# what to do with money in business



## dingdong (14 Aug 2007)

Hi 

Our business is starting to go well. We are a small profitable company with 400,000 euro in the black constantly. Just sitting in the current account. I only need about 100,000 for cash flow. 

My bank offered a depsoit of 3.2% which is crap but better than nothing.

Can anyone give me any ideas what to do with money, or best way to invest it in most tax efficent manner.

Help appreciated


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## ClubMan (14 Aug 2007)

Do you not have an accountant/financial advisor coming up with suggestions?


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## dingdong (14 Aug 2007)

My accountant does my year end, but has,nt offered any extra advice.  Should he be? or should i get my own personal advisor. 

I pay him 2000 per year for non audit accounts. so i don,t know do you pay more for someone to work closer with you.


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## ClubMan (14 Aug 2007)

I would imagine that you would probably have to pay for additional service but an accountant or other financial advisor with a more intimate knowledge of your business and personal finances would presumably be much better placed to offer specific advice than posters on a discussion forum such as this?


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## ninsaga (14 Aug 2007)

Is the balance growing consistantly & at what rate is it incrementing?

Does the company need to invest in equipment/premises improvements?

What about training/advertising?

If all the usual things are taken care of then why not give yourself a pay increase


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## dingdong (14 Aug 2007)

i could take more wages but taxed highly on this just wondering a better tax effecient way , thanks for your help


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## daveccork (14 Aug 2007)

as well as considering salary increase it may be well worth while considering pension funding options. The company can most likely make significant contributions to a company pension scheme if one exists. this can be very tax beneficial. make sure you get good advice from someone competent in this area.

obviously once this money has been put into pension it is gone so ............

if you wish to keep the money within the business then shop around for better interest rates (northern rock, rabodirect, anglo etc.).


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## Bob the slob (14 Aug 2007)

Use some of it to grow the business even further.


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## anan (15 Aug 2007)

Buy your competitor company


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## MichaelBurke (15 Aug 2007)

Plan for the future either for yourself or your company, pension etc.


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## z108 (15 Aug 2007)

what line of business is the company in ? 
Expand, take on more employees. Buy the best tax and investment advice.
Invest in new ideas, improved machinery, premises. Expand within your core competance or try a new venture within the company and see how that works. Theres lots of things you can do.


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## dingdong (15 Aug 2007)

Thank you all for your comments, great little site!!!, Can you recomend any good  independent financial advisor?. As i think accountants are all getting backhanders from there own newtork of advisors and financial people.

Would love to start somthing again from scratch, ?? do i need more sleepless nights!!!!!!!!!!, but life is about risk , no pain no gain!!! 

 Thanks


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## ClubMan (15 Aug 2007)

dingdong said:


> As i think accountants are all getting backhanders from there own newtork of advisors and financial people.


Silly comment. If you don't trust your accountant then get another one but don't tar the whole profession with one (presumably inaccurate) brush. I am not an accountant by the way.


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## Firefly (15 Aug 2007)

dingdong said:


> Hi
> 
> Our business is starting to go well. We are a small profitable company with 400,000 euro in the black constantly. Just sitting in the current account. I only need about 100,000 for cash flow.
> 
> ...


 
I'd go "skiing" in Switzerland every year


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## ubiquitous (15 Aug 2007)

dingdong said:


> My accountant does my year end, but has,nt offered any extra advice.  Should he be? or should i get my own personal advisor.





dingdong said:


> As i think accountants are all getting backhanders from there own newtork of advisors and financial people.



Just to clarify, most practising accountants are authorised by their respective governing body to provide investment advice to clients. However many choose not to do so, mainly because of the difficulties in complying with the very heavy regulation of investment recommendations. The general wisdom out there is that the level of commissions payable by banks etc for client referrals is tiny at best, and would not cover the work and risk involved, given that the volume of such work would not justify an accountant investing in the sort of software and processes that a dedicated financial advisor would use on a day-to-day basis.

Most accountants, if asked, should be happy to provide a client with a list of regulated financial advisors who may be able to help them in relation to investment decisions. The client can then pick one or two from the list and make up their mind themselves.


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## Graham_07 (15 Aug 2007)

dingdong said:


> As i think accountants are all getting backhanders from there own newtork of advisors and financial people.
> Thanks


 
You think wrong. This one doesn't. By all means express your views but don't tar everyone with your brush. 

Then again maybe all builders are cowboys, all politicians are corrupt and all footballers are .... well not on the Cork team anyway.


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## MichaelBurke (15 Aug 2007)

Far too much brushing going on.....................


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## TripleA (15 Aug 2007)

dingdong said:


> Hi
> 
> Our business is starting to go well. We are a small profitable company with 400,000 euro in the black constantly. Just sitting in the current account. I only need about 100,000 for cash flow.
> 
> ...


 
A SELF-ADMINISTERED PENSION FUND is very suitable to you in this situation


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## ClubMan (15 Aug 2007)

Why is this necessarily "very suitable" in this specific situation (about which we only have partial info)?


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## Purple (15 Aug 2007)

ubiquitous said:


> Just to clarify, most practising accountants are authorised by their respective governing body to provide investment advice to clients. However many choose not to do so, mainly because of the difficulties in complying with the very heavy regulation of investment recommendations. The general wisdom out there is that the level of commissions payable by banks etc for client referrals is tiny at best, and would not cover the work and risk involved, given that the volume of such work would not justify an accountant investing in the sort of software and processes that a dedicated financial advisor would use on a day-to-day basis.
> 
> Most accountants, if asked, should be happy to provide a client with a list of regulated financial advisors who may be able to help them in relation to investment decisions. The client can then pick one or two from the list and make up their mind themselves.


I think that's good advice and a good answer to an ill-considered remark.


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## TripleA (15 Aug 2007)

ClubMan said:


> Why is this necessarily "very suitable" in this specific situation (about which we only have partial info)?



A Self Administered Fund is a Pension set up by an individual or individuals who have spare cash or a significant Pension fund already in place. It would not be "very suitable" for anyone who had €400K on deposit but needed it for cashflow purposes.

With a Self-Administered fund you are in control of the fund along with a nominated Revenue Approved Trustee (who basically overseas the project and that all Rules and Regulations are followed)

A Self Administered Fund allows the individual to put in say €300K into the fund. (There would be an immediate tax saving of 12.5% on this in Corporation Tax in the Company Accounts). This €300K can be combined with existing pensions into the new fund set up as JOE BLOGGS PENSION FUND LIMITED.

The owner then can do what they like (with approval from the Trustee) in this Fund. Say for example they purchase a property. The property is worth €2m and requires a €1.5m loan. This is rented to a third party (must be an unconnected party). The Rental income plus any ongoing monthly contributions will go into this fund tax free.

Therefore loan repayments can be upped to match this and you should see the paying off of this loan happen much quicker than in normal circumstances. Over a period of time you should have the loan paid off and the asset appreciated. Thus turning your few hundred thousand into hopefully a lot more (obviously within your pension fund)

At any stage there is the opportunity to dispose of any asset and flip it over to a new asset etc (again with Trustee approval)

The major plusses to this above putting it in a normal pension fund are:

1) Transparency: you can see what you own and monitoring it is easier
2) Cost: There is obviously a set-up fee but there is the annual charges consist of an audit (as its a Limited Company as well as being a Pension Fund)

I hope this clarifies it somewhat for you??


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