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7 Aspects to Good Bookkeeping

bookkeeping tips able accountantsWe provide bookeeping services in Walsall and the wider West Midlands area for a range of clients, and often find various aspects to it being misunderstood or ignored. On the face of it, bookkeeping is straight forward and keeping an accurate tally of the figures in your books and in actual fact once the principle is understood it is a very routine task that various people can easily undertake. 
 
The challenge though is to first appreciate just what’s involved with this, therefore here are 7 pointers to help steer you in the right direction:

1. Understand Whether It Is Single or Double Entry Book Keeping

To save going into too much detail, check with an accountant the final purpose of the accounts, and which format is both needed and practical in your circumstances. Double Entry may mean bookkeeper gets more complicated but can help cross-check things nicely; this is where each transaction has two different aspects to it, with a debit in one ledger and credit in another ledger.

2. Realise the End Accounting Goal

So often a good set of figures and books will then help a accountant prepare accounts like profit or loss or a balance sheet for a particular accounting or statutory purpose. They can also be used to produce management and financial reports which can help within a business or organisation. 
 
Whatever the end goal, check at the outset what this is, as although the basic figures are the same the way in which they are presented along the way may change. In addition, you may need a Trial Balance and Ledgers at the end of the bookkeeping process ready for this accounting stage.

3. Make Sure a Matching Bank Reconciliation is Completed 

In short, every transaction you have in the accounts needs to match an actual payment transaction through your bank or payment method. So each bank receipt and payment needs cross checking and matching up nicely, with software available to help link these together more easily.

4. Don’t Forget Your Paperwork

In extreme circumstances a client can walk in the office with a carrier bag of receipts and invoices that all need matching up with the accounts! Each transaction, both an expenditure to a supplier or income from a customer, needs the right back-up paperwork to go with it, a job in itself if they’re not correctly logged and matched already. We blogged here about some practical ways of getting this ‘paperwork’.

5. Report on the Consequences 

Although this is more on the accounting purpose afterwards, this critical stage of getting the books in shape can help identify issues that need addressing. So whether that’s a VAT return to complete, a tax liability to resolve, or issues of arrears and what is owed to you by a customer or what you owe a supplier – these all need identifying sooner rather than later

6. Note the Income & Expenditure

Don’t forget that it’s that simple – to note what income you receive, what expenditure you incurred, and so what’s basically left. Be clear on what receipts and invoices fall on which side of the income/expenditure fence, and even look into basic accounting principles of debits and credits and a profit and loss account.

7. Understand How You’re Processing Things

So it may be a simple daybook, and ledgers for a supplier and customer that need manually updating and then checking. Or it may be using high-tech software and cloud based virtual services and systems to produce these. Whatever it is, make sure it’s not only right and cost effective but effectively used by people.

8. Assign the Right People 

It may be just the one bookkeeper completing changes, or it may involve others preparing them and then another checking and completing them. Both methods can work depending upon the circumstances, and the pros and cons of each need exploring. 
 
We often work with clients who are encouraging someone else within their business to produce the main books, and we simply assist say every year to check them. 

9. The Final Sanity Check & Tweaks

So the books are done and ready to roll, however those final checks and tweaks are always worth checking, ideally with a fresh set of eyes. After figures come through in the after-accounts, then check that these make sense and that there are no human or process errors. 
 
Also, final accounting changes like deprecation can help sharpen things up nicely
 
In summary, it’s important to know the process needed for bookkeeping, who will be involved, and what the actual tasks are. Once these are in place, then the actual books should be straight forward, with expertise at least every year helping to check them and then use them for all kinds of accounting and financial purposes.
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Record Keeping For Your Small Business

record keeping able accountants walsallBefore getting amongst the nuts and bolts of their accounting most budding entrepreneurs think that it will be easy to keep track of the incomings and outgoings of their small business. We’re here to let you know it takes more than having some updated spreadsheet software and having your bank statements for the last year to hand. To keep the accounting manageable for your business you need to take on board some understanding of the accounting basics. 
 
One of the major factors behind effective accounting is the ability to successfully keep records. This is harder than you might initially think and this article is going to show you some record keeping tips that will be easy to implement into your working days.  
 
1. It is vitally important to always keep records for your financial dealings and the first tip we suggest is that you set up a process by which your banking transactions are copied over to a spreadsheet. After a few months of diligent record keeping you’ll be able to use it as a tool for making accurate forecasts. Your bank statements and spreadsheets should be used for more than just records. 
 
2. Be sure to keep receipts for everything that you consider a business purchase so you can prove the validity of your figures to any authority that may ask for them. Remember that the longer you are operating your business the more likely it is that you will be audited and have your tax returns investigated. Before this would have meant keeping your paper receipts neatly filed away chronologically in a folder for easy reference. These days you can scan your receipt and store it all in the “cloud” where it will be more secure than on any desktop computer. With many retailers offering their customers the option of having their receipts emailed to them as PDF attachments it couldn’t be easier and there is no reason not to do it. 
 
3. Set aside a good amount of time each week to sit with your accounts and update them. You may find it difficult at first but the more you do it the easier you will find it to pick up the discipline. It’s always best to look at them when you’re alert and have time on your hands. Working on your accounts at the end of the day when you are tired can lead to mistakes. Mistakes in your accounts can have huge implications for your profits forecasts and lead to incorrect tax returns. 
 
4. Be sure to keep your business accounts completely separate from your personal accounts. If you’re running a limited company, even if it is 100% owned by yourself, you have to bear in mind that the money it turns over is not yours. Do not use business funds to make personal purchases. Payments to your business should go into a separate business account and you should take a salary, paid by your business, into your personal account. 
5. Regular checks on your business bank account will show you how your money is being spent and it will also allow you to find any discrepancies that could have an impact on the accuracy of your record keeping. 
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3 Tips for Getting The Right Set of Accounts

accounts copies 3 aspects able accountants walsallSets of accounts can be circulated very easily, particularly with current mediums like email and the internet and PDF copies of these. This can enable quick reference to figures and help speed up any urgent transaction along.
 
One downside though, is that this rush can mean the actual accounts are not correct versions which can be fully replied upon, something we see time and time again. They may help with indications of costs, but when it comes to authorised copies for a certain purpose then you can be caught short.
 
Therefore, here are a few simple pointers to spot to make sure you receive the right versions. These are actually straight forward and easy to identify once you know about them, however in the rush of any requirement these can be easily missed:

1. Correct Signatures 

This is definitely top of the list, particularly with digital copies that may be still in draft format, or the final version has been saved in this fashion but without a real human signature. There may even be the right names stated and dotted lines to then sign, but no actual signature. 
 
The correct way then is for the right person to sign these, and then ideally send the original copy (in correctly coloured ink sometimes as well), or at least scan in and send a digital copy of these.

2. Properly Dated

This tends to fall into one of two camps. Firstly, the actual date range of the accounts, often a year, and which in most cases should be accurate as the whole accounts have been based around this period. Therefore, if you do see a wrong date for this purpose, it is hopefully just down to a typo rather than the wrong period being assumed, but of course this needs checking. 
 
The second, and more popular one, is the date of any signature and authorised submission or agreement of these accounts, linked to the above point as well.

3. The Right Purpose

Again this may sound obvious, but make sure they have the right purpose in mind. Typically, you may have formal company accounts, but an accountant may also produce separate detailed income and expenditure reports, which can be helpful for more detailed reporting needs for a client. You may therefore have hold of lots of different types of accounts, therefore it being important to use the right set for the right purpose.

A Simple Check 

Therefore for any accounts you come across, particularly on an email and PDF copies, then quickly check that they have the right signature, date and date-range, and they’re for the purpose you need. 
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What Accountants Actually Do

what accountants do able accountants walsallIt can be a bit confusing for an average person to know what exactly accountants do. There are known financial tasks that the professionals do for a business but these many not be apparent for persons without a degree. Most individuals consider accounting to be a boring profession.

However, the fact is that accounting is a more vibrant career than what many people think. For any successful business, accountants play a key role. Like it is the case with good managers and top level managements, they ensure the smooth running of any organization. To be precise, it is the role of the accounting department to keep the finances of a company in order.

This involves maintaining the financial records, managing salaries and conducting audits to prevent embezzlement of funds. Careful accounting ensures that bills are paid in time, cash received is recorded and the profits of a company are shared with stockholders. In simple terms, accounting involves keeping financial records. Most people engage in accounting without knowledge. The most common form of accounting involves balancing a checkbook.

Any incoming money id added to the bank account while outgoing monies such as bill payments are deducted. After balancing your checkbook, you do not only keep what is earned and spent but you also become aware of the money remaining in your account. This helps you to decide on your future investment decisions. However, accounting for a company involves more than recording cash flows. It measures whether a company is making a profit, the cost of running the company and the value of the company at any given time.

This information can be used by the management of the company to know whether the company is making the right financial choices. Financial records such as the company balance sheet can help outside entities such as the government, potential investors, financial institutions and others to see how the company is doing. On top of reporting on the basic performance of a company, many accountants also offer specialized services. They work exclusively on taxes by offering their services as certified public accountants (CPAs).

They can also work within government agencies to investigate issues such as fraud, embezzlement and financial mismanagement. The professionals can help individuals or companies trace mismanaged or lost funds. As long as people are dealing in currency, there will always be a need for accountants. They record, report and track financial transactions and therefore, literally ensure bills are paid. This makes it possible for businesses of all sizes to make smart financial decisions.

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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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