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HDA - The Independent Financial Advisors - Cheltenham
'Virtual but real' Accounts department
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Welcome to our latest news area. Here you can find out about a range of topics from how we can best help to legislation changes.
To get started read our latest articles below or select a topic from the left hand menu.
Announcing our new venture is Robin Etherington, Managing Director of HDA Independent Financial Advisers.
'For many years our Financial Controller has been running the accounts and payroll for not only our IFA business but also a few other businesses in Cheltenham introduced to her by our founder, Hugh Davies. When she retired last year we took the opportunity of recruiting an experienced replacement who could expand on this function and set up a new department here in our Southam offices. Alison Peake accepted this post and has been working hard to put the new business venture together. We are now ready to launch and Alison and her team are looking forward to the challenges ahead.'
HDA Business Solutions launches its' new website on 19th September 2011 and Alison is looking forward to working with new and growing businesses in the Cheltenham, Tewkesbury and Winchcombe area.
'Over the years I have helped many businesses organise and run their bookkeeping and payroll systems so that they work efficiently and produce meaningful management accounts that are understood by the business owners. The challenge is to really understand the business and find the solution that works for them, not just produce financial statements the Accountants want to see.'
For a free, no obligation review of all your accounting needs call Alison Peake on 01242 514563 or email alison.peake@hda-businesssolutions.co.uk
Financial Accounts
Most business owners are familiar with the terms ‘Profit & Loss’ and ‘Balance Sheet’ even if they don’t necessarily understand them. These are what are known as the Financial Accounts of a business. These are prepared on an annual basis to a defined date and for most businesses have to be submitted to HM Revenue & Customs for corporation tax purposes and filed at Companies House for public view. It is the owners’ responsibility to ensure that the business keeps accurate records and accounts and most businesses use the services of an accountant to produce the final version.
Financial accounts are a historical record of the performance of the business over the previous year and by the time they have been produced by the accountants can often be six months or more out of date. They are of use to shareholders, bankers, suppliers etc as they measure how your business has done compared to the previous year but are not of much use to the business owner as an indication of how well or badly a business is doing at the moment.
Management Accounts
There is no legal requirement to produce management accounts but the business owner would find it very difficult to maintain effective control of his business without them. Different businesses will have differing needs in terms of management accounts but most businesses would produce monthly or quarterly reports that analyse the most recent performance against forecasts or budgets that have been produced at the beginning of the year.
These reports can include profit & loss and balance sheet reports but might also include future sales, profits and cash flow forecasts as well as departmental or product analysis, fixed asset registers, employee records and trend analysis.
For a small to medium sized business who cannot afford to employ a Financial Controller these can be produced by a management accountancy service such as HDA Business Solutions in addition to the normal bookkeeping and payroll records you are obliged to maintain.
Are you up to date with recent legislation changes?
Additional statutory paternity pay (ASPP)
Additional statutory paternity pay (ASPP) is a new statutory payment, which came into effect for babies due on or after 3 April 2011, and allows parents to share the normal maternity pay allowance.
The earliest ASPP can start is 20 weeks after the child is born. In order for them to qualify, the child's mother must be entitled to receive statutory maternity pay (SMP) or maternity allowance (MA) in her own right. She must have returned to work and have stopped receiving payment for this.
ASPP is only payable during the mother's maternity pay period, which is the 39 weeks in which SMP would be payable if the mother had not returned to work. For example, if the mother returns to work after 30 weeks and has 9 weeks SMP or MA remaining for which she will not be paid, your employee can receive 9 weeks ASPP.
In addition to this the employee may also be entitled to receive additional paternity leave (APL). This can be for a minimum of two weeks and a maximum of 26 weeks taken in complete continuouse weeks and can be taken up to the child's first birthday.
Company Car Benefits
HMRC have announced the following changes to simplify company car benefit calculations for the 2011/12 tax year onwards and are therefore required for P11D returns made by the 6 July 2012 deadline:
How do I ensure my business grows profitably?
Cranfield University School of Management recently sent me a leaflet with ten tips to success for profitable growth.
By using a management accountancy service such as HDA Business Solutions you could help yourself achieve points 2, 6, 7, 9 and 10 in one easy step!
Letting go of the finances is often a difficult thing to do but surely having someone experienced and knowledgeable in the subject is better than muddling through doing it yourself. By agreeing the frequency of management reports and means of communication you can free up some of your time to work on the development and growth of your business knowing that you will be kept up to date with its cash flow and performance and that you will be notified immediately of any financial problems as they arise.
Daily, weekly, monthly, never? What is reconciling anyway?
Whatever system you use to keep your accounting records on it is very important to check your bank statement against it regularly. This is what reconciling really means.
Because of timing differences it may not agree exactly but you need to be able to identify what those differences are otherwise you may have errors creeping into your system or at the bank that won’t get resolved. You may think you have more money than you really do!
Start with your bank statement, a listing of all the transactions going through that account on your accounting system for the same period and last time’s reconciliation.
Tick off all the transactions that appear on both reports.
Then see what is left unticked on your bank statement. These could be:
Next see what is left unticked on your systems transaction listing. These could be:
You should now be able to list the known differences and reconcile your statement!