Why does a business need accounts?
Most businesses are required to produce a set of accounts at least once per year. These accounts will form the basis for the tax return which tells HMRC how much tax is owed.
Aside from accounts being a requirement, as a business you can benefit greatly from carefully considering the information within your set of accounts. Accounts can tell you how well your business is doing and may highlight areas that need to be addressed. For example, if you sell products or offer a service and your accounts show that your margins are too slim you may decide to increase your prices or negotiate harder with your suppliers to increase profit and keep your business healthy.
This is just one example from among hundreds or possibly thousands of why a good set of accounts can help both you and your business. There is a vast amount of information contained within a set of accounts that can be utilised to improve your business.
Accounts can be produced as frequently as you need them. So, if you require frequent up to date information about the performance of your business then monthly management accounts will possibly be best suited for you. However, if your business is very small and you have a rough idea of how well you are doing then you may only want the statutory annual accounts.
Why not give us a call so that we can help you decide how frequently your business requires accounts to be produced?
It is nearly always better for a professional to produce your business’ accounts because an accurate and comprehensive set of accounts will be of much more use to both you and your business, and will ensure that you are paying the correct amount of tax to HMRC.
We hear about, and indeed experience first-hand, horror stories whereby business owners have completed their own accounts to save money only to find that in the end it has cost them much more. This comes usually in the way of penalties and interest charged by HMRC for underpaying tax, or by not claiming for all of the expenses and allowances the business was entitled to claim and overpaying tax.
Producing accounts can be very complex and it can be easy to make mistakes, this is why it is nearly always better to hand it over to a professional and get on with the more pressing task of running your business!
What’s involved with compiling your accounts?
Your accounts are a report based upon the bookkeeping of your business, whether you have completed the bookkeeping yourself or we have completed the bookkeeping on your behalf. Before we start work on your accounts, we will thoroughly check the bookkeeping to ensure that there are no mistakes or omissions.
From your bookkeeping records we then produce a set of ‘working papers’ which will be used to make all the necessary calculations required to turn the bookkeeping figures into a full set of accounts.
Your accounts will then be passed over to another Senior Accountant for them to double check all work, and produce a series of recommendations for you if any have been found. These recommendations can be things like whether or not it is beneficial for your business to be VAT registered, a recommended change to the structure of your business or even things like whether or not a pension review would be beneficial.
Your accounts will be produced using our standardised professional template and will be presented to you in either paper format or as a PDF for you to review them. You will then be given the opportunity ask us any questions you may have about the figures given and anything else you are unsure of.
Once you are happy with the accounts, and any amendments have been made, the tax return is produced and submitted to HMRC. It’s as simple as that!