Faraday Keynes Ltd

Our drive is that we believe you can do better. Smarter communication, more valuable brands and stronger results.

We Create
Future

In this guideline my objective is to share some useful information based on my personal experiences and observations related to designing and development of business website.
Your website can be a value adding factor for development and growth of your business.

Summary of this article

  1. Definitions of key terms and why they are important to understand e.g website, Server, HTTPS, SSL, Domain name, DNS, Hosting and SEO.
  2. Types of websites and features involved which can help your businesses
  3. Logo designing options
  4. Several website options i.e hosted solutions vs open source
  5. DIY or hire someone to implement website
  6. Website promotion via PPC, social media and SEO (is it worth the money?)
  7. Last but not least, Accounting treatment of website costs

Key terms defined

  • Website: It is a collection of digital web pages and related content i.e. images, and text etc. coded together all sitting on a specific computer on internet also known as web server.

  • Web server: is a computer on internet that runs a special software and holds other files related to a website, such as HTML documents, images and JavaScript files. If you go for hosted solution, it is all taken care of else you will have to pay for web server under shared or dedicated hosting plan of your choice.

  • Hosting: The core purpose of Web server hardware is to host and connect to the internet to allow data to be exchanged with other connected devices.

  • HTTP (Hypertext Transfer Protocol) is the set of rules for transferring files, such as text, graphic images, sound etc between connected devices. This is special protocol used between devices to handle website viewing requests.

  • Protocol, as per computer science, is a set of rules or procedures for transmitting data between electronic devices, such as computers.

  • SSL: or Secure Sockets Layer, is an encryption-based Internet security protocol. It is for the purpose of ensuring privacy, authentication, and data integrity in Internet communications. This makes http to httpS, which is essential for make website more secure and rank well on google.

  • Hypertext Transfer Protocol Secure (HTTPS) is an extension of the Hypertext Transfer Protocol (HTTP). It is used for secure communication over a computer. The little padlock sign especially on checkout pages to make sure connection is secure from hacking.

  • A domain name is website name. A domain name is the address where Internet users can access website. It is used for finding and identifying computers on the Internet. Computers use IP addresses, which are a series of number. However, it is difficult for humans to remember strings of numbers. Because of this, domain names were developed and used to identify entities on the Internet rather than using IP addresses. Bit like mobile numbers saved under names.

  • DNS: Domain Name System is mechanism where IP addresses of computers hosting website files, servers are converted to domain names.

Things required for website to work

  1. Domain name
  2. Web hosting
  3. Web site files and content

A domain name can be any combination of letters and numbers extensions, such as .com, .co.uk, .net etc. The domain name must be registered before you can use it. Every domain name is unique. No two websites can have the same domain name. If someone types in https://www.faradaykeynes.co.uk/, it will go to my website and no one else's.
Domain name must be pointed to web hosting server’s IP address via DNS setting so that user request for domain name can reach website files and content. 

Now how to get domain name.
   
There are many websites on internet handle domain name purchase. You can check your domain name availability for your business. Once required name confirmed to be available you can pay for it to reserve it for your ownership. Companies like 123reg or godaddy offer domain name registration, they also offer hosting as well. Many hosting companies offer domain names too for free or some extra cost.

Tip: I would suggest keep domain name separate from hosting company in case something goes wrong with hosting company you can change DNS to new hosting company to carry on business as usual by keeping down time as short as possible.

Web hosting 

Many companies offer web hosting at different prices and levels, you can run through your business requirements, i.e expected website traffic, bandwidth required, disk space, speed of server, shared or dedicated hosting, size of website, location of web server etc. Many factors to take into account. We can help you with this to make informed decision about hosting requirements. Here is link to our favorites hosting provider with excellent customer service, speed, value for money and up time if you are looking for your own hosting instead of hosted option.

Web site files and content
 This is another crucial element you need to look into i.e. how to generate files and contents for your website.
You have many roads to take from here

  1. Logo design
  2. Hosted solutions with website builders software
  3. Hosting with open source CMS
  4. Custom design and hosting ( This option is mainly where you hire developer for complicated project and sensitive hosting requirements with relatively high budget in place)

Logo is very important part of business. You can search many online options to create logo, some are free and some are not. Similarly you can hire logo designer to get job done, many freelancer websites are out there for this kind of venture OR you can take bull by horn and do it your self-using some excellent software cost nothing like Inkscape, GIMP, paint-net or even Microsoft publisher. There is bit of learning curve here but you will earn skills that will go long way in term of not only generating logo but graphics which can be used on your website and business later on. (Like one above I did as an example). There is one my favorites, AAA logo, its paid software, very good for logo especially and great value for money.
Hosted solutions.

 These are solutions for website where you subscribe to a particular platform’s hosting plan and based on price you want and pay you get features of website accordingly. There are many on the market, to name some 

  • BigCommerce (for e-commerce)
  • Shopify (for e-commerce)
  • WordPress.com (for e-commerce + static content & Blog)
  • Weebly
  • Squarespace
  • Wix
  • GoDaddy Website Builder

Its best to visit website for each provider and study pros and cons. As you compare the website builders, it’s good idea that you write down what you want from your website? Your goals and features you would like to have on your website. List of these providers is long and so are pros and cons. To summaries globally here are some benefits

  1. Drag and drop page builders
  2. No need to learn extensive HTML, PHP and CSS codes though know how will help a lot
  3. Free professional quality images
  4. Responsive predefined templates which can be downside as well if you want to customize it
  5. live support 24/7
  6. logo making options
  7. Contact and lead capture forms
  8. Email marketing plans
  9. Built-in support for eCommerce
  10. Some do offer in-store POS, which means you can sell products at your location, while accepting all credit cards and taking advantage of their inventory, shipping, marketing, and stats management tools.

Cons

  1. Third-party add-ons cannot be installed to website to add new features, you are stuck with add-ons provided by site builder
  2. Hiring a developer to significantly modify website design or add new features to your website is not always possible.
  3. Site migration to other platforms or hosting companies is not always possible unless starting from zero again with new system.
  4. Prices can depends on number of pages or products listed on site.
  5. There might be a transaction fee for use of default payment gateways.
  6. Overall price plan can be expensive in long run considering business expansion compared to open source + own hosting route

Hosting with open source CMS 
Open source: mean in general software for which the original source code is made freely available and may be redistributed and modified.
CMS stands for “Content Management System” is option where open source software is used to create a website and manage contents
Web pages are written in HTML, PHP, JavaScript, and CSS programming languages. Open source CMS take care of all this with flexibility of customization.
To name few open source CMS here are most popular ones

  1. WordPress
  2. Joomla (my favorite, for both e-commerce+ contents + blog)
  3. Drupal
  4. WooCommerce
  5. Magento (for e-commerce)
  6. PrestaShop (e-commerce)
  7. Opencar (one of the best e-commerce open source option, see our live website for IT products,  technur.co.uk )

Benefits of Open source CMS

  1. Easy to use
  2. Lot of templates option both free and paid or create your own via 3rd party apps
  3. Easy to import and export data for further analysis
  4. Extensions and add-ons, these are feature rich modules / widgets which can enhance website functionality to great extent with customization as flexibility option. These can be added and removed as and when needed. E.g I added a Dividends calculator to my website
  5. Dedicated CMS based support is limited to FAQs / documentations but plus side is big supportive community and option to hire developers to sort out any complex issues
  6. Most CMS platforms are completely free. Some charge a monthly fee. Even with free ones there is often need to pay for third-party extensions, designs, and/or web hosting services.
  7. Most web hosts offer a 1 click installation
  8. E-commerce store can be run as extensions or some CMS are dedicated e-commerce platforms

Cons

  1. Flexibility comes with a cost of learning curve
  2. Compatibility issues if you have a lot of different extensions and modules installed.

SEO (Search Engine Optimisation)

The concept behind SEO is organic ranking of website on search engines especially google. It is a long term game nothing happens overnight.
Basic level start with selecting right keywords and descriptions for your website pages. Several tool available for keyword searching based on how much impressions, clicks and expected ranking difficulty. Good home work is required before launching website to optimize with correct and relevant keywords as getting his wrong can cause more damage to website ranking than bringing any good. Google’s own keyword planner is good starting point.
Intermediate level is to run site through several SEO tool to check codes under the hood are all SEO friendly and error free. This is done to make sure site is being read by search engines as per ranking criteria. To name some tool, Google Site speed test and mobile user friendly test are must at least.
Here are example of both above based on my mini site “ Milton Keynes Accountant” 

Google Page speed test (anything above 90 is decent)
  
Mobile Friendly Test

Google data structure test

Advance Level is for best left to SEO experts, this can cost lot of money as its long term game and lot of things involved including unique content creation, Link building (both non follow-href and follow-href) and preferably , guest posting, on page SEO, off page SEO etc etc. 

Apart from SEO you should not neglect pay per click advert, social media sharing and networking

Last but not least how to account for all these cost above in your books and accounts
 
Accounting treatment of website development costs 

An issue which is generating debate is the accounting treatment for software and website development costs. FRS 102 does not address the classification of software and website development costs and therefore in the absence of specific guidance, reporting entities are required to develop and apply a suitable accounting policy to classify such costs as either tangible or intangible fixed assets.

Software and website costs which are being developed internally are dealt with under Section 18 of FRS 102 as research and development costs. All research expenditure (pure and applied) must be written off to profit or loss as expenditure; there is no option at all to capitalize research expenditure. This is because in the research phase of a project, an entity will be unable to demonstrate than an intangible asset exists which will generate probable future economic benefits.
Once the research phase has completed and the project has been moved into the development phase, the entity may recognize software and website development costs if, and only if, an entity can demonstrate all of the following:

  1. The technical feasibility of completing the intangible asset so that it will be available for use or sale.
  2. Its intention to complete the intangible asset and use or sell it.
  3. Its ability to use or sell the intangible asset.
  4. How the intangible asset will generate probable future economic benefits. Among other things, the entity can demonstrate the existence of a market for the output of the intangible asset or the intangible asset itself or, if it is to be used internally, the usefulness of the intangible asset.
  5. The availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset.
  6. Its ability to measure reliably the expenditure attributable to the intangible asset during its development.
  7. Micro-entities reporting under FRS 105 The Financial Reporting Standard applicable to the Micro-entities Regime cannot capitalise any development costs; all such costs are written off to the profit and loss account as incurred.

Website development costs should only be capitalized if they meet the recognition criteria of an asset; one of those criteria being that ‘it is probable that the expected future economic that are attributable to the asset will flow to the entity’.
To assess whether costs qualify for recognition on the balance sheet, the entity must look at the overall functionality of the website. If the website will allow third parties to place orders for goods or services, then this creates a revenue stream for the business (i.e. economic benefit). Provided the cost can be measured reliably and none of the expenditure relates to research costs, then the website may be capitalized on the balance sheet as an intangible asset and amortized over its useful economic life. Please note that under FRS 102, intangible assets cannot have indefinite useful lives (see ‘Amortization of intangible assets’ below).
If the website does not generate income for the business, then it will fail to meet the asset recognition criteria and the costs must be written off to profit or loss.
Care must be taken with the accounting treatment for website development costs because mistakes can be costly (especially if the incorrect tax treatment is applied).

Conclusion

Good home work is important for getting right results, having glamorous looking website is not enough, having lot of traffic alone is not good either unless that traffic is converting to revenue. It is good idea to pick brain of expert of industry to make informed choice. As once system and setup selected shifting from that is not an easy thing for growing business. Please feel free to contact us for FREE initial generic consultation. I am sure we can be of great help.
I leave it to my client to pick whatever accounting software they want to use based on their needs and comfort after consultation and then work with them instead of pushing them to a particular software option.
 
If you need any help for your website for whichever option you pick, I am happy to assist you based on my experience and expertise on the subject for a nominal fee.
 
Kind Regards
Omer