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Archive for December, 2011

Accountants – Why Financial Forecasting Is Critical To Survival

Success is not as elusive as you might think; it is actually manageable. Managing the success of your business requires smart budgeting and forecasting, something which accountants specialise in. It is not required that you fight it out alone. In fact you can have a team of professionals to support you in managing your business success.

Financial forecasting is of course no easy task. A lot of factors change over time, making the market more volatile than it already is. Nevertheless, the foundations of forecasting do not change. Planning your future can be challenging but being pro-active and planning ahead can enable greater success. It can enable you to set the course of your business to where you want it to be.

First off, it’s important for your financial forecast to be comprehensive. This means that you prepare all the projected financial statements that allow you to determine future levels of accounts, including profits and debts. With the aid of accountants, you can develop a financial plan that’s comprehensive and accurate, making forecasting a lot easier.

Two of the most critical projected financial statements are pro forma income statements and pro forma balance sheets, as well as projected cash flow. Pro forma income statements help you project anticipated earnings within a specific period. To derive this, you generally need to establish a sales projection, create a production schedule, determine other expenditures and then compute projected profit.

However, financial planning does not end with anticipating earnings. It is not enough to show forecasted profits because what’s more important is cash-on-hand. Thus, you also need to make projected cash flows and then present a plan for managing cash flow. Managing cash flow includes budgeting and you should look to contact accountants at any stage, if you need expert help in this area. Cash is what makes your business, or any business for that matter, so it is important to stay afloat.

Projected balance sheets on the other hand provide you with information on the expected cumulative changes to your business, particularly net worth. It is not enough to just see your company’s assets grow but it is also important to understand whether you’re incurring a lot of debt as a consequence, which may be bad for your bottom line.

Projections, no matter how accurately done they may be, are subject to adjustments. Actual results can be significantly different from your projections. Your business can end up with any one of the possible scenarios identified through financial analysis. Luckily, your accountants can help you with simulating alternative outcomes and help you prepare for each one, making you always on top of your game.

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Accounting & Bookkeeping Group Australia Pty Ltd

Call Austin at 0403595274



Accountants for Contractors VS Traditional Accountants

This article aims to highlight the main differences between accountants for contractors and a traditional accountancy practice.

If you are a contract worker or freelancer operating your own personal limited company, you should really be using an accounting firm that specialises in solutions for contract workers. Here are the reasons why you should consider using accountants for contractors:

1 – Specialists
Accountants for contractors will give you best advice on how to operate your company in the most tax efficient way as a contract worker. You have access to tax saving initiatives such as the FLAT RATE VAT scheme, which you may not be advised about when using a traditional accountancy practice.

2 – Financial Advice
Many accountants for contractors can also provide financial advice on mortgages, pensions and insurance which are specifically designed for contractors and freelancers.

3 – More personable
Generally speaking the service you will receive from accountants for contractors will be more personable than a traditional accountancy practice. It is likely you will be allocated a dedicated Account Manager who you will be able to contact on a regular basis.

4 – Can take the weight off your shoulders
Accountants for Contractors tend to have tailored accounting packages designed specifically for contractors that do not want the burden of administering their bookkeeping, tax affairs and general administration. It is likely that you will not find a package specifically for contractors when using a traditional accountancy practice.

5 – Fixed monthly fee
Contractor accountants should only promote a fixed monthly fee. If you do come across an accountancy firm charging a percentage of your turnover run a mile!

What should your accountants do for you?

Here are some of the accounting features your contractor accountants should offer:

-IR35 contract reviews
-Weekly or monthly payroll for one fee earning director & an additional non fee earning employee
-Quarterly PAYE payment notification
-Quarterly VAT returns
-Annual PAYE returns; including P35s and P11Ds
-Annual Statutory Accounts (Full and abbreviated)
-Annual corporation tax computations and returns
-Annual personal tax return for the director.
-Dividend administration
-Support for all secretarial matters
-Dealing with all routine correspondence from HMRC and Companies House
-Preparation of all mortgage/tenancy references
-Access to exclusive contractor financial services
-Provision of a comprehensive spreadsheet that provides
-key financial information
-Full book keeping service – simply forward all your company paperwork
-Preparation of quarterly management accounts
-Registered Office Service
-Sales Invoicing – send us a timesheet – we invoice your client
-Preparation of weekly/monthly advice sheets; highlights director payments and available profit
-Professional Indemnity, Employer’s Liability and Public Liability Insurance

I hope this article on accountants for contractors has been helpful and informative.

Accounting & Bookkeeping Group Australia has many specialists to provide tailored services for contractors. Contact us now at 0403595274 or to find out.

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