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.
Every year many students passed out from the colleges and universities from all over the world with different college degrees. Some of them are come to the metro cities with some dreams in their eyes. Like some have completed their courses degree in accounting from top most colleges. Accounting involves the various tasks like income, assets, liabilities, and a lot more. I am sure you have learned about these tasks if you choose an accountancy course. Accountants and financial analysts are just two of the very well-paid careers. Both profiles are plays very significant role in any company. The responsibilities handle by an accountant include working on strategies for mergers and achievement, and doing quality management, among others. Financial analysts, on the other hand, provide direction to businesses and persons making investment decisions.

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Find A Quick Way to Find Accountants in Birmingham

Looking for an accountant in Birmingham, UK? Use the quickest accountants company on the internet. We have designed RRAccountants.co.uk to make it easier for you to browse and get quotes from local Accountants as quickly as possible so you can save your precious time whilst looking for Accountants in Birmingham, West Midlands, UK.

RRAccountants.co.uk is the quickest Accountants directory to navigate around and get results from. With a few clicks of the mouse you can locate all the accountants in Birmingham, West Midlands, UK and get quotes to compare.

A Wide Range of Accountancy Services

RR Accountants LTD offers a wide variety of services to clients. Some of these services can include:

• Tax returns
• Payroll
• Bookkeeping Services For Small and Medium Size Business
• Tax savings
• Tax advice 
• VAT Services - VAT registration, Return, Investigation Birmingham
• UK Film Tax Relief Birmingham

These services can be provided to sole traders, partnerships, limited companies and individual tax payers.

Choosing an Accountant

Getting a quote comparison for local Accountants in your area couldn't be easier. Just fill out the FREE quote comparison form available on almost any page on RRAccountants.co.uk and we will arrange for up to three local Accountants to provide you with a no obligation quote. When searching for a reputable and reliable Accountant how do you know that you have found the most cost effective one in your area? We do all the work for you so you don't have to, just let us know what work you need carrying out and we will inform the relevant accountants in your area.

Do I Need An Accountant? | Accounting Services Guide

Do I Need An Accountant? Accountants, affectionately known as bean counters, occupy a vast array of roles and specialties. Once upon a time they wore brown suits, thick rimmed black glasses and sat in a dark corner office hammering away on a calculator. Today the scene is somewhat different. Your accountant should be an active part of your business and most definitely have their finger on the pulse of what is happening in your industry as they help you to remain competitive and profitable.

It’s easy to be in a constant state of overwhelm as a business owner. To avoid this you’ll need to leverage all of the things you could be doing but can get someone else to do. For many businesses essential financial planning and reviews just don’t get done. It’s just a case of head down, bum up and hope for the best. Of greatest danger is when lots of sales are being made but the cash isn’t flowing in. How many businesses manage the financial side of their business simply by whether or not there is money in the bank?

It has been said that what gets measured gets results. This can be applied equally to staff, product sales and to the financial side of your business.

You have a number of choices:

Do it yourself - Even if you can manage the accounting function yourself you need to ask yourself if that is the best use of your time. What are you sacrificing in order to “do the books” yourself? Could your time be better spent increasing sales, improving the staff morale or maybe even spending more time with your family?
                              

In House Accountant – If your business is large enough you may choose to hire an in house accountant. The upside of this approach is that they will come to know your business intimately and are on call whenever needed.

Outsourced Accountant - Most small business will take this approach. There are many benefits. For example the accountant is being constantly exposed to many businesses and you will get the benefit of this added expertise indirectly. Consider the benefits of leveraging your time by sharing the accounting responsibilities of your business with a qualified and accredited accountant that has the capability to provide the accounting services that you need.


Contact us for In house or outsourced accountants visit our website RRAccountants.co.uk or send us email info@rraccountants.co.uk for further detail.