Welcome
We pride ourselves on being a leading independent firm of Chartered Accountants and Tax Advisors, providing clients with practical and realistic business advice. Not only are we committed to a high standard of service in accounting and taxation matters, we aim to provide our clients with information that may be important to the running and development of their businesses through advice on a wider basis, helping them to achieve greater efficiency, profitability and cost reductions.
With specialised consultants and professional staff, our clients are located in and around the Manchester area. Our aim is to provide comprehensive, Fixed Fee accounts and taxation services to small and medium sized businesses; this includes family owned companies, contractors, partnerships and sole traders.
Financial Reports: How to Make Them User Friendly
It goes almost without saying that the financial reporting of a business is of key importance to those who use such reports in the process of their decision making. Most business people understand just how much rests on the assessing of such reports, anything from whether or not they get a bank loan, or bag a large investor, to how much tax they pay at the end of the year, so, taking their importance as a given, are there ways to make the financial reports your business produces work better for you? How can these vital reports be improved to make them more user-friendly and therefore pleasing to the end user?
Cautious.
There will almost certainly be parts of the information you give that you have had to estimate; obviously you cannot ever be one hundred percent accurate with financial predictions, but the information still needs to be provided, in these situations it serves everyone well to provide conservative estimates; guard well against over-optimism in figures that are yet to be seen.
Tailored.
Although there will without doubt be someone for whom you are producing a particular financial report, who they are can differ widely; it is important when putting your information together to remember who will eventually read it, because there may be a chasm of difference between how, for instance, an accountant views financial information and how a potential investor might. It is worth bearing in mind that not all of your readers will have the same skill-sets or experience.
Dependable.
It matters not at all who is going to be using the information you provide when it comes to being honest about the facts; whoever reads your report needs to be able to trust that everything they see is completely candid and not fudged or polished or padded in any way; apart from the obvious problems reporting in this way could bring, you cannot rely on the right decision being made if the decision is based on erroneous info.
Pertinent.
Keeping what a report says on track and applicable to the reason for producing it is pretty vital; there are of course many types of financial report and not all concern the same area of your business’ finances. Try to focus on exactly what the report is aiming to say and steer away from extraneous or irrelevant stuff that could get in the way of the heart of the matter.
Comparable.
Your reports will not exist alone in a vacuum. Each time that your business produces a financial report it joins all of those that have been produced before and will be produced in the future, not just by your company, but by every other business in existence. Professionals whose job it is to utilise financial reports will sometimes need to compare the current reports with your business’ historical reports and perhaps also with those of other firms. To do this, there needs to be a certain uniformity about how the information is presented and a consistency to what is included. There are of course official guidelines laid down by the accountancy profession to help with this, and it is important to follow these with care.
Bookkeeping Courses – Choosing the Right One
When you decide to take a bookkeeping course you should consider some aspects of the course such as the faculty, the accreditation, the course material, as well as the certification. As you may already know bookkeeping is the recording of the financial transactions for a business. The role of a bookkeeper is vital no matter how small or large a business is.
By taking a bookkeeping course you will get the opportunity to learn about basic accounting information and how to process financial transactions. Many courses will reward you with a certificate and qualification. In order to be a successful bookkeeper you should be focused, detail-oriented and of course you need to enjoy working with numbers.
The first thing to consider when looking for a bookkeeping course is to check its accreditation. People specialised in this field have reviewed the accredited courses offered by the various colleges and other institutes. The administrative and the academic policies of the course need to meet certain standards. Moreover, the colleges and other institutes can sometimes offer you access to some of the government aid programs available.
When you choose your bookkeeping course you need to check the qualifications of the teacher or instructor. You should make sure he or she is a professional in their field; for instance, is the teacher or instructor a qualified accountant or bookkeeper? You should take your time when investigating the teacher and their credentials prior to selecting a bookkeeping course.
There are bookkeeping courses available from numerous career and community colleges or institutes. You should read the description of the course carefully and make sure the material is relevant and up to date. The bookkeeping course should use the most recent software versions and it will need to be based on the current legislation.
The majority of the bookkeeping courses available usually lead to a bookkeeping certification after they have been completed. This is a great way of getting your skills recognised. You can also take other courses in the future, such as inventory or payroll, in order to broaden your knowledge and general bookkeeping experience.
As a bookkeeper, you will be responsible for the entry- level accounting and support; maintaining the financial records and creating accounting reports at the year end. The owners of the business are likely to depend on all this information you provide when they are making any financial decisions. In essence the bookkeeping course you finally choose to opt for should be relevant to the role you are looking to fill in a business and should also result in a qualification that is professionally recognised.
Business Accounting – Brief Overview of How to Read a Balance Sheet
Accountants in Manchester – Business Accounting Basics
A company’s financial standing is reflected in its balance sheet, which reveals the exact status of the company in the current market conditions. This important document is also referred to as a ‘statement of financial position’ and it summarises many of the important details concerning a company.
If you are planning to invest in a small business or become a shareholder, then it is very important you understand the basics of how to read a balance sheet, because it is this report which contains the vital statistics and the precise details of the financial position of a company. A balance sheet generally details the assets, liabilities and the net worth of the company at the end of a particular period. Acquiring knowledge only about a company’s profit is not enough to identify how well it is doing. You need to analyse the balance sheet along with the profit and loss account and the cash flow statement in order to get a better understanding of how well a company is performing.
A balance sheet is structured in such a manner wherein the company’s assets should be equal to the liabilities’ and the shareholder’s equity. This is the equation on which the balance sheet is created. One portion of the balance sheet is entirely dedicated to the company’s assets, which includes current assets and fixed assets, whereas the other portions contain the liabilities and the shareholder’s equity.
Usually the assets are mentioned in the descending order starting with the most liquid one and then the list narrows to the least liquid assets. Basically there are two types of assets, namely current and fixed assets. Current assets have the capability of being converted into cash quickly, within a year or less. Accounts receivables, inventory, cash and cash equivalents are included in the current asset category. Cash equivalents are considered the most safe and easily convertible assets. There are assets which take a longer time, more than a year, to be converted into cash and these ones are referred to as fixed assets. They consist mainly of tangible assets such as buildings, machinery, etc…, and non-tangible assets such as patents, goodwill and copyright.
What a company owes to its creditors and outside parties constitute the liabilities of the business. These liabilities can be further broken down into current liabilities (to be paid in less than 1 year) and long-term liabilities (repayable more than 1 year). Current liabilities include items like trade creditors, whereas long- term liabilities include items like long-term bank loan balances. Lastly, the shareholders equity is the total of all the profit and reserves of a company plus the share capital issued.
A balance sheet basically represents a ‘snap- shot’ of a company’s assets, liabilities and shareholders funds at a point in time. If a balance sheet is positive at end of a period this is generally a good sign and can indicate that a company is financially sound. As stated above, the balance sheet can tell us a lot about a company’s make-up but it should always be read and interpreted along with other financial statements before any important decisions are made.
Capital Gains Tax – The What and the Why
In the UK when we profit from selling something, or even from giving something away, there is a tax attached to that profit; this tax is called ‘Capital Gains Tax’ and every time we dispose of things like shares or property there is a chance that we may need to pay it.
When we get rid of an asset and make a profit, whether we sell it, gift it, put it into someone else’s name, swap it for something else or receive a payout in lieu of something that has been stolen or destroyed, the profit that we make may be subject to Capital Gains Tax.
However, the assets subject to CGT do not include our personal car or the home where we live or any personal possessions up to £6,000. As well as these exceptions, there is also an amount set each year, up to which we are allowed to profit before Capital Gains Tax kicks in; this amount is known as the ‘Annual Exempt Amount’ (for 2010-11 it was £10,100 per person).
Capital Gains Tax is currently charged at 18% on all gains made. It is important to remember that disposing of assets and making gains can happen at all sorts of points in one’s life when there was perhaps no intention of making a profit, for instance, if you separate or divorce and belongings are moved between you and a financial gain is made Capital Gains tax will be payable on amounts over the ‘Annual Exempt Amount’.
Capital Gains Tax was introduced to prevent those of us who would otherwise escape paying tax on taxable income, by converting it in to tax-free gains; the Capital Gains Tax means that this income is also included in our taxable income. This tax tends to hit those of us selling second homes or stocks and shares hardest, as it was designed to harvest revenue from the profit made on such activities.
Increasing Capital Gains Tax is often a popular choice when governments are looking to raise revenue, perhaps because it was traditionally seen as the tax that affected mainly the well-off, who could better afford the extra burden, however, nowadays it tends to be pensioners selling second homes to fund their retirements or ordinary people who have invested in shares as a way of saving that are affected the most.
In our current economic climate, it looks probable that our government will need to take drastic measures to raise money and the possibility of Capital Gains Tax increases is looking more certain; on top of any increase there is also the option of lowering the ‘Annual Exempt Amount’ and setting it at a level that spreads the net wider catching more tax payers in it.
There are however, ways to reduce, escape or defer Capital Gains Tax in some cases, so it is worth sitting down with your accountant to explore the options available to you, a professional tax advisor will be able to explain what if anything you can do to lessen the amount of tax you might have to pay.
UK Inheritance Tax – The Basics
Accountants in Manchester – Understanding Inheritance Tax
Whether one is a chipper young thing still living with a belief in their immortality, or a more mature individual looking to the winter of their years, considering what will happen once we’ve gone is never a pleasant thing. Most of us will leave any planning that’s needed right until the very last moment, simply so that we don’t have to think about the whole business of death.
Unfortunately when it comes to some things such tax, not planning can waste a lot of money that could have been saved. In the UK we are subject to many different taxes, some attached to our working lives, some to our shopping trips and one in particular attached to our deaths.
Inheritance Tax comes into play when someone dies and their ‘estate’ is valued as being worth over the threshold set by the Chancellor (for 2010-11 this was £325,000). Someone’s ‘estate’ comprises of any cash in bank accounts, investments, property and businesses, and so even a moderately well-off business owner’s estate could be effected. When your estate is valued over the threshold set, Inheritance Tax is payable at forty per cent on the amount over the threshold.
Gifts and trusts made during a person’s lifetime are also subject to the tax, unless made at least seven years before they die, and so it is not possible to avoid the tax by simply giving everything away prior to death (unless of course you are happy to live without your cash for at least seven years in order to benefit your heirs!) There are ways however that gifting can lower your Inheritance Tax bill, if it is done within HMRC’s rules, so it is worth sitting down with an accountant to see what is possible.
Even if an estate is valued over the threshold, there are situations when Inheritance Tax does not have to be paid for instance:
When an estate goes to a spouses and/or civil partner it is usually exempt from Inheritance Tax, as are wedding gifts to others, although it is important to note that any wedding gift given must be genuine and not for profit.
The tax is also not usually payable on gifts bequeathed to UK registered charities, and if the deceased owned woodland or National Heritage property there is usually some tax relief available.
It is obviously important that you make a will, to prevent things happening to your estate that you had not intended, but before you do, it is important to get some good professional tax advice. If your estate is likely to exceed the threshold set by the Chancellor, sit down with your accountant and discuss your options, there are ways to lower potential Inheritance Tax bills after you’ve gone that stay within the rules, but you really do need a professional to explore these for you.
Once your accountant has given you the options and you have made your decisions, sit down with your legal advisor to put everything in a will. Forcing yourself to face the subject of your estate after your death, could save your relatives and other beneficiaries thousands of wasted pounds.