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8 Ways To Select The Right Accountant

8 ways select an accountant able accountants walsallDuring your selection process, when you find a good accountant they’re often worth sticking with. You get to know them and they understand your business so each year you can both build on existing knowledge and relationship rather than having to start again.

But if you need to first find such an accountant, whether you’ve never had to instruct one before or it’s time for a change to who you usually use for whatever reason, then it’s important to make sure you make an informed decision about who this is rather than just the easiest option. We’ve therefore come up with 8 basic ‘checks’ to go through in your selection process to help decide who will be the best accountant for you:

1. The Cost

An obvious one I know, but it’s the total cost you need to consider after all the little extras and unknowns. So check out if there are any additional costs or expenses due, and if they charge VAT which will be an extra 20% cost for you unless you’re VAT registered to recover this back.

You may also need to check the timing of their invoices whether all at once at the end or in phases, and how quickly they will need paying. You could even look at some form of ‘bonus’ or the final payment being dependent upon their performance, although be careful this does not come across as too picky.

2. Their Regulation

Make sure you know how they are regulated, and then check it out with the regulatory body. Even if a firm of accountants are regulated by such and such a body, then still check whether the individual accountant dealing with your matter within the firm is suitably qualified as well.

3. Some References

Ask for some references and then check them out. Make sure these are real-life ones in a similar position to yourself, and not just general testimony-ones within marketing blurb.

4. Their Insurance

Clarify how they are insured as a firm so that if there were any mistakes that caused you a loss then this insurance could cover this.

5. Terms & Conditions

Always check the small print before you sign. Ideally get someone qualified like a solicitor to check, particularly for larger and longer term instructions, and make sure you actually understand the gist of what they’re trying to say.

6. The Size

The range of sizees of an accountancy firm can be vast, right from an individual accountant sole-trader to a large international firm. There are pros and cons to each type in terms of the level of service, attention given to clients, and back-up resources received, so make sure it’s clear what these are.

7. Their Branches

Check out how many branches they have and where they are. They may be regional but have numerous branches in local towns, or only a few on a national scale and a regional one happens to be in your town.

Also, check how long these have actually been integrated into the firm as often there are take overs with other firms to bolt-on numbers and appear bigger than they actually are.

8. Other Services

Makes sure you understand what other services the firm do. Even though these may not be needed by you now, you may do in the future in which case it's worth knowing that these are available if needs be.

However, don’t assume the same firm will automatically provide say bespoke tax advice if they have just been doing your book keeping, still shop around and ask the firm for a definite quote.

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The 3 I’s Of BEST Businesses Instruction

3 is instruction able accountants walsallIn our expereince of clients finding the right local accountant in Walsall, and even after the process of finding and selecting the right firm there was the question of how they were correctly instructed and then information supplied to them. One of those tasks we all assume is straight forward, and to some degree should be, although in reality it does require thought into how this is done so that the expectations between yourself and the business on both sides are clear.

Other Non-Accounting Businesses

Infact the lessons from these can be applied to any business really not just a firm of accountants, and can be boiled down to 3 simple points – all beginning with the latter I to keep nice and simple, and all showing a different aspect of that ever-so-important ‘paperwork’ to get the instruction and service right from the start.

1. The Instruction

That very first confirmation in writing with the local business to instruct them to carry out whatever you want them to do. The golden rule is for it to be in writing, and as clear as possible. And remember that it’s the quality of the information that’s important rather than the style or even format of information – so an email referring to the correct points is more effective than a lengthy headed-paper letter that misses things.

Make sure you go through the Terms & Conditions both the unique ones you have agreed for your instruction (and clearly detailed) but also those standard T&Cs often in a lengthy small-print somewhere but worth wading through. All it takes is just one change that’s needed for your requirements and you can simply ask to have this noted as an agreed amendment in your written instruction.

It’s also worth taking a step back from all the micro detail and make sure it has logical steps in there – so being clear who supplies what info, for someone to then supply a result or ‘draft’ in whatever times frame and format, for other steps to agree changes and a final version.

2. The Information

Make sure you know who needs what information to get on with the instruction. Typically this will start with the client providing information to the business so they can begin their work, for them to then provide results.

So with an accountant there will be various documentation such as invoices and receipts, bank statements and summaries, and files of related documents – but also things you may take for granted like access to online accounts and whether these are released, and whether the information needs to be hard-copies sent in the post or hand delivered or whether you can simply attach in an email or even give online account details to access as and when.

3. The Invoice

The dreaded part where you have to pay and which seems straight forward, but make sure you understand right from the start how this will be issued. For example, whether there will be VAT added, which will be another 20% automatically on the charge if you’re not VAT registered. Plus, check that there are no others on the way as well, maybe interim ones or added ‘expenses’ or disbursements’.

Even the timing of these need to be understood, whether just one invoice at the end of the work and how long you have to pay it, and whether they will be phased through the job. Therefore don’t rush, get the 3 ‘I’s sorted right at the start of the instruction.

The 3-Prong Attack

After you have the basic terms agreed for your accounting or infact any business need, then don't stop there. Make sure the detailed is irnoned out so it doen't come back to bite later on. 

Get the instruction clean, the information supplied, and the invoice issued. 

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10 Popular Accounting Services To Remember

10 accountancy services able accountants walsallAs you're looking for local accountants in Walsall, it's important to understand the range of services actually on offer. You may have one particular task in mind that they need to help you with, maybe your annual company accounts or some VAT advice, and not realise the other range of services on offer. Some of these you won’t need now of course, maybe later on, although some you may need to be thinking about and acting upon now.

One of the best ways to practically understand this is to have a consultation with an accountant (ideally free of charge) , and use the opportunity to explain the bigger picture in your and your business’ accounts to then narrow down what the accounting issues are. We’ve come up with a few areas of expertise to get you thinking about what to check with an accountant:

1. Bookkeeping

In short, this is keeping a record of what your income and expenditure is, which can then be used for whatever accounting services. It’s a task that can be straight forward to do yourself, although an accountant can first help to explain what the correct and most efficient procedure is for doing this, and secondly actually help carry out as it can be time consuming.

2. Preparing Accounts

What you mostly expect from an accountant, an official set of often yearly accounts for maybe statutory purposes, and maybe say year-ends for companies, and can include the two popular formats of profit-and-loss and balance-sheets.

3. Submitting & Filing Accounts

Once the set of accounts are completed these may need actually submitting to authorities such as HMRC and Companies House. This could be something you want to do yourself as it can be easier now with online accounts, however also something worth passing over to the accountant as a lot of the preparation is actually online as well (e.g. tax returns).

4. Tax Returns

Preparing your annual tax return, and then processing any payments or credits and changes. Even if you prepare the actual returns yourself, an accountant can help with the strategy and what costs/income can and can’t be included.

5. Financial Advice

This can simply be general advice on how to more effectively operate your accounts and business the most profitable way, including different legal entities to trade as, and whatever allowances can be included.

6. Payroll

Processing the salaries and other costs/expenses of staff and employees.

7. VAT Returns

If you’re VAT registered than you will need to prepare quarterly VAT returns of income and output VAT and process appropriate payment/credits, and deal with any queries resulting from.

8. CIS Subcontractors

Dealing with any accounts and tax implications for any applicable sub-contractors.

9. Overseas

If you have any overseas income and investments that need accounting for correctly, particularly for any tax implications.

10. Capital Gains Tax

Aspecific type of tax that can have large implications longer term, particularly when you look at what Capital Allowances are permitted.

This isn’t an exhaustive list, but can help get you thinking of the possibilities.

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Make Sure Your Business Property Costs Are In The Accounts Correctly

property costs able accountants walsallSurprisingly a lot of businesses rent their property, rather than own the property freehold as you often find with people’s homes. There will often be a lease or licence in place with a landlord and rent or licence fee being paid for being able to occupy the building and trade.

This will evidently have an effect on the accounts of any business, particularly by the nature of it being rent or fee being paid rather than say a mortgage payment which is going towards their own freehold property as an asset of the business – this ‘rental payment’ will therefore need correctly accounting for both in any profit-and-loss plus any balance sheet of the business.

It’s also important to consider all the other associated property costs which a good local accountant can help advice on. Right before any lease starts there will be initial costs to consider whether survey or fit-out costs, or reduced outgoings through say a rent free period being agreed right at the beginning of the lease.

Check the Lease & Legal Documentation

During the lease you’ll need to carefully look at the running costs of the business in the property such as utilities, insurance, service-charge, and general repairs and maintenance. In commercial property the business often incurs more of these costs than in residential properties, which will need budgeting for.

Even at the end of the lease there will be exit costs including any outstanding repairs and dilapidations, and balancing service charges from the landlord which should go towards any shared costs in the building. On the plus side though, these could be credits due back if the service charge has underspent, or if you look closely into any insurance premium you’ve paid the landlord then you may be able to receive a credit back from the point of you leaving to the end of the policy.

The lease or licence taken by the business therefore needs carefully agreeing, using a combination of both property surveying and accountancy advice to help budget the true overall costs of the property and how they are accounted for.

Helpful Lease Templates

Here are a few standard lease templates that you can begin with, and although these can be free or have a small purchase costs to save legal costs in drafting from scratch, you still need separate property and accounting advice to then tailor these to your own requirements and accounts:

1. The Model Commercial Lease – a variety of lease templates for different types of property and businesses, free of charge.

2. RICS Small Business Retail Lease – this is through the RICS who are the regulatory body for Chartered Surveyors, who also provide a supplementary guide called Code for Leasing Business Premises.

3. Law Society Business Lease of Part – this is through the Law Society, and although there is a charge of £27.50 this is often used as a good bench-mark as produced from such an important organisation in the legal profession.

4. Meanwhile Lease – a little different, through a Community Interest Company.

Get The Right Accounting

Whatever property interets you have, make sure you're correctly accounting for it. With property beiung such a lareg cost and asset, then it's even more important to make sure you don't have ansy nasty surprises later down the line.

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Are Your Web Developments in the Correct Tax Bracket?

tax bracket able accountants walsallOnce upon a time HMRC used to consider websites as pretty much lumped in with marketing and/or IT costs however, in our ecommerce relevant times, now they're being categorised much more in line with their full finance generating potential.

In order to now correctly categorise costs incurred on your site you should be using your business accounts section when it comes to tax year end balance sheets i.e. profit-and-loss or expenditure.

If you're a small business then web development projects such as redesigns or initial start-ups probably won't be too effected by the new HMRC initiative although, it never hurts to know what's going on so always check with you accountant first to ensure you're staying in line with the tax man.

If you'd prefer to do your own research or you just want to know the essence of the new HMRC policy then check out the 3 step plan below and see how web developments may effect your financial future.

Step One

Capital-expenditure and revenue-expenditure are the 2 different accounting methods that you need to get a general understanding of prior to learning where your web developments fit in with your end of year tax statement.

Capital-expenditure takes into account buying something of value that has the potential to create the same value or change in value in the future. For example: buying a motorbike gives you something of value that can again be sold but probably at a depreciated price over time.

Revenue-expenditure basically includes costs that are incurred that are necessary to do business. You won't see much value in them after they've been used and will just take your income in order to produce your yearly profit-and-loss margins. For example: buying the petrol required to help your motorbike get you to work and back.

By recognising both of the above methods you can then deal with them individually and incorporate the results into your final figures to show on the overall balance sheet.

Step Two

After you've learned the difference between revenue and capital expenditure you can divide your web development costs between both. As HMRC perceives your site as an asset that holds value and may increase value in the future this will fall into the capital-expenditure bracket and become known as enduring assets. This is especially appropriate if the expected net income for your site comes in higher than the development and design costs.

If you've only tweaked or added to certain parts of your site or just spruced up the overall feel then you're probably more than likely to have fallen into the revenue-expenditure section as the general asset of your site hasn't changed, you've just incurred costs due to day-to-day running and maintaining your site.

Step Three

Differentiate between both capital and revenue expenditure costs and decide which will change the way you calculate your taxes in months to come. Best advice if you're unclear about which category your website designs fall into is to talk to an accountant or a recognised bookkeeper.

Note: In general HMRC only consider redesigns and web development projects to be considerable when they top the one thousand pound mark or when there's a remarkable increase in online sales boosting overall business profits.

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