Accountants Resources

What is an accountant?

An accountant tracks an organisation’s income and expenses in a systematic order. An accountant can use these records to good effect and evaluate a company’s financial status. The most basic accounting service is bookkeeping, which involves keeping a record of all financial transactions. The financial statements are prepared from the financial transactions, and they are known as balance sheets or income statements. This information is then rolled into tax services, which is another basic of accountancy. Accountants not only work on bookkeeping, but the diversity of their role can cover auditing, business valuations, business consulting, tax planning and financial planning.

How are accountants helpful?

They are helpful in a variety of ways. They use their skills to maintain tax returns, pay taxes and produce balance sheets. Accountants are very useful to an organisation, simply because they have essential knowledge of business consulting and business valuation. Accountants also put into order the financial statements and audits which are important pieces of work to present before a potential investor. Any accountant can positively change an organisation’s annual turnover and tax time meeting into a resource that proves invaluable.

What is the importance of bookkeeping in accounting?

Bookkeeping is essential to any organisation. In this method of service, an accountant keeps a comprehensive record of how much debt is owed by the client and how much is owed to the client. These transaction figures can also indicate what expenses have been used to purchase equipment and inventory. The accountant will also take care of accounts payable and accounts receivable. They also work on financial statements, such as cash flow statements, balance sheets, income statements and bank reconciliations.

What are tax services in accounting?

Taxes are an important factor within an organisation, and cannot be easily underestimated. Accountants, at the time of tax rolling, help a client to prepare a tax return and check that the necessary steps have been undertaken and also check that there are no filled in errors which may trigger an audit. This method of accountancy is called a tax service. Effective accountants always offer their clients various ways to save money, by putting tax saving and planning strategies in place. When tackling these kinds of issues, an accountant can then look for the ways of adding value to their client’s business.

What is an audit in accounting?

An audit is a very important section of accounting for a public company, not much though for a private company because they do not have to provide audits. A private company will ask for an audit only when an outside investor or a bank demands them. There are accountants who provide audits for private companies. Accountants provide audits for private companies because their client seeks funding or just requires an independent opinion on their financial statements, company books and financial position.
What is a review in accounting?

Similar to audits, but much less detailed. The work of the accountant when performing a review is to make sure that the financial statements show the organisation’s financial status in a fair way. Reviews cost much less than an audit.

What is a compilation in accounting?

An even less detailed method of accounting is known as a compilation. The accountant utilises the financial information from the ledger and produces a financial statement from it, known as a compilation.

What is financial planning in accounting?

It is an important part of an accountant’s planning method and ensures that the focus is turned toward the business’ owners. It is an effective method to use if a client wants to put into place a long term insurance plan, will or trust.

What is business valuation in accounting?

A specialist service offered by accountants, but can also be very expensive. The method of business valuation is used when an organisation decides to sell their company. They are also helpful when an organisation needs to apply for a business loan. Experienced accountants can undertake this task very effectively.

What is business consulting?

Business consulting is a very important and beneficial part of accountancy. The price of this service offered by an accountant can also be very high, because of its method of complexity. If an organisation wants to utilise profits within their company, but also cut costs, the use of an accountant with business consulting experienced may be required. Both individuals and companies can benefit from this service.

What is Value Added Tax or VAT?

It is a legal requirement that a company registers with VAT if their taxable supplies exceed the VAT threshold of £67,000. It is recommended by accountants that most companies do register for VAT purposes. If an organisation has not registered or they are waiting for their registration to come through, they can write on their invoice VAT invoice to follow or VAT registration pending and still invoice clients. Once an organisation has received their registration, they then need to dig out the clients file and invoice them for the VAT. This invoice will contain an organisation’s VAT number and can be used to invoice clients for the service they have used. When VAT is charged, it can also be claimed back. Whenever VAT is claimed back, an organisation must ensure that, where possible, all of the invoices and receipts are made out to their company. Company purchases that contain VAT can be claimed back, and also where any invoice or receipt contains a VAT registration number. If a company is not sure whether they should pay VAT or claim it back, it is useful to ask an accountant. VAT returns are paid quarterly and if any VAT is owed to an organisation, it is paid after the claim has been submitted.

How does an organisation avoid any investigations by the Inland Revenue?

It is always useful to employ the service of an accountant. Try to keep the books up to date and try not to use the company cheque book to pay any personal expenses. Also, try to resist borrowing money from the business account. Do not round up expenses and always be honest when recording expenses. Try to ensure that the personal and company returns have been submitted to the relevant authorities by the appropriate due date/s. Do not back date any dividends and minute the directors meetings that vote any dividends.