Real-time accounting vs historical accounting
02 Feb 2016
If you are currently looking for an accountant, you will no doubt come across a lot of firms offering expert advice from experienced accountants all of whom claim they can assist your business for a reasonable fee. It can be very difficult to establish who really would offer you and your business the best support. At the Tax Smart Group, we take a unique approach with our clients’ accounts which we believe provides the greatest benefit.
All of our clients are given access to award winning and popular cloud based bookkeeping software Xero completely free of charge. If bookkeeping isn’t in your remit – don’t worry, we can do it for you. We can also prepare monthly or quarterly accounts for you.
Access to timely financial information gives your business several advantages over your competitors in three key areas, as outlined below:
Both personal tax and corporation tax falls due for payment months after your accounting year end. Without having an accurate idea of what the tax bill is going to be, business owners can be hit hard with an unexpected high tax bill. This can be particularly challenging if following a year of high profitability, a large tax bill falls in a year where for one reason or another, cash flow is very tight.
Monthly or quarterly accounts not only allows us to estimate your tax bill – so you don’t get any nasty shocks – but advise you on how to reduce the tax bill through various methods including research and development tax relief, pension contributions and capital expenditure.
Some businesses only have their bank balance to judge their actual cash position. This does not take into account debtors and creditors which may be significant. Business owners, upon whom a huge list of demands is placed, can easily lose track of their firm’s debtors and creditors. Regular bookkeeping keeps a constant record of how much money is owed to and by your business, and thus you will know what your true profit figure is. This helps you keep tabs on your cash flow and customers who might not be paying you on time and need chasing.
If your work is of a seasonal nature, only knowing what’s currently in your bank account will not give you the assurance you have enough funds to cover your overheads during the quieter time of year.
Grow your business
The biggest threat impeding a business’s growth is cash flow difficulties. Accurate bookkeeping information tells you exactly what the business’s income, expenses and profit are, upon which reliable cash flow forecasts can be drawn up letting you plan financial outlays and anticipate the needs of your growing business. Moving to larger premises and hiring staff cost time and money and if done too soon, waste the business’s resources, but if done too late, cause a great deal of stress and disruption to your organisation.
Timely management accounts may also be demanded by banks as a condition of being granted a loan.
If you would be interested in learning more about how we can assist your business, please do not hesitate to contact us on firstname.lastname@example.org