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Personal Debt & Finance Survey

personal debt finance able accountants walsallA survey by R2, an organisation working with those facing insolvency, has been conducted in the West Midlands that sheds light on levels of personal debt and opinions on this. With the economy being what it is and living on credit becoming the norm for a lot of people the survey has revealed interesting viewpoints. The main findings are summarised below.

1. At least 50% of those interviewed are concerned about their levels of debt. The types of debt include mortgages, credit cards, loans and overdrafts. It is important to note that among this figure a lot of them will be adults with a low amount of debt but a high fear factor. Conversely there may be a lot of adults also interviewed that have a high level of personal debt but not much concern over it.

2. At least 25% of the adults interviewed forecast a worsening situation over the next 6 months (from the date they were interviewed) for their personal finances - a worrying situation. Clearly there are many that not only see no clear way to alleviating their debt but they also believe they will be adding to it.

3. Almost 50% of the adults interviewed have trouble surviving on the money they earn and making their salary stretch to the next payday. In tight situations the usual advice of simply taking extra care over the monthly budget is not enough for a lot of people, no matter how efficiently they plan.

4. Over 50% of those fighting an on-going battle to cover their bills from month to month believe that their struggle is due to rising food and energy costs. It would have been conceivable that the number one cause of such struggles would be one-off, unexpected expenditures such as car repairs.

5. Possibly due to falling inflation it is professionals and the younger in society who are more positive. Unskilled, older members of society are less hopeful that they have time in which to learn new skills to get through the competitive job market and stay afloat in these difficult times.

Budgeting and planning are still valid and important pieces of advice. The better one can plan and budget the more able one will be to absorb any unexpected costs and adhere to strict budgets.

With sites such as you can use the experiences of others and access help. Alternatively make use of local debt advisors to help sort through this confusing field. Whatever you do make sure you do not just go to your current bank, loan or mortgage advisor because they are familiar with them. Make sure you get some independent advice from people who are not looking to simply earn commission.  Instead make use of all your options and get a better overview of what is available to you.

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The Difference Between Profit and Cash

able accountants walsall cash profitIn the accountancy world this is a lot of talk about “profit” which is perfectly understandable since this is one of the main reasons the industry exists. While accountancy exists to identify where a business is making or losing money the business itself exists to generate profit. This profit may eventually be turned into hard cash to be used but it is important to remember that “profit” and “cash” are two entirely different concepts.

Your accountants work to highlight the profit or loss generated by your business as well as any assets or liabilities. The accounts should show all this in an easy-to-digest way that will make the bottom line easily visible and understood within a standard framework. There are international standards to which accountants can adhere to make the process easier when comparing and contrasting the details from one set of accounts from one country to those from another country. This is especially helpful if you have international branches or are simply looking to compare your company to one in another country.

Also this is helpful for submitting accounts for scrutiny by institutions such as Companies House, HMRC and banks. Anyone looking to ascertain the value of your company with a view to buying it or offering a loan will also want to see a set of up-to-date accounts showing the relevant information as readily available. Any good accountant will be able to provide this service in a standard format. Other less familiar standards or alternative ways of presenting the figures may be viewed by those concerned with the suspicion that you are attempting to obfuscate and hide the data.

A standard protocol can be very useful for businesses with a larger turnover with the more important data can easily be highlighted and imported to other reports and summaries. The information can be easily assimilated to show how tax has had an impact upon the profit margin or how the value of assets has been affected by depreciation, for instance.

However, businesses with a smaller turnover and workforce may be in a position where the figures on the page can really represent real-world cash. For such businesses it is entirely conceivable that there can be the amount of money in your account that is being shown in the bottom line of your accounts. On the other hand it can be a similar scenario as with larger businesses where the accounts may show profit but you may have no money readily available at the bank. Or your accounts may show a loss on paper but the bank statement shows that you have funds you can use.

If you are facing one of these scenarios you should contact your accountant and ask them to decipher the accounts. With their help you should gain a better insight and be able to not only understand their work but also understand your business. It may not necessarily be that your accountant is not being open or doing a bad job, they just need to help you to understand the lines of income and expenditure and be able to explain the cash-flow in your business.

It is often the case that simply following the money you can find the profit. Perhaps clients have yet to pay invoices. If this is the case, simply put some credit control measures into practise and send some reminders. This outstanding amounts can be included in your accounts but may not have actually been paid into the account and be available as disposable funds.

Perhaps you have had to pay some suppliers in advance for assets or services you are yet to receive. For example you may have had to pay for rent with a few months in advance, therefore your accounts are showing that three months of rent has left your account in one transaction. This is a common scenario and all you have to do is account for this in an appropriate way in your accounts.

It may be the case that you have outstanding invoices from suppliers. So your accounts will show that you have more money in the bank than you actually do. Once you pay the invoices the amount of excess money will reduce accordingly.

In conclusion it is a good idea for your accountant to adequately explain to you the difference between profit and actual cash in the real world.

Contact Able Accountants today for more help and advice.

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