No matter, how successfully you are running your business, there comes a time, when you will find yourself out of money.

This is exactly when you need to reconsider about how to calculate the cash flows for your business because an accurate cash flows statement helps you predict about when your business is going to be short of cash, also, it estimates and predicts when your business cash reserves will be strong.

In short, cash flow forecasting determines your company’s financial condition and predicts your business’s success or failure.

Moreover, cash flow forecasting helps business owners to figure out that their spending is quite enough to meet their business goals or is there anything to be reassessed.

When a business proactively manages its cash flow, they become more vigilant as their cash flow statement provides the opportunity to closely monitor the behavior of suppliers and customers, if they are paying late invoices, a business owner can take quick steps to defend their cash position.

How to Create Accurate Cash Flow?

Creating an accurate cash flow is a daunting task but in return, it can serve your business a lot. You can follow these quick tips to avoid cash flow problems that could possibly occur.

Estimate Incoming Cash

In forecasting cash flow, first, determine how many sales you will be bringing in monthly or weekly. You can estimate your sales through your past history and if you are new in the market then you may estimate your sales through industry standards or by considering the performance of other related businesses.

Evaluate Your DSO

In business, sometimes you don’t immediately receive the money you earn from sales, in fact, it could take almost 30+ days to receive your earned cash. In this case, you are required to evaluate your average DSO and use it in your forecasts. This way, you not only know how much you expect to make but when you can expect to receive it.

Determine Your Spending

This is an essential part of your cash flows forecasting, determining your spending means you have to estimate your cost that includes both fix and variable cost. Your fix costs will be your rent expense and your employees’ wage. However, your variable cost will be varying and most likely to be associated with your product/service sale. Therefore, you can take reference with your estimated sales to determine variable costs. Try to be accurate about all the bills and annual fee (if there’s any) and then add your estimated cost in the cash flows forecast.

We hope this blog will help you to create your business cash flow and in case, if you are finding it a bit difficult then contact our team to get the robust financial forecast to optimize your business performance.

The post WHY CASH FLOW FORECASTING IS IMPORTANT FOR YOUR BUSINESS? appeared first on Blogs or News Offical Certax London.

First thing that you need to consider is, are you juggling with so much? Do you have too much to handle? If no then probably, it’s not a good option for you to seek help from Bookkeeping firms.

But, in case, if you already have dozens of responsibilities then you definitely should seek assistance from professional bookkeeping services for small business.

There are quite practical reasons to call a professional bookkeeper for small business, as it helps to manage operational functions and makes it easy to run business.

Reasons Why You Need Bookkeeper For Business Startup

Expertise

You are a business person for a reason, your sole responsibility is to create a product, satisfy your customers and make tons of money with that. However, if you want to run this business in the long run then you definitely contact professionals to manage certain areas of your business, unless you are a true champion in financial affairs. A professional bookkeeper entails knowledge regarding important financial areas like accounts payable, accounts receivable and taxes. Therefore, he/she may better run your financial areas as he/she took certified courses related to these areas.

Ensures Tax Filings

Finding a right bookkeeper will also help you to manage your taxes, payrolls and other financial issues. With a professional bookkeeper, you will never miss out on your quarterly or annual tax filings. Moreover, some small businesses have various tax requirements depend on the business structure. These requirements may include estimated tax payments, corporate tax payments and etc. A professional bookkeeper can better manage tax related functions.

Saves Time

Hiring a professional bookkeeper also saves your time that you can utilize for other important business activities to improve your revenue.

Maintains Cash Flow

With so many business activities, sometimes, it gets difficult to maintain a cash flow or properly manage outstanding payments whereas, a professional bookkeeper sends you quick remainder about outstanding payments and keeps your cash flow optimal.

Saves Money

Taking help from a bookkeeper also saves you money, as he or she may advise you on expenses plus, you don’t need any office set-up to seek his/her services. You can find an affordable bookkeeper online.

Pay Your Invoices On Time

A bookkeeping professional saves you from late payments due to the on-time reminders about paying your bills. While engaging in various activities, you may forget about your invoices and can have late payments that can hugely effect your business but hiring a bookkeeper can save you from all this.

No Need to Learn New Skill

There is no doubt that to perform your financial functions, you must need financial skills. Bookkeeping is also a financial function and to do this, you need proper knowledge of accounts payable, accounts receivable, budgets and taxes. However, you don’t need to learn these skills if you have planned to seek assistance from professional bookkeeping services and accounting firm.

Helps You to Focus

When you get services from an outsourced bookkeeper, it helps you to focus on what’s important. In this way, you don’t need to consume too much time on your financial paperwork as you already have assigned this task to a professional. You can focus on other aspects that can let you be more effective and productive.

Growth

As a new business, you need to focus on core business activities to grow. However, if you are getting yourself tangled in small tasks then it would lag you behind from moving forward. Therefore, hire a bookkeeper to do the small stuff and plan yourself big strategies for future will help your business grow.

Error-free Bookkeeping

Since, you are not an accounting expert, there are chances of being inaccurate, but if you will seek help from professionals then there is a very less risk to make mistakes. A professional accounting and bookkeeping service will more likely to do their work expertly and there is very minimal chance of errors.

If you are also looking for professional accounting and bookkeeping services then Certax Accounting is a good place to get started with. Our services are flexible and offer you with various options that almost suite your every business need.

The post 10 REASONS YOU SHOULD HIRE A BOOKKEEPER FOR YOUR STARTUP appeared first on Blogs or News Offical Certax London.

Businesses who plan to seek help from outsource accounting and payroll services achieve better control and understanding of the cash flow that later assist them to take well-informed decisions.

If you are also working as a small business and wondering why outsource accounting services? Then this blog will help you to know various solid reasons and benefits of using accounting services.

Here we are presenting the top most advantages of outsourcing accounting and payroll services that can be enumerated as follows:

Saves your Time

In business, time is considered to be a very precious thing because it is supposed that “Time is Money”. Possibly, this could be a biggest reason to hire an accounting service as it saves a lot of time and saves you from hiring and training employees.

No Risk Of Being Absent

When you hire a professional accounting firm for managing your accounts it gives you a business continuity and there is no need to stress over covering period of absence due to holiday and sick leave.

On-Time Financial Reports

A professional financial firm works with a team of dedicated professionals who are expert of managing your financial needs and provide you detailed, on-time financial reports.  These reports can influence and control external forces to work in your favor. Moreover, these reports will assist you to control the pricing of your product or services and saves you from the dilemma of over or under pricing. Also, if you make a decision that is resulting losses then availability of timely financial reports will guide you to revise the decision before the occurrence of any big loss.

Saves Cost

Outsourcing accounting service allows you to pay only for what you need. This means, you only have to pay for the required service not for the total working hours. This will save your cost as you don’t have to pay the monthly salary for in-house accountants.

Fast Response

Hiring a professional accounting service lets you quickly access the well-informed accounting specialists who can quickly respond to your queries.

If you are also looking for the reliable UK accounting firm then contact Certax Accounting to find how we can help you manage your accounts and taxes.

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Basically, both Debtors and Creditors are accounting terms, used for financial matters. Let’s dig deeper to know more about it.

What Is a Debtor?

A debtor is an individual, small business or anyone who owes money from any party.  The borrowed money is repaid over a particular, definite period of time. This money usually contains additional interest payments as a benefit to loan money.

If you are running a small business then you may have debtors or you could be a debtor as well.

What is a Creditor?

Creditor is a term that is used for an entity (organisation, individual, government or bank) who lent money to another party.  The party to whom credit has been arranged is mostly a customer and referred as a debtor.

Debtor and Creditor Scenario

Those customers who do not pay an upfront for your services or products are debtors to your business. Similarly, you are debtors to your dealers, in case, if they have provided you with goods which are not yet fully paid.

Relationship between a debtor and creditor is considerable because these two terms affect both assets and liabilities on your balance sheet.

Being a creditor for another business can be an asset, representing financial power to your business, whereas too much debt counts as a liability.

Conclusion

If a company owes money to another company. Then the previous company will be debtor while the other company will be creditor. They are the two parties to a particular transaction and hence there should not be any confusion regarding these two anymore.

We hope that this Article will help you know about the basic difference between debtor vs creditor. In case, if you need any assistance to any accounting aspect, tax, or any particular issues with debtors or creditors feel free to get in touch with Certax London. We are the affordable and approachable source for your tax and accounting solutions.

The post DEBTOR VS CREDITOR EXPLAINED appeared first on Blogs or News Offical Certax London.

In this blog, we are presenting 6 ways that can assist accountants to help savvy small business owners, assuring their business is tax-efficient to the way possible.

Home Office Expenses

Small business owners who continuously work from a home office are eligible to request a small tax deduction of £4 a week without giving any itemised bills, slips or documentation.

In case, if home office of a director costs higher, then larger deductions can be claimed, the variable expanses of a business should be clearly explained and separated out including property/portion being used for the business, hours of usage of that room/place used for business purpose, other utility costs including energy and water.

However, fixed expenses for director of limited companies remain unchanged. These taxes include rent, council tax and mortgage interest and such taxes are not eligible to be claimed as a tax deduction.

Additionally, in case, if a director has his own property/house and he uses the room that is fully exclusive for business purposes then there would be a risk for director to lose his privilege for Private Residence Relief on that particular portion of the house. As a consequence, the director will need to pay a potential capital gain tax when the property is sold.

How Much Does It Worth?

In London, for the typical small business, a weekly allowance of £4 for home office means a tax saving of £41.60 per year

Telephone Expenses

Suppose, if a home business owner make business calls through his landline phone then the cost of business calls are tax deductible. However, all other charges including the line rental cost of the landline will not be eligible to be claimed for a tax deduction.

In case, if a small business owner uses an office landline at his work place then it is fully tax-deductible but the bills should be issued to the company instead of the business owner.

Also, if a mobile phone contract is issued by the company’s name and any person is using it reasonably then complete cost of phone contract will be tax deductible.

In case, if a company is using a broadband account without any private use then broadband fee will be tax deductible.

How Much Does it Worth?

In London, a regular small business can take the advantage of £120 per year by issuing their broadband bills and mobile phone contracts with company’s name.  (Based on a monthly broadband fee of £30 and mobile phone costs of £20 a month).

Plant and Machinery Cost

Small business owners are also eligible to claim tax deductible cost of the plant and machinery they are using. These cost includes, office equipment, manufacturing, computing, printers, fax machines, computer software, chairs, desk, scanners. A company can show its invoices and receipts as prove while calculating its Corporation Tax bill.

How Much Does it Worth?

A regular small business in London, hardly utilises its £200,000 Annual investment allowance. Small business can have more tax saving with a total of £320 (based on the cost of MacBook buying with a printer and other business software).

Travel, Subsistence and IOEs
Small business owner, who owns or rents an office, studio or any other factory or workshop, their travel for this place is not tax deductible.

However, any sort of business travel apart from your normal travel, like traveling for client meetings, traveling to conferences or other professional traveling including meeting with suppliers etc can be deductible for Corporation Tax bill.

How Much Does It Worth?

A small business in London can save £480 annually with these tax deductions. However, it is based on the two offsite client meetings in London per week with maintenance expenses, plus one overnight short business trip each year with maintenance expenses and Incidental Overnight Expenses.

Business Mileage expenses

In case, if a small business owner is using a vehicle that is privately-owned then he can claim a particular amount (per mile) as tax deductible expense. In addition, travelling expense for non-official place is not included.

How Much Does It Worth?

As per BBC, the average business mileage stands to 700 miles in the UK annually, representing a tax saving of £315 a year.

Magazine subscriptions, professional journals and business books

The cost of business book, magazine or journal is usually tax deductible. Moreover, if any company have clients in the adult entertainment or automotive industry then the subscription cost will not be deductible.

How Much Does It Worth?

A number of small business owners fail to claim their business books, magazines and journals tax deductions.  This can help them to receive a tax savings of £80 annually.

If you need further information relevant to other tax policies or tax deductibles then you can contact Certax London. We would also like to help you with online accounting, tax, payroll and vat services.

The post 6 TAX DEDUCTIONS FOR SAVVY SMALL BUSINESS OWNERS appeared first on Blogs or News Offical Certax London.

• Capital investment opportunities.
• Flexibility of internal structure and members’ rights.
• The allocation and taxation of business profits.

You can choose your legal structure in accordance with your current business or future business plan.

LLP VS LTD                                    

What is a Limited Company?   

A limited company is a private company that is completely separate from its owners, owned by shareholders and managed by directors. Private limited companies provide limited liabilities to its members, a private company has a separate identity to its shareholders and directors. Also, a limited company will be limited in terms of shares or guarantee, it will be paying corporation tax on all profits, having a UK address, a bank account that can sell shares for profit and gives a dividend to investors.

What is Limited Liability Partnership?

Limited liability partnership is also known as LLP that involves some or all company’s partners and everybody shares limited liabilities. This legal structure was introduced in 2001 by the LLP act 2000 and it is effective for the companies that mostly operates as partnerships similar to accountancy firms or lawyers.

LLP is not different from any other partnership in terms of tax liability, but it offers a reduced financial liability for each partner means, one partner is not responsible for other partner’s negligence or misconduct.

In addition, LLP is a legal structure that you cannot setup for non-profit organisations, they are designed for profit organisations. However, you can setup a non-profit company by using LTD company setup.

Major Differences Between a Limited Company and an LLP

• A limited company can be owned, registered and managed by only one individual, a single person can act as the director and shareholder at the same time. However, there must be at least two members required to setup an LLP. However, you can also set up a sleeping limited company as the second LLP member.

• In a limited company, the liabilities of company’s guarantors or shareholders is limited to their shares amount (paid or unpaid). In LLP, the liabilities of the members is limited to the amount each member guarantees to pay in case, if the business will face financial loss.

• A limited company is allowed to borrow both loans and capital from outside investors whereas, an LLP is only allowed to receive loan capital. Also, LLP is not allowed to offer equity shares in the business to non-LLP members.

• A limited company is bound to pay all the Corporation tax and Capital Gains Tax on all of their taxable income on the other hand, LLP members only pay income tax, national insurance and CGT on all taxable income. Also, LLP itself is free from tax liability.

• Changing internal management structure and distribution of profits is easy and flexible in an LLP system.

• A limited company can be set up as a non-profit business whereas, an LLP is bound to be set up with profit making intentions.

Difference of Tax Liabilities of LLPs and Limited Companies

A limited company is bound to pay a corporation tax which is 19% of their all taxable income. Any salary transferred to the director is liable for income tax, national insurance and employers NI. Also, directors are shareholders in most cases, that’s why they are consider as the employee of their own company due to this reason, much of their received profit is not subject to corporation tax or personal income tax.

In addition, by paying a director’s salary that is not more than his tax-free personal allowance, also, by distributing additional profits as shareholder dividends, a director will legally be able to reduce his personal tax liability.  Dividends are issued from post-tax profit and the amount of tax you’ll pay on your dividends is completely depends on how much you draw. However, first £5,000 of this will be tax-free, known as your dividend allowance. Additional dividend income is taxed at according to the tax bracket of the recipient.

LLP Tax Liability

The members of LLP are considered as self-employed individuals, they are bound to pay income tax and national insurance on their particular profits no matter, whether they take all the profits as salary or add  some  of it in business Plus, they have to register for self-assessment but they are not legally liable for Employers’ National insurance on their income.

The tax liability of LLP members can be high, depends upon the generated profit amount. In case, if the income of an LLP member exceeds the personal tax-free allowance then the member will be subject to the following income tax rates:

• 20% on taxable income up to £33,500 (you will start paying this rate on income above the £11,500 Personal Allowance threshold).
• 40% on taxable income between £33,501 – £150,000 (you will start paying this rate on income over £43,000).
• 45% on income over £150,000.

Which One Is More Tax Efficient?

In LTD Company, you can generate annual profit more than you need to take out of your business, in this way, a limited company will be more tax efficient. You don’t have to withdraw all of your surplus income straightaway, instead of this, you can leave an amount of profit in the business and comply tax by withdrawing the surplus in a future tax year.

The post LLP VS LTD-MAJOR DIFFERENCES BETWEEN LLP AND LIMITED COMPANY appeared first on Blogs or News Offical Certax London.

These functions include a business idea, name and business plan. Your business plan will be directing you about how you will move forward because, it indicates your marketing and advertising strategies along with other long-term and short-term strategies to grow.

And off course, all these plans and strategies holds expenses, liabilities, assists and budgets.

Right after making your start up business plan, you have to perform other necessary functions that include; licensing process, insurance, and recruitment.

With so many important processes, it’s really hard to keep an eye on your financial concerns and that’s where your start up business needs an accountant.

A professional accountant helps and manages all your financial issues meanwhile, you can focus on other important business functions. In addition, without a professional accountant, you can never realise your finances and without actual finances, you can’t anticipate how good or poor is your business doing.

Here are some additional reasons to seek out a specialized, professional start up business accountant:

Provides Accurate Money Flow

A professional accountant keeps a detailed ledger of the money flow within the company. As a start-up business owner, you cannot take care of the cash flow whereas, a professional accountant is experienced enough in money saving, tax concerns and retaining a healthy profit for the company.

Understands Complexity Of Taxes

A certified public accountant can provide you with expert advice on financial matters but keep in mind that regular accountant cannot do this. Only certified accountants can help you understand all the tax complexities plus, also guide you about where you can save tax legally.

Deals With Complex Issues

There is no doubt that accounting issues are very time-consuming and complex to deal with. A professional accountant not only deals with these complex issues, but also save all the financial records that help you during filing your tax, investing money and at the time, when you check both cash inflow and outflow.

Analyse Large Data

A trained CPA is able to analyse large data sets and directs management about future expectations. In this way, having an accountant is really important for making data-backed projections for the next quarter or fiscal year.

Looking to hire top talent in finance and accounting for your business? Call Certax London, we can help you.

The post WHY AN ACCOUNTANT IS IMPORTANT FOR A START-UP BUSINESS appeared first on Blogs or News Offical Certax London.

The accountant cost vary considerably, and it mostly depends upon the type of service they are helping you with.

In case, if you are looking to hire an accountant for your firm then it’s good to know that most of the accountants charge you a fixed rate per month.

Why I Need Accountant?

Off Course, before planning to hire your accountant you must understand that how he or she can help your business and why you actually need to hire an accountant.

• They save you from paying more tax
• Help you take the advantage of every allowance
• They make sure to provide accurate figures to HMRC and companies house on time
• They have knowledge of 17000 pages UK tax law
• Accountant go through your expanses and identify every area where you can save money.

General Accounting Services for Small Business

A small business can be anything like a limited company of 50 employees or a self-employed contractor. Accounting for such business comes in a package with several services including:

• Annual accounts
• Bookkeeping
• Corporation tax returns
• Director’s personal tax return
• Monthly & annual payroll returns
• Quarterly VAT returns
• Advice on tax avoidance legislation (IR35)
• Ongoing day-to-day advice from your accountant.

This is a most common package but some accounting firms may even provide you with more options. Typically, you have to pay a monthly fee for such packages.

However, this monthly fee may vary, means your accountant cost can be as low as £60 or as high as £250 subjected to various things like turnover, service depth and location that you are located in at UK. In addition, businesses who have more employees and turnover will likely to pay more.

Accounting Fees per Service

You can also hire an accountant on a service-by-service basis, for example, you may hire accountant for year-end accounting, VAT returns or payroll services. Here, we are presenting a common one-off fees for similar services:

Please note: All fees given in this guide is just for your guidance and if you want to get an idea about actual and accurate accountant cost, you can contact Certaxlondon.co.uk. We are the leading firm of accountants and can offer you a full range of accounting and tax services. Contact Certax London and get your quote now.

The post HOW MUCH DOES AN ACCOUNTANT CHARGE ? appeared first on Blogs or News Offical Certax London.

Who Should I Look For?

When you feel that your small business needs an accountant, this is the exact time to think what you are actually looking for. Hiring a wrong person might cost you a lot because a wrong person will miss out on things that you should know and this can be costly.

You should look for someone who can add some financial value to your company. Search for someone who can act as a business partner and can use his knowledge and skills to manage a small business.

How Much Do I Need to Pay?

Fees is an initial but very important part while selecting an accountant for your small business. Because you are running a small business you are very likely to have a small budget. However, still you have to hire a right accountants for your business.

You can connect to multiple accountants to get an idea about price range. There are many accounting firms like Certex London which can help you with accounting packages.

Accountants offer different packages, some charge monthly which means they will deal your finances and you have to pay at the end of the month. Some accountant, charge hourly. You have to decide how much involvement you want from your accountant.

Is He Able to Look After My Affairs?

It’s really important to confirm that your potential candidate is qualified enough and sufficiently experienced to look after your affairs. Make sure that your chosen accountant must have relevant experience in the size and sector of your industry. It’s better to consider a member of a well-reputed accountancy firm.

Where Can I Find A Good Accountant?

You can go for the personal recommendations of your family, friends or other small business owners who use qualified accountants. Also, you can seek help from best accounting services like Certax London. We can help you get best accounting service, tax strategies, tax information, professional advice and much more to help you make your business more productive.

If you are looking for a professional accountant to help you manage your small business then try Certax London, your first port of call.

The post HOW TO CHOOSE RIGHT ACCOUNTANT FOR YOUR SMALL BUSINESS appeared first on Blogs or News Offical Certax London.

Before we move to the names of best small business accounting software, we need to comprehend what does online accounting do for you and what are common features amongst these software.

• User friendly interface and navigation: you will notice that most accounting software are not graphically rich and this makes sense. There is no need for extensive graphics until and unless the software covers charts, graphs and invoice forms. Most online software are built on premises of desktop software; drop down lists, static pages, icons and buttons, fill in the blank fields and toolbars are much like the desktop applications.




• Subscriptions: unlike desktop software where you paid few hundred pounds upfront, online accounting software are charged on subscription basis. Desktop applications are generally expensive and need upgrade every 12 months. Most of the times you may realise that the application has many features that were charged and useless for you at the end of the day.  In contrast, most online cloud accounting software offer free trail at £3 to £60 per month. They do not have any lock in contract and offer free built in upgrades. Most importantly, they are cloud based and have data back up. All they need is an internet connection.




• Multiple versions: the best part for most of these accounting software is that they have pay what you use feature. The app developers create multiple versions of the application and you can choose which version is closest to your needs.




• Mobile Versions: As cloud accounting software are internet based, they can be accessed from any place. The developers have kept this in their mind and introduced mobile versions that may not offer all but the main features at least.




• Integration with complementary add-ons: the best accounting software UK are built around the idea that once small businesses grow, they will have to switch to next level of cloud based financial management applications like NetSuite. Add on solutions like invoicing and inventory management or any particular area features are available from app houses like QuickBook and Xero.




• Interactive homepages: small business accounting software UK or any other place, have usually interactive homepages that offer comprehensive dashboards. These dashboards give an overall view of accounts and flag tasks that may require immediate attention. Some of best apps have links to working Windows in the dashboard.

The best accounting software available for small businesses in UK are:

1. Sage
2. FreshBooks
3. QuicKBooks
4. ClearBooks
5. Tide
6. GoDaddy Bookkeeping
7. Kashoo Online Accounting
8. Kashflow
9. LessAccounting
10. One Up
11. Wave Accounting
12. Xero
13. Zoho Books
14. FreeAgent
15. AccountEdge

But before you choose one for your business consider few basic things like customizability, scalability, mobile versions, subscription fees, add-ons, third party integrations, back end customer support service and most importantly how many staff members can log into the site and how far you can restrict what each sees according to their roles and duties.

The post WHAT IS AVAILABLE IN ONLINE ACCOUNTING SOFTWARE appeared first on Blogs or News Offical Certax London.