conversely, NetMotion can enable critical applications to work and prevent disruptions at over 50% packet loss – in this way, employees can rely on technology performing well in situations and locations where it simply could not before. That is incredibly powerful for firms.

The finance industry is facing many of the same challenges presented to other industries. It is a question of balancing the requirement for more sophisticated ways to ensure secure access to resources with the need to enhance the end user experience (key team members in particular). For finance firms everywhere, adopting the right technologies will ensure that their people can enjoy a ‘work-from-anywhere’ environment.

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Hong Kong’s Cathay Pacific warns of capacity cuts, higher cash burn

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Hong Kong's Cathay Pacific warns of capacity cuts, higher cash burn 3

(Reuters) – Cathay Pacific Airways Ltd on Monday warned passenger capacity could be cut by about 60% and monthly cash burn may rise if Hong Kong installs new measures that require flight crew to quarantine for two weeks.

Hong Kong’s flagship carrier said the expected move will increase cash burn by about HK$300 million ($38.70 million) to HK$400 million per month, on top of current HK$1 billion to HK$1.5 billion levels.

Hong Kong is set to require flight crew entering the Asian financial hub for more than two hours to quarantine in a hotel for two weeks, the South China Morning Post reported last week, citing sources.

“The new measure will have a significant impact on our ability to service our passenger and cargo markets,” Cathay said in a statement, adding that expected curbs will also reduce its cargo capacity by 25%.

The airline, in an internal memo seen by Reuters, requested for volunteers among its crew who could fly for three weeks, followed by two weeks of quarantine and 14 days free of duty, adding it will be a temporary measure and not all its flight will require such an operation.

“We continue to engage with key stakeholders in the Hong Kong Government,” the memo said.

The government did not immediately respond to a request for comment.

Separately, a company spokeswoman said the airline could not detail the impact on vaccine transport specifically in terms of cargo shipments.

The aviation industry has been hit hard by the COVID-19 pandemic as many countries imposed travel restrictions to contain its spread.

In December, Cathay’s passenger numbers fell by 98.7% compared to a year earlier, though cargo carriage was down by a smaller 32.3%.

($1 = 7.7512 Hong Kong dollars)

(Reporting by Shriya Ramakrishnan in Bengaluru; Additional reporting by Jamie Freed in Sydney and Twinnie Siu in Hong Kong; Editing by Bernard Orr and Arun Koyyur)

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Travel stocks pull FTSE 100 lower as virus risks weigh

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Travel stocks pull FTSE 100 lower as virus risks weigh 4

By Shashank Nayar

(Reuters) – London’s FTSE 100 fell on Monday, with travel stocks leading the declines, as rising coronavirus infections and extended lockdowns raised worries about the pace of economic growth, while fashion retailers Boohoo and ASOS gained on merger deals.

The British government quietly extended lockdown laws to give councils the power to close pubs, restaurants, shops and public spaces until July 17, the Telegraph reported on Saturday.

The blue-chip FTSE 100 index dipped 0.1%, with travel and energy stocks falling the most, while the mid-cap index rose 0.1%.

“Stock markets are crawling between optimism around the rollout of vaccines and worries that a jump in virus infections and fresh local lockdowns could further affect recovery prospects,” said David Madden, an analyst at CMC Markets.

Britain has detected 77 cases of the South African variant of COVID-19, the health minister said on Sunday while urging people to strictly follow lockdown rules as the best precaution against the country’s own potentially more deadly variant.

Prime Minister Boris Johnson had earlier warned that the government could not consider easing lockdown restrictions with infection rates at their current high levels and until it is confident that the vaccination programme is working.

The FTSE 100 shed 14.3% in value last year, its worst performance since a 31% plunge in 2008 and underperforming its European peers by a wide margin, as pandemic-driven lockdowns battered the economy.

Online fashion retailers Boohoo and ASOS surged 4.8% and 5.9%, each. Boohoo bought the Debenhams brand, while ASOS was in talks to buy the key brands of Philip Green’s collapsed Arcadia group.

Recruiter SThree Plc gained 0.9% after its profit, which nearly halved, still managed to beat market expectations and the company said it had resumed dividends.

(Reporting by Shashank Nayar in Bengaluru; editing by Uttaresh.V)

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