Often the normal process is that businesses ask Accountants to complete their year end accounts and tax returns because HMRC and Companies House demands it. In fact, if you do not file on time, you will be fined and maybe struck off from acting as a Director.
Completing them this way, doing them because you have to, is basically a conspiracy between the Government and Accountants. We both get paid and you as business owners get very little out of it. You probably put them in a drawer and do nothing with them.
We would like to propose a different way. Although you have 9 or 10 months to file, dependent on whether you are limited, a sole trader or partnership . We would recommend you coming in earlier rather than later. We will contact you from month two. Let’s say that your year end is March, we would contact you in the May. You will probably still be waiting on bank statements and a last trickle of invoices in April.
We suggest coming in earlier for many reasons.
- When we are discussing your accounts, it is a relevant conversation. Meaning that we can help, sooner rather than later. If you come in around deadline time, in all honesty it is old news. If it is 9 months after the year end some of the transactions and decisions that you have made throughout that year could now be 21 months old.
- Preparing your annual accounts, corporations tax return and self-assessment returns earlier will mean that you will know well in advance how much tax you owe. Completing the annual accounts and tax returns earlier does not mean that you pay your tax early. Although you could and HMRC will pay you a bit of interest.
- If you are due a tax refund, then by filing Annual Accounts and Tax returns early, this would mean that you would receive your tax refund early.
- Filing Annual Accounts and Corporation Tax Returns early could help your credit standing with suppliers. If for example the previous year’s annual accounts were not so good, this may have affected your credit terms. Filing an improved set of accounts can vastly change this. Improving credit terms with suppliers will improve cashflow and ultimately profit margins, should you now be able to buy in bulk, at a discount and on longer payment terms.
- There is also the possibility that you had a worse year for some reason, and you may not wish to file early. That is fine, we can still complete the annual accounts and corporation tax returns, letting you know where you stand but delay pressing the final button to file until nearer the deadline.
We also recommend that wherever possible the self-assessment tax return should be completed at the same time. Thereby by giving you a full picture of your tax activities throughout the year and the tax suffered, tax owed to HMRC.
For Footprints, these are a given, but we would like to do more. We strongly recommend that Annual Accounts should not be a process where we communicate with you annually.
At Footprints Accountancy we are proactive. You will be invited to meet once per quarter, although you do not need to wait for the invite. You can come and see us and whenever you need to.
You may benefit by this in a variety of ways.
This will allow us to assist you with tax planning throughout the year, rather than just after your year end. Often this is too late, for example with purchase decisions that you have already made. Let's say you purchase a car; this may not have been done in the most tax efficient way. Seeing you and your accounts afterwards, is often after the horse has bolted. Talking to us more often, will help.
Do we need to make some tax decisions prior to year-end, we often see businesses a month or two before year end, to help make some expenditure decisions and thus reduce tax.
Profit margins are key, they always are. However, we believe that with the current economic climate, margins are more important than ever. Do you know and understand your overall profit margins? Do you know your profit margins per service or product? Are you focussing on the correct sales?
Cashflow - Cash is King. We know it's a cliche, but it is so true, and it is now more pertinent with a recession looming. Are you having problems getting paid, do you have a debt collection policy, are you accounts up to date and bank ready, should the need to borrow arise?
Do you want to grow? We can help with growth strategy, business planning and resources.
Do you need to borrow, either for growth, assets or purely cashflow. We can help with preparing management accounts and forecasts for the bank and help with referrals to our bank of lenders.
Have you moved in to the 21st century with regard to financial software? If you are VAT registered, then you are now definitely on some sort of financial system, for example QuickBooks or Xero. But are you using it to its full capacity? Are you purely inputting your receipts so that they are in there? Or are you breaking things down so that the data helps you make good financial decisions. Moving on past the initial software, there are 1,000s of apps that can integrate with QuickBooks, Xero and others to further support you, to make things, quicker, easier and help you understand how your business is doing at any given time. We are not suggesting that you take on thousands of apps, but the right additional one or two for your business can be life changing.
Do you need any business advice, maybe it's serious, maybe you just want a chat? There will be things we can help you with, within Footprints or you may need a referral to one of our trusted partners for example debt collection, HR, H & S, the list goes on.
We think the point here, is that we do not want you to be a stranger. The more we know you, the stronger our relationship is, the more we can help you within your business.
Need help with your annual accounts?
Contact us today to learn more about how we can help you with your annual accounts.