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Comprehensive Financial Services From Your Chartered Accountants in Fareham

Chartered Accountants provide important support services for businesses of every size, from assisting with year-end accounts preparation and advising on tax compliance, to auditing procedures and tax planning.

In many cases, combining accounting services can deliver cost efficiencies and time savings, where clients consult the same accountants within the same firm for each requirement. Working with a team of accountants in Fareham ensures that your point of contact will be well-versed in your individual circumstances and business and can get to work quickly.

Experienced accountants provide the added benefit of drawing on expertise from elsewhere within the practice. This service can prove invaluable when business owners are managing a complex decision, tax matter or investment opportunity and need specialist assistance.

Complying With Mandatory Accounts Filing Requirements

One common area an accountancy firm deals initially with is your annual financial statements. All companies must comply with reporting requirements at the end of each 12-month period, with limited extensions available for businesses requesting a longer first trading period or applying for an extension due to a change of financial year-end.

As a business accountancy practice, we are accustomed to dealing with accounts preparation for a wide range of clients. We can offer advice about how filing rules apply and any additional reporting regulations relevant to your trading sector.

Statutory accounts are a compulsory requirement for many  businesses, including:

Limited companies and limited liability partnerships

Charitable and not-for-profit organisations

Unincorporated businesses

Trusts

Many businesses also ask us to assist with management accounts preparation. The process works similarly to preparing annual accounts but offers a snapshot of company performance at defined points in the year, such as quarter-end.

Working with an accountancy team with industry experience ensures your finances are reported accurately, filed on time, represent a true picture of trading performance, and incorporate accurate asset valuations – precluding any likelihood of mistakes, assumptions or misdeclarations.

Small businesses that find accounts preparation challenging may also benefit from advice about transitioning to cloud-based accounting software, which offers a number of positives, including increased data security and more efficient bookkeeping – making year-end accounting a less time-intensive process.

Managing Tax Exposure and Submitting Accurate Returns

The next most frequent reason businesses in Hampshire hire an accountant is that they require assistance with tax filings. Depending on the size of the business, VAT registration requirements and the types of goods or services the company offers, there may be multiple tax-related matters that require attention:

Quarterly VAT returns and payments

Corporation Tax calculations and remittances

Taxes and duties related to imports and exports

Applying for tax reliefs available for research and development activities

PAYE taxes for employers, including National Insurance

Director’s tax exposures and tax treatments of dividend, salary and bonus payments

Accountants don’t simply compile reports and file tax returns but advise on the most relevant and efficient treatment of transactions for tax purposes. Examples might include scenarios where a business needs to decide whether to write off an item of expenditure or account for the outgoing as an investment – the right solution may impact your tax liabilities.

Businesses that regularly consult a capable accounting team also have the assurance of pre-empting changing tax regulations and ensure they are always aware of reforms that may affect the way they account for and declare tax obligations.

Seeking advice about cloud-based accounting systems, as we’ve mentioned, is also advisable for businesses with ongoing tax filing requirements. Making Tax Digital is a major reform to the way UK companies submit tax declarations, and lagging behind the staggered rollout could be a costly error.

Bookkeeping and Ongoing Business Finance Support

Outsourcing bookkeeping is a great way for small business clients to maintain control over their finances, delegating day-to-day data entry, accounts reconciliations and management of money flowing into and out of the business – ensuring records are accurate and current.

For many businesses, their success hinges on real-time reporting and having the kind of oversight that helps them discover opportunities, trends, areas driving the highest profit margins, or potential cash flow bottlenecks that require action.

Budgets and forecasting provide a picture of how the business is trading now, what that might look like in a year or further into the future, the reality of profitability, shareholder wealth preservation and growth, and how the company can inject financial resources into planned projects.

These accounting services add real value, ensuring that business owners can, for example:

Arrange competitive business loans to meet shortfalls in cash flow.

Make astute decisions around mergers, acquisitions, investments in equipment, and workforce expansion.

Forecast their taxation obligations and ensure reserves have been set aside.

An accounting practice that knows your business and is up to speed with your key aims can offer access to a broad scope of knowledge, whether you require advice about specific decisions or would like assistance with tax management and other issues as and when they arise.

The Benefits of Consulting Accountants in Fareham

Working with a local accountancy team here in Hampshire is an ideal option for businesses of all sizes – you can consult with an accountant you know and trust at any point or arrange an in-person chat or confidential phone call to work through any decisions, issues or opportunities.

Chartered accountants offer a comprehensive spectrum of expertise and ultimately make running your business more streamlined, without time pressures and uncertainty or guesswork to complicate your accounts filing, tax declaration or reporting requirements.

Accountants get to know your business plan, objectives, trading sector and aspirations to tailor the suggestions we make, the services we recommend or the solutions we might offer your organisation, varying this accordingly for limited companies, sole traders, partnerships and larger corporations.

Please get in touch with the James Todd & Co team anytime for further information about any of the services discussed here, or review our detailed service pages to learn more.

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Key Signs Your Business Needs to Hire a Professional Bookkeeping Service

Every business owner knows that disorganised bookkeeping can make tax returns, payroll, year-end accounts preparation, and other submissions stressful. Whether you allocate time to sorting through your accounting records every day, week or month, it’s all too easy for administrative tasks to slide down the to-do list for busy companies.

However, running reliable, real-time reports and understanding your financial picture is also essential. For example, the information within your management accounts can tell you how much cash you have available to purchase new inventory or indicate whether you are making money on a particular product line or service.

Businesses also depend on their financial records to comply with legal requirements such as preparing VAT returns. Let’s look at the indications that your bookkeeping is getting out of control – and why it may be time to consider working with a professional bookkeeping service.

How Can Businesses Evaluate Whether Their Bookkeeping Is in Good Order?

The complication may be that businesses assume their financial and accounting records are in a reasonable state of organisation – until they come to running a set of management accounts or preparing a return and find that something doesn’t look quite right or that their profit margins appear significantly lower than expected.

Bookkeeping isn’t ideally a job left to the last minute, either, ensuring you have ample time to investigate inconsistencies, run reconciliations and verify that your asset figures are correct.

Let’s look at some of the primary concerns businesses have when they approach the James Todd & Co team to discuss our professional bookkeeping services.

1. Being Unsure of Your Cash Flow Position

Cash flow is a crucial piece of information companies use for budgeting and forecasting, ensuring they are always aware of the reserves available and the income owed to the business. An obvious sign that you would benefit from an experienced bookkeeper’s assistance is that you cannot cover important expenses due to a lack of cash availability.

Most businesses have seasonal trends, where they achieve the bulk of their revenue during a particular period. That means they must understand how that inflowing cash corresponds with outgoing liabilities and when they may potentially have gaps.

Poorly managed cash flow is a core reason some successful organisations face insolvency – not because the business model isn’t profitable, but because there hasn’t been the right planning to ensure the company has the cash assets to meet its obligations.

If you feel a slight panic at the thought of your upcoming tax bill or aren’t 100% certain your business bank balance can cover all your payroll and invoice expenses due at month-end, your bookkeeping may need attention.

2. Having a Lack of Time or Capacity to Focus on Bookkeeping

It’s no secret that many business owners are spinning plates and may be focusing their time and attention on numerous areas of the company, from dealing with customers and new enquiries, developing new products and ensuring they have a solid foundation to help the business grow.

As a company scales and gets larger, the importance of bookkeeping also increases, where the bigger the business, the more you’ll need to keep on top of, including higher:

Payroll costs

Sales transactions

Expense invoices

Incoming payments

Reporting obligations

Outsourcing your bookkeeping to an experienced bookkeeper provides the assurance that you will stay on top of your accounting, will receive automatic reminders when you need to file tax returns, and never need to allocate your valuable time to clerical tasks you may find a hassle to complete.

Expert bookkeepers can manage your finances in minimal time, working efficiently and using their professional knowledge to raise an alert if they have any queries or need to question whether a transaction is correct.

3. An Absence of In-House Bookkeeping Expertise

A large majority of small business owners do not have any accounting know-how and launch their businesses based on ideas, skills and experiences far removed from the world of financial returns and tax management.

While an advanced accounting software suite can make most basic bookkeeping tasks easier to manage, it remains inevitable that many small businesses may be unaware of which expenses are tax deductible, when returns are due, or how to ensure they record transactions in the most tax-efficient way.

Working with a professional bookkeeping service provided by a team of local accountants is the ideal solution, where you have the expertise on hand to advise if there is a better way to manage your tax obligations and avoid eroding your cash reserves when there is a more favourable financing opportunity you may wish to consider.

This level of guidance can also be invaluable when making financial decisions, comparing borrowing options, or deciding whether a new product launch is financially feasible and appropriately timed.

4. Repeated Late Payments or Incoming Remittances

We mentioned cash flow earlier and would recommend booking a consultation with our capable bookkeeping service if you keep coming up against chases for late payments or find it difficult to assess which clients have paid their accounts on time – and which invoices are well overdue.

Keeping track of accounts receivable and payable is hugely important and can make a significant impact on various aspects of business finances, including:

Applying for borrowing or investment.

Forecasting your cash reserves.

Making purchasing decisions.

Paying staff and creditors on time.

Remitting tax and VAT payments promptly.

Outdated bookkeeping records make it impossible to budget accurately and to analyse whether the business is in a good overall financial position to achieve its aspirations.

5. You’re Not Confident in Your Bookkeeping Skills

If you spend plenty of time keeping your accounting software up to date with your latest transactions but remain unsure whether your small business accounts are accurate, a bookkeeper can remove this element of uncertainty.

Bookkeeping itself can be straightforward, but working through a backlog of data entry requirements, reconciling multiple bank accounts or business credit cards and running reports that you are absolutely confident are correct requires a certain amount of skill.

Accountants provide business-specific bookkeeping services that can remove the worry from managing your financial affairs by taking care of daily, weekly, monthly and annual tasks to ensure your records and reports are always on time and error-free

Types of Business Bookkeeping Services

Getting the right assistance for your business can make such a difference in how you manage your time. Rather than struggling to keep pace with bookkeeping or scrambling to prepare tax returns the day before the deadline, your bookkeeper will manage all aspects of your record-keeping while ensuring you have the capacity to focus on what you do best.

There are also several services you may wish to consider, depending on whether you have an in-house bookkeeper who needs some additional training and assistance or require an initial tidy-up of your records and reporting to deal with backlogs.

The James Todd & Co Accounting Clean-Up service is a great place to begin; we assign expert bookkeeping teams to work through all your ledgers, reconciliations, and entries and provide a fresh, up-to-date start.

From there, our experienced teams can provide ongoing bookkeeping and management services, professional staff training, and quarterly account reviews. Let’s look at each of these options in a little more detail to explain how they work and ensure you select the right services for your business.

Bookkeeping Training and Support

One of the reasons many clients come to us is that they understand the importance of bookkeeping but find the reporting aspects of running a business difficult to keep up with.

Bookkeepers may, for example, be up to speed with entering transactions and reconciling bank accounts but not have the knowledge or the right software to produce insightful reports that show decision-makers exactly how the company is performing.

Regular reporting is key to business growth since it can highlight the following:

Areas where the business is doing well and aspects of its operations that are less profitable or falling behind targets.

Cash flow bottlenecks, allowing owners to plan for upcoming expenses, tax obligations, and payments owing.

Surplus cash reserves, which the business can use to reinvest in additional staffing or services or transfer to a higher-interest account to ensure their reserves continue to grow.

Trends and changing customer behaviours, identifying ways to diversify or expand.

In this scenario, much of the baseline work has already been completed, but the business may not have the reporting structures in place to extract meaningful value from its accounting records.

We work with bookkeepers to expand their knowledge, discuss the right ways to produce reports and management accounts from their system, and how to organise that reporting to ensure it provides clarity and allows for informed decision-making.

It is not uncommon for a business and its bookkeeper to be working harder than ever as transaction volumes grow but find that profit margins hit a plateau – making accurate, real-time reporting essential to unpicking any barriers to growth that may exist.

Accounting Clean-Up Services

The Accounting Clean-Up Service is ideal for businesses that have grown rapidly and have not found the time or capacity to keep their bookkeeping up to date. Working through piles of receipts and expense claims, having months of bank accounting transactions to reconcile, and trying to catch up with a backlog of invoices can be stressful, and rushing inevitably makes errors more likely.

During an accounting clean-up project, our teams will work through each element of your accounts in detail, eliminating mistakes, catching up with transaction entries, and helping you refocus. This service includes:

Checking nominal ledgers, bank reconciliations, sales and purchase ledgers and cash and credit card reconciliations.

Reviewing your chart of accounts, ensuring payroll entries are correct and reconciling VAT and balance sheet accounts.

Comparing your opening balances against your last set of financial statements and making the necessary adjustments to record prepayments and accruals.

Liaising with HMRC, where necessary, and submitting corrected information as applicable.

Once your accounts are back in good order, we produce a full set of management accounts, advise on any aspects of your accounting systems that you might wish to change, and detail all the corrective actions taken. After the debrief meeting, you can either take back control over your bookkeeping, delegate this responsibility to a team member, or outsource your regular bookkeeping to our experienced teams.

Another solution, which works well for businesses with in-house bookkeepers but that require a little additional guidance, is to consider a quarterly review.

Quarterly Accounts Reviews

This service helps business clients get more from their financials, verify that bank and VAT reconciliations at quarter-end are correct, make adjustments for prepayments and accruals, and produce a full set of quarterly management accounts.

Producing a reconciled profit and loss account and balance sheet every quarter offers business owners the data and insights they need, rather than waiting until year-end to identify issues, areas of the business that aren’t performing as expected, or cash flow shortages.

Performance insights can be invaluable and assist with forecasting, strategic planning and money management. While quarterly reviews are a popular service and a middle-ground between fully outsourced bookkeeping and managing all aspects of your accounting in-house, we can also provide more regular reviews as required.

Fully Outsourced Professional Bookkeeping Service

Our final option is to consider outsourcing all of your bookkeeping – an excellent solution if you aren’t yet in a position to hire a full-time bookkeeper or finance manager but don’t have the time or skills needed to ensure your reports and accounts are in good order.

We work with each client to understand how best to meet their needs and utilise cloud-based accounting to ensure we can access financial records remotely and perform regular bookkeeping tasks without interrupting your workflows.

An experienced bookkeeping team provides added benefits, such as ensuring you are compliant with regulations and reporting requirements, providing support to ensure you maximise tax efficiencies available to you, and offering recommendations where we can see an improvement opportunity we think would be of interest.

Whichever bookkeeping services you choose and that align best with the lifecycle and needs of your business, our professional, experienced accountants and bookkeepers aim to be flexible and supportive, offering the breadth of our knowledge and guidance as your business grows and evolves.

Please get in touch with James Todd & Co. today to learn more about any of our bookkeeping services.

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Making Tax Digital: Compliance Advice From Our Cloud-Based Accountants

Making Tax Digital, or MTD, has been on the agenda for some time now. Following delays and changes to the staggered introduction, most UK businesses now need to comply with MTD requirements for VAT submissions, ensuring they have compatible cloud computing software.

However, there is a larger group of companies that are not at the VAT registration threshold and should be conscious of when the plans to digitise the tax system are likely to affect their affairs, with scheduled transitions for Corporation Tax and Income Tax Self-Assessment (ITSA) on the horizon.

Let’s look at how organisations can adapt to pre-empt compliance requirements and become familiar with the complexities of MTD in good time before the next transitional phase begins to impact their reporting requirements and a cloud accounting system becomes mandatory.

A Recap of the Changes Introduced By Making Tax Digital

The basics of MTD are that the government and HMRC will require submissions and declarations to be made digitally using compliant cloud-based software packages that allow users to submit financial information directly through the tax office portal.

For most businesses, traditional accounting software will be incompatible, necessitating advice and guidance from an experienced commercial accountancy team to select viable, future-proof and efficient upgraded cloud-based accounting software systems that are MTD-ready.

As it stands, the current changes and anticipated phases include:

April 2022 – MTD for VAT returns applies to all VAT-registered UK companies.

April 2026 – MTD will apply to Income Tax Self-Assessment (ITSA) returns for self-employed taxpayers or small business landlords with an income of £50,000 or above.

April 2026 – MTD will roll out to Corporation Tax returns, although this could potentially be postponed further. There may be a staged introduction for small business owners, although this is not yet confirmed.

April 2027 – MTD is expected to be introduced for ITSA sole traders and taxpayers with self-employment or property incomes above £30,000.

We do not yet have clarification about when MTD will apply to general partnerships or whether any of these expected introduction dates will change again. However, it remains essential for taxpayers across the scope of UK taxation to understand what these reforms will mean for them.

Services and Support Offered By Cloud Accounting Providers

The primary objective of MTD is to consolidate and simplify financial information reporting mechanisms. Rather than having the choice of paper-based filing, online submissions or software-based returns, the goal is for every business, VAT payer and taxpayer to use a unified system to declare their taxable activities through cloud accounting software.

Stalled implementations aside, there is no doubt that cloud-based accounting is a step-change in financial reporting, and there is no potential for any business to disregard MTD or assume it will not affect them sooner or later.

As a cloud-based accounting specialist, James Todd & Co can help at every stage, from offering independent recommendations about the cloud accounting software best suited to your business activities and sector to supporting transitions from outdated systems to new solutions with cloud-based accounting functionality.

Cloud accounting offers many advantages above and beyond MTD. Financial data and records are stored through secure servers in the cloud, accessible via an internet connection rather than on a desktop-based hard drive or static server.

Businesses switching to cloud-based software can use real-time reporting, generate sales orders remotely, have secure access to their accounting software on any device, and permit multiple users to access reports concurrently to save time.

Advanced cloud accounting software replaces the manual aspects of double-entry bookkeeping and can handle data entry, cash flow forecasts and multiple currencies with live bank feeds updated automatically, alongside other functions to handle payroll and small business forecasts.

How to Prepare for MTD Compliance

The first task we’d recommend for any company looking to prepare for MTD is to audit and assess all of the business processes and accounting software in use by the organisation. Having a detailed and comprehensive log is a useful starting point since you can determine how and where your data is currently stored and how you extract that data for VAT return and tax reporting purposes.

From there, it is important not only to select cloud accounting software that is fit for your business and sector but to look at the other benefits. Some software packages are ideally suited to specific industries, for example, or for remote-based or hybrid workforces.

There are several popular options for small business accounting software. As a Xero Gold Champion Partner and Sage Accounting Certified Expert, we can offer ample support comparing either of these solutions.

It may also be necessary to assess the in-house reporting processes you follow and think about whether your bookkeeping and financial staff have a sufficient understanding of MTD legislation and accounting needs to manage the transition. Many clients work with our team to receive independent guidance throughout as part of a tiered change management approach.

Having a well-laid-out plan helps companies and small business owners to see which records they currently store manually through paper-based bookkeeping or spreadsheets and use that information to pick software solutions that are streamlined, efficient, and appropriate.

Registering for MTD at the Applicable Time

As our summary above shows, not all businesses, nor all taxes, are immediately subject to MTD reforms. It is possible that additional postponements will impact the indicative dates when the tax office currently expects to introduce the next tranches of MTD enrolment.

However, knowing when and how this may influence your business and being poised to respond and register is a significant advantage, not least for your peace of mind.

In most cases, you will be notified by HMRC when it expects you to transition from an existing VAT, ITSA or Corporation Tax basis over to the new MTD system. You can also check in with our team of accomplished chartered accountants at any time whether you are unsure when MTD will apply to you, would like a consultation to discuss the appropriate software solutions, or have any questions about MTD now and into the future.

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