Your Trusted Accountants.

Accounting is a way all businesses keep track of their operations. Business accounting has four distinctive functions of systematically recording, analysing, interpreting and presenting of financial information. In a small business this job is mainly outsourced to an accounting practice by the business owner.

Financial information is ‘systematically recorded’ by an accounting process called bookkeeping. The software used to record this information such as QuickBooks, Xero and Zoho Books are called Cloud Bookkeeping software. Bookkeeping may be done by one person or accountant in a small business, or by different teams of bookkeepers in large organisations.

Financial information is ‘analysed’ and ‘interpreted’ by accountants so the business owner can make important decisions. ‘Presentation’ of financial information is organised into reports such as Profit & Loss, Balance Sheet and Cashflow. These financial reports are prepared by practice accountants for the small business and show the financial health of a business and help owners make smart decisions with their money.

Financial Reports are useful to different stakeholders including shareholders, potential partners, lenders, regulatory and tax authorities. Business accounting helps business owners meet their compliance obligations.

An accounting compliance in the UK means obligations of the director or owner of the business to comply with HMRC and Companies House with any demand or request or reporting disclosures such as Company Statutory Accounts, Companies House Shortened Accounts, Corporation Tax, Payroll, Auto Enrolment, and VAT Returns.

A small company is only required to file unaudited abridged accounts consisting mainly of a balance sheet with a limited number of accompanying explanatory notes, generally without a profit & loss account and detailed notes. A micro-entity company enjoys the same exemptions.

The advantages of simplified, shortened, abridged or filleted accounts include that they are easier to prepare, and therefore reduce the administrative burden on small companies. There is also less information available on Companies House public domain, preventing competitors and the general public from learning much about your business.

The main disadvantage for filing shortened accounts with no Profit & Loss report are much less useful to banks or lenders if you are trying to raise funding. The abbreviated or abridged accounts are also only of limited use to trade creditors. If you are looking to bring a partner in the business, the shortened accounts do not help your potential partners to establish financial health of your business to risk a long-term association.

However, you can request a copy of the full set of accounts from your accountants if required to be presented to the lenders or other stakeholders. Please contact our specialists to learn more about Management or a full set of accounts.

A Digital Accounting KPI Dashboard is used by a small business owner or their Finance Director to maintain an overview of their company’s financial health and overall performance.

Your cloud bookkeeping software is the best place to start setting up your accounting dashboard to see a real-time view of where your business stands so you can make smart business decisions.

Once you have defined your accounting key performance indicators (KPIs), you should monitor them regularly. You can automate the data input process through receipt capturing software such as Dext, Zoho Expense and Expensify to your cloud bookkeeping software. The quality of data input into your accounting system is crucial to get the most up to date KPIs information in the most appropriate way to help you to run your business efficiently.

Some examples of the accounting and finance KPI may include; Total credit sales, Total cash sales, Debtor days, Creditor days, Return on Investment, Gross & Net Profit Ratios, Bank Balance, Break Even Point and Per Employee turnover.

At Heighten, we produce an Accounting Records Quality Report to ensure that you are getting the most from your system. This report helps analyse any weaknesses in your accounting systems, the consequences and our suggestions on how to improve them.

If you need help in setting up your accounting dashboard or getting training with ongoing telephone support, please contact us.

Accounting trusted advisors are more than just your accountants. Unlike typical accountants, your trusted accounting and tax advisors, guide you through challenging times in your businesses, and act proactively to demonstrate that they are on your side.

Being proactive trusted advisors at Heighten Accountants, instead of just writing an email, we would call you to make it more personal. We would always be ready to offer you help to reassure that we care about you and your business. And when we write, our email or letter looks like this:

“Cashflow is the key to ensuring businesses survive and prosper, and I’ve been thinking about how you can improve yours. As part of that I’ve been comparing your business to 99 others in your industry.

Since the only source of sustainable cash flow for any business is making profitable sales and getting paid for them, probably my two most interesting preliminary findings are these:

Firstly, the good news is that your gross margin is in the top 30% of your industry. So, given your success in this area already perhaps there is scope to push home your advantage even further by increasing your margins – adding a 10th to your margins for example, would add another £9,580.00 to your profits every year.

And secondly, if you could reduce your debtor days so that you collect the money you are owed from customers as quickly as those in the upper quartile in your industry, again even without making any more sales, you would have a further extra £892.04 in your bank account”.

To know more about how Heighten Accountants’ Trusted Advisor can help you during challenges, please schedule a call with us.

Business accounting practical ideas and tools help improve cash conversion cycles dramatically by generating sufficient cash internally to fuel your small and medium size business. Accounting system supports your KPI measures for revenue and profit.

Every business, no matter how successful, must continually focus on protecting and strengthening its cash flow. Your business accounting should support the following areas to help you shape a wealth-building business:

Accounting for an equivalent market owner’s wage
Using a One Page Plan as a performance measurement and improvement system
Focus on profit than merely on revenue
Set Labour Efficiency Targets
Bring Tax consideration early to improve cash flow
At Heighten, we believe that business accounting should be genuinely proactive in ways that really make a difference by improving your cash flow in your business. Book a free consultation with us to know more.