For many smaller businesses keeping financial records can be time consuming especially if there are many transactions during a month but by using accounting software record keeping can be made much simpler.
There are many bookkeeping software programs available. Several of them offer customers the ability to customise them according to their needs. This allows you to have a simpler or more complex system for payroll or inventory, as required. Before choosing what bookkeeping software would best suit your business, it is important to consider who the bookkeeping records are for. For example, will they be used by the management of the company or an external accountant as the detail that is needed may be different. Another consideration is the number of transactions there will be as some software is more suited to deal with a larger volume of transactions.
The benefits of using accounting software that most companies find is that it is easy to keep track of the financial state of the company and straightforward to enter transactions into the software either at the end of the day or as they occur. Reports can usually be generated detailing how the company is performing so that action can be taken immediately if profits are falling, or new investments can be made if the company is performing well.
If you have a small business you may wonder if it’s really worth paying for an accountant as they aren’t cheap. However, a good accountant should always be able to save your business more than they cost you.
Accountants usually are knowledgeable about new procedures and tax rules and can help you navigate through the very complex financial world of owning a business.
Most accountants can handle all areas of your financial matters for you, be it payroll and pension payments to book keeping and tax returns.
A valuable accountant will be able to guide your business into being tax efficient and help you really make the most of your business budget.
Generally you would send your account all your receipts and invoicing information and they will collate the data ready to submit for tax purposes. They would then advise you what needs to be paid to HMRC and adviser when your next accounts need to be ready by. The account can also advise on what things within your business are tax deductible.
Even a small one man band really can benefit from a great accountant so do your research and spend time finding the right accountant for your business.
As the financial year has now ended, you are able to submit your tax returns online. Paper copies need to be submitted by October whereas if you are doing it online you will have until January 2023 to file your return. If you have paid tax and think you may be due a rebate, then you may wish to get your tax return filed as soon as possible in order to enable you to claim the money back.
Doing your tax return yourself may mean you are able to save a bit of money on accountancy fees but you do need to ensure that you know what you are doing and do it correctly. Mistakes could be very costly and even mean you end up in trouble with HMRC.
If your business is very straight forward and you have the same incomings and outgoings pretty much every month then you may decide to do it yourself. If however your business is a little more complex then you should seriously consider using an accountant. A good accountant can often give you advise and discuss things you can claim for that you were not aware of. They often can pay for themselves in the money they can save you in tax.
The main roles of an accountant are to record, process, analyse and prepare various financial and business-related reports. So, unlike a business finance manager who is focussed on the management of money an accountant is more concerned with record-keeping.
The skills and qualifications that are necessary for accountants are similar to those who work in the finance department and in some cases the two roles are undertaken by the same person. Accountants need to have a good grasp of accounting rules, tax and regulatory issues and demonstrate the ability to work with numbers and now also need a good understanding of accounting software. It is important at this point to recognise the difference between an accountant and a chartered accountant. A chartered accountant must be certified by a nationally recognised body. However, someone working as an accountant does not necessarily need to have these qualifications but for those wanting to progress in this field these formal certifications are essential.
Most accountants would be expected to have a graduate degree in a mathematical subject such as business, finance or economics. Additional courses covering accounting principles and tax law would be beneficial. Postgraduate certifications in these fields will be of particular benefit and add even more merit to the CV of an accountant.
If you are trying to manage more than one business or even if you are self employed and employed, you may find it hard to get the balance right. It makes sense that the job that pays the most is where you should be spending most of your time, but this is not always the case.
If you have two or more of your own businesses, you may struggle to split your time fairly between them all. Often as the business grows it can get to a point where you find that you need to employ or outsource some of the work to other people to free up some of your time. It can be hard letting someone else in to help you in your business as you may worry that they will not do it like you do or if they can be trusted but this is something that often you need to overcome.
It can be useful to sometimes segregate your days so that you work full days on one business and then others on your other business. This will allow you to really get in to the task in hand rather than having to keep dipping in and out.
Becoming self-employed could be the right step for anyone who has the necessary skills and experience that will be required to successfully run a business. As the recent uncertainty around jobs is taking its toll and people have seen the advantages of working from home many people who may not have contemplated self-employment are giving it serious thought.
Once who have decided on your business the next step is to choose a business name that is memorable and that reflects your business. You will need to register as a sole trader with HMRC so that they know you will be completing a self-assessment tax form and paying class 2 and class 4 national insurance contributions where relevant.
It is at this stage that it would be wise to seek the advice of an accountant as they will be able to guide you in terms of the bookkeeping you will need to undertake and any legal requirements you will need to fulfil such as having a business bank account. Setting up the bank account and any trade accounts for supplies if appropriate will mean that you are ready financially to begin your self-employed adventure. The accountant will also be able to advise you on any financial help that is available to new businesses that will give your new business an initial boost.
The new year is fast approaching and although your accounting year may run from April to April, January is always a good time to get everything in order. If you find that you are not very organised with your accounts for your business then you may choose to outsource it to a firm of accountancy’s or a book keeper. You will still need to ensure that you keep copies of the receipts and payments you make, but they will be able to manage the paperwork side of things for you.
Come January, lots of people will have to pay their tax and national insurance bills. Depending on what their profit was, this can easily rack up in to the thousands. It is vital that you try and save this money throughout the year so as not to end up trying to find a large sum of money just after Christmas.
If you are struggling to pay then you should speak to HMRC as soon as possible to see what can be done.
Now may be the perfect time to start working with an accountancy firm. It will allow them time to get to know you and your business before the task return i due next September.
If you have been self employed for a while or are looking to set up a new business then you may decide to set up a limited company. Unlike when being self employed, limited companies must have at least one director. Often people set up limited companies if they want to be able to employ people and to not have to have payments / loans etc against them as an individual.
Running as a limited company often gives your customers a higher level of trust and can make your business look more professional. It can often allow you to deal with bigger companies than you may be able to if you were self employed. But, there are some downsides.
Accounting often becomes harder when it comes to a limited company compared to that of a sole trader. You may have to pay VAT and corporation tax along with employee wages and contributions.
If you are thinking of setting up a limited company be sure to speak to a competent financial advisor or accountant before doing so and ensure that you have all your procedures in place before starting. This will make accounting easier when you do need to start filing returns etc.
It may be that for a long time you have wanted to set up your own business. Often, we work for others for a while and then realise that we actually want to have a go a being our own boss for a while. Setting up your own business can be risky if you have to invest a lot of your own money or if you have to have help from investors. You will feel under a massive amount of pressure to get it right in order to make your money or your investors’ money back quickly.
It is important when you set up your own business you have someone that can help you if you need advice or guidance. Sometimes you can get a business mentor. They will be able to give you broad advice on subject matters that they have some experience in.
There are some fantastic groups you can join to become a member of such as the FSB who not only can give you advice on general matters but also legal advice if needed. They have their own team of solicitors that you can call on when needed and staff who can help if you have to go through a tax investigation etc.
If you are an employer or responsible for other people in your job role then you need to ensure that you get the job at hand done without micromanaging people. Lots of people find it very hard to have a boss that is constantly watching over them and telling them what to do. If you do this, you may find that you have a high turn over of staff.
An employer does not need to be shouting all the time and micromanaging their staff in order to gain respect but they do need to maintain a level of professionalism and ensure that employees are happy and doing their job right. If you are generally a friendly person then you may find it hard to distance yourself slightly from your employees. It is easy to quickly become a friend which can then make it very hard if you need to be a bit firmer or discipline an employee.
There are some great courses for mangers to attend that can often be completed over a day or two. These courses are designed to help show you how to manage your staff correctly, improve morale and deal with disputes within the work place.