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Save on accountancy fees with better business record keeping

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Friday May 2, 2014 at 2:00pm
For many the fiscal year-end coincided with their company year-end meaning many business owners now face the challenge of drawing together all their financial information to hand over to their accountants so they can prepare statutory accounts. Not something business owners, in my experience, look forward to doing.

Whilst it may be too late for your 2013/14 accounts there are some things you can do now to make the process less painful this time next year, put yourself in a better position to manage your business finances during the course of the year and potentially save on accountancy costs too.

The secret is all in the records you keep.

Keeping better financial records in your business will help with the obvious things, like keeping HMRC happy by making sure you pay the right amount of VAT, national insurance and business tax. But it will also mean that you will have information at your fingertips when it comes to making business decisions: How will an investment in a new piece of equipment affect cash flow? Can you afford it or do you need to borrow? Are your costs under control?

Without proper record keeping you won’t be able to answer these questions because you won’t have a complete picture. You can look at the bank balance, sure. But will that alone tell you whether you can afford to spend an additional £20,000 on marketing? You can look at historical sales figures, but does that provide any indication of where sales are heading in the future?

We advise all our clients to keep detailed financial records – not only for the obvious things like all sales and purchases, full payroll details and so on, but also any records that will help monitor business performance against key performance indicators (read our blog Getting to grips with business information and KPIs for more on this topic).

Of course, there are tools you can use to help with financial record keeping; software programmes like Sage, Quickbooks and Xero online accounting software we use for our clients. Whatever you choose should not only be able to store your financial information but also provide powerful reporting capabilities.

All too often financial record keeping is seen as a chore, delegated to junior members of staff or treated as a one-off task to be undertaken immediately before handing over the books at the end of the year. For business owners who want real control of their business performance it should be seen as an important means to an end. By all means delegate the administration to someone junior, or to your accountant, but you should be the one setting the agenda, deciding what reports you require from your financial records and how frequently you need those reports. If you are not sure what these reports should be or need help deciding the KPIs in your particular business your accountant should be able to help you, if they can’t feel free to give me a call.

Andy Parker
Chartered Accountant Solihull

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Parker Chartered Accountants and Financial Advisors is the trading name for Parker Business Development Ltd (Registered No. 4116664), Parker Tax and Trust Ltd (Registered No. 06950353) and Parker Financial Planning LLP (Registered No. OC347027). Parker Financial Planning LLP is authorised and regulated by the Financial Conduct Authority. All companies are registered in England and Wales – registered office contact details here