The Accounting Activity your business should be performing

I am not going to keep you waiting. The #1 accounting activity your company must perform is cash flow management. This activity is so overlooked by businesses that it is scary. The fact is lack or or improper cash flow management can lead to death of your business. It may sound dramatic but numbers don’t lie. 68% of small businesses perform no cash flow analysis at all. This results in many successful, growing and profitable businesses failing because they do not have adequate cash to meet the needs of their growing business. 

Research from stasticsbrain.com shows that 46% of businesses failure is largely due to financial reasons.Simplycashflow.com stated that 28% percent of small businesses states “cash flow as their biggest challenge.”Businesses who have cash management actives have a 80% greater chance of surviving, compared to 36% chance if you manage your cash yearly. So know that you have the numbers, let’s learn more about what cash flow management entails. Cash flow is the movement of money in and out of the business. Therefore, cash flow management is tracking, analyzing, and monitoring this movement on a continuous basis. This can be daily, weekly, or monthly. 

Cash flow management can be very detailed and involved. The purpose of this post is not to teach you cash management (because to do it correctly it will take way more than a blog post) but to get your wheels turning. I want you to assess your current cash management activities and come up with a plan to improve it. 

Payroll accountants is one of the most important part of your business. Contact us for payroll services in Birmingham and much more.

Ask yourself

Do I completely understand how to manage cash? What cash flow management activities am I currently doing? How often do I take time to effectively monitor and manage cash? What is the difference between profit and cash flow? I recommend reading the book Never Run out of Cash. It is a great book on how to manage your cash flow especially if you are not an accountant.

Advantages of Outsourcing Bookkeeping For Small Business

Simply bookkeeping is the recording of financial transactions. Transactions include sales, purchases, income, and payments by an individual or organization. Bookkeeping is generally performed by a bookkeeper. Bookkeeping should not be confused with accounting. Every business necessitates bookkeeping method.





If you have a small business, you will require a reliable, sequential and perfect small business bookkeeping services so that information is always available and reliable whenever it is required. Various companies today are making a go to outsource works to offshore destinations for the reason that it provides a more reliable and perfect method of handling small business bookkeeping.

Outsourcing companies who are dedicated to handle such professions for bookkeeping services use the best available technology solutions and accounting packages to distribute reliable results. There are various advantages of outsourcing your small business bookkeeping services. Outsourcing assures you that special concentration is given to your background operations and you can focus more on your core business.

Advantages of outsourcing bookkeeping services:

• Reduction in operating expenditure 
• High data correctness 
• Professionals with chartered accounting certifications 
• Practical and flexible approach 
• High Confidentiality and security 
• Improves customer service 

Provide most proficient and successful small business Bookkeeping and Accounting solutions

R R Accountants LTD outsourcing your small business bookkeeping method comforts you that you have a qualified bookkeeper who is proficient to manage your books in the most resourceful and productive way. They can simply find errors and recommend corrective actions right away. Also if you prefer to outsource your small business bookkeeping method, you are secured that your books are constantly reconciled monthly with the bank statement.

Responsible small business owners recognize that outsourcing their small business bookkeeping method will assist maintain their business on top of its competition and they can easily watch how the business is succeeding.

Budgeting techniques for small business owners

Budgets are an important and useful tool for organizations. Enterprise level organizations invest heavily in financial planning and analysis departments. The small business owner may not require a full time budgeting team, however it is important for small business owners to invest some time and invest in their accountant’s time on the budgeting process. Many business owners guide their employees and check current performance of their organization by just using their instincts (gut feeling). At times though, the gut feeling can be fogged by unrealistic expectations; so it is really important for business owners to have an objective tool / map to back up their instincts and protect their investment.

The budgets and ongoing Actual vs Budget analysis can act as such a guide and check that aids business owners in both directing their employees and reviewing their employees performance towards the organisation’s goals. Below are examples of techniques that business owners and their accountants can use to build budgets:

Incremental Budgeting:

Using Profit and loss (Income Statement) reports generated from their accounting software, broken down by month; business owners can mark up their budgeted revenue and costs for the next accounting year. Advantages of this technique are that it is quick and time-wise, cost effective method. A disadvantages of using this technique is that if the organisation is looking for growth, marking up will not take into consideration, the fixed costs and marginal costs associated with generating a revenue; so by just increasing costs by expected revenue growth may not give true reflection of the costs associated with growth, Zero based costing.

Zero based costing: 

Zero based costing is at the opposite end of the spectrum of Incremental Budgeting. Zero based costings assume the business is starting from scratch by using costs, generated from current market values. An advantage of this technique is that will be a more up to date map than one generated using Incremental Budgeting techniques. Though it is time consuming to collate the information; additional benefit to using this technique is that it encourages organisations purchasing department to collate market prices. This in turn encourages them to review their supplier contracts more regularly and assess if their supplier contracts are competitive.

Activity Based Budgeting
Activity Based Budgeting focuses on expected sales and calculates backwards the costs associated with doing activities that generate that sale. Costs are apportioned by product, service and indirect costs (such as headoffice costs) are put back in at product, service level. It is also a good method to identify loss making products, services streams and activities associated with these. Before attempting to implement a budget, business owners must gain buy in from department heads in the budgeting process at department level, by identifying costs that department heads can, or cannot control. Otherwise there is a potential of department heads becoming de-motivated because their performance is measured on costs they cannot control.

R R Accountants panel of accountants offers Services are; Taxation advice, VATAnnual returns, Payroll Services, Bookkeeping Services, Sage accounting, UK Film Tax Relief,Personal taxation, Business start ups, VAT Services - VAT registration, Return, Investigation,Self assessment and more...

What is an Input Tax Credit?

If you’re a business owner in Birmingham around UK, then you’re collecting GST from your customers and remitting it to the HMRC. However, you’re also paying GST to your vendors on legitimate business expenses. The amount your remit to the HMRC can be offset by the amount you pay to vendors. This offset is the input tax credit (ITC).Without input tax credits, many products that we buy every day would be taxed over and over.

                             


Think, for example, of a sandwich you buy at our local Calgary corner store – the shop that sells it charges GST, as does the catering company that made the sandwich, the bakery that baked the bread, the cheese maker who made the cheese, the dairy farm that produced the milk to make the cheese… and so on and so on.

What input tax credits mean for businesses is that while you may collect a large amount of GST, you only actually have to give the government the difference between what you collected and what you paid out. For this reason, solid bookkeeping is very important. This is why our bookkeepers work closely with our clients to keep meticulous records of both the GST that is collected and the GST that is pay out.

Your bookkeeping records have to be extremely clear and detailed because when you make an input tax credit claim to the HMRC, you will be required to provide proof that these expenses were incurred legitimately and paid out as reported. The clearer this is, the easier time you’ll have working with HMRC in the event you have to undertake a GST audit. While these audits are never any fun, they are also nothing to fear if your records are in good order and you have kept track of receipts.

Here’s a tip:

• When you receive a receipt from a supplier or service provider, make sure that the amount of GST is itemized on the receipt and that the vendor’s GST number is recorded on the receipt. 

• You can save time and money by breaking out the GST and making a note of it on your cheque stubs so your bookkeeper doesn’t have to rifle through receipts or back it out.

• Nobody likes paying tax, so it’s really important to keep on top of those receipts and see your bookkeeper regularly to be sure that you are claiming as many input tax credits as you can and offsetting your GST remittance. 

R R Accountants LTD bookkeeper service in Birmingham help you to keep on top of your GST remittance schedule, whether it be monthly, quarterly or annual. If you are thinking about using the services of a professional bookkeeper, give us a call at 0121 766 5477 or email info@rraccountants.co.uk for a free consultation.

What is a CPA (Certified Practicing Accountant)?

This article defines what a Certified Practicing Accountant (CPA) is and why they are recognized as experts. Your accountant is a pivotal partner in your business. Their role is to maximize your financial position and to minimize risks in operating your business through proper structuring. Your accountant will have a large impact on your ongoing success.

The title “Certified Practicing Accountant” or CPA is primarily used in Australia. In other parts of the world the term is usually Certified Public Accountant. A CPA adheres to a set of guidelines set down by a professional accounting body. These requirements may include completing a minimum amount of professional development each year, compliance with a code of professional conduct and demonstrating experience in providing accounting services. Each country has its own requirements. CPA organizations are found in countries such as Australia, Canada, Hong Kong, India, Ireland, Malaysia, Singapore and the United Kingdom.

To be a CPA in Australia, candidates must hold a degree or a postgraduate award recognized by CPA Australia, have demonstrated competence in a prescribed level of knowledge, successfully complete professional level examinations and have attained a certain level of experience.

Here is what Wikipedia has to say about CPAs. A CPA can provide accounting services in many sectors. It is beneficial to use one that has experience in your particular industry. A CA is permitted to provide an audit opinion on a company’s financial statements.

Some interesting facts about Certified Practicing Accountants in UK:
Accounting bodies in leading financial centres around the world recognise Certified Practicing Accountants. How do you know that an accountant is a Certified Practicing Accountant? They are entitled to have the Certified Practicing Accountant designation (CPA) after their name. You can contact the CPA professional body in your country to check their qualifications and status. That’s a brief overview of Certified Practicing Accountants.

About Author:
Iftikhar Rashid is a Certified Public Accountant and a Director at R R Accountants LTD in Birmingham. R.R.Accountants closely works with client. For us each client is important and each client deserves our best services like full-service accounting firm in Birmingham, tax practice, accounting consultancy, payroll services, bookkeeping services, business setup services, private equity audit firm in Birmingham, UK

Back Tax Help in Birmingham City – R R Accountants LTD

Not filing your taxes can happen for many reasons. Maybe your records were incomplete or you didn’t have the money to pay at the time. R R Accountants LTD can help you resolve any past issues, file your back taxes and work with the IRS to resolve the matter on your behalf. When you work with a trusted Birmingham City accounting firm like R R Accountants LTD, you can rest assured that we will do all we can to minimize your back tax debt and any penalties associated with your failure to file.

                       


Getting up to date on back taxes is the first step you must take. The IRS will not allow you to use other tax debt relief options until back taxes are filed. If outstanding bookkeeping tasks are keeping you from filing your back taxes, we can work with you to get your books up to date so the taxes can be prepared and filed.

Call R R Accountants LTD today at 0121 766 5477 and set up a free initial consultation to discuss your situation and how we can help you get the IRS off your back.

Our back tax services for businesses and individuals include:
R R Accountants LTD works with both businesses and individuals to get their back taxes filed. We provide a variety of other tax services designed to eliminate tax problems self assessment tax return and minimize your overall tax liability while keeping the IRS at bay.

60 Second Job Spec – R R Accountants LTD, Birmingham

A private equity firm in Birmingham City is seeking a seasoned accounting professional to take on a temporary Tax Accountant role. This well-paying position is perfect for candidates with CPA licensure and experience in a large CPA firm! If you are interested in this opportunity.
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