4 Tips to Help Your Small Businesses Prepare Their Annual Accounts

Every year, companies regardless of size or type, are required to prepare and submit their annual accounts. These are yearly statements that provide detailed information on a business’ activities, finances, composition, profits, and other relevant matters. Major companies normally hire someone to do this for them; someone who is trained and experienced in making annual accounts. But it’s a different story for small businesses, especially the new ones.

If you are a small business owner, there are several things you need to know and remember to make sure that you come up with a good annual account. It is important to understand each tip to make sure that everything is in order.

  1. Understand what an annual account is.

Before doing anything, find time to understand what an annual account is and what it constitutes. As it contains a report or information about the company, it should more or less include the following details: business address, nature of business, list of officers including directors, shareholders, accounting records or financial statement, a summary of profits and losses, and a list of the business’ assets and liabilities.

Assign someone to take care of the annual account, but make sure that he/she is qualified to do so. The perfect choice would be an accountant and auditor team. The two can help each other ensure that everything is covered; that all requirements are ready. If you do not have an accountant or an auditor, find and purchase a good accounting software.

  1. Work on a checklist of accounting records.

Small businesses should have regularly updated accounting records. Together with your accountant, make a list of these records. Be sure to include the following:

  • A list of your small company’s fixed assets, particularly the property where your business stands on. Also, include in the list all the equipment your company owns.
  • Floating assets, which refer to unsold stocks and projects or work that are in progress, should be on the list, too.
  • A list of your company’s debts and all investments, referred to as liabilities, should also be in the report.
  • Information detailing the company’s payroll expenses.
  • A record of the company’s purchases and sales, as well as bank statements and checkbooks.
  1. Meet and sit down with your accountant.

Before submitting the company’s annual account, schedule a meeting with your accountant. Sit down with him/her and review everything that was prepared. If there are things that need to be improved, work with your accountant and make sure this is completed at the soonest time possible. Don’t rush him/her as this might lead to mistakes. Everything in the annual account should be accurate and presented clearly. It is your responsibility to verify this.

  1. If you find an error in the report, carefully correct this by doing the following:

  • First, verify the error.
  • Check the company’s records alongside the error in the report. This is why you should have updated records the whole year ‘round.
  • Once you have checked company records, carefully make the corrections. Work hand-in-hand with your accountant.
  • Finally, check the annual account again to make sure that there are no other errors.

Once everything is in place, have your accountant submit the annual account. If your company is late in submitting, you can incur penalties.

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3 Ways Credit Repair Can Help Improve Individual Finances

If you have a credit card, you know how important it is to maintain a good credit score. If you have bad credit, you won’t only have a difficult time applying for loans or making purchases, but it can also leave you jobless or homeless. Businesses often refer to your credit record to verify character information, so if companies see that you’ve had bad credit for a long time, they won’t accept you for the job you applied for. In addition to this, loan companies will turn down your application. Your finances will go on an all-time low and may eventually crash. To prevent this from happening, you need to repair your credit. This will greatly help improve your individual or personal finances. Here    are three ways credit repair can work for you:

 

  1. Repairing your credit will lead to better terms and rates for your loans.

As previously mentioned, bad credit can render you homeless because you won’t be able to get a loan. The only way to correct this is by repairing your credit. Once loan companies see that your credit score has improved, they will offer you better loan terms and rates. Since interest rates are based on your credit history, which shows your payment trend, you’ll pay a lower rate for your loan. With this, you can finally find a good home for you and your family. You can even buy a new car!

 

  1. Lesser expenses for utility services.

Utility services like water and electricity are important needs. You cannot take them for granted. With bad credit, you’ll be paying high deposits to your service provider since they refer to your credit record when you apply for their services. Once your credit score improves and you start paying accounts on time, you won’t have problems with water and electricity services because you won’t have to pay high deposits.

 

  1. You can continue using your credit card.

Admit it; you like using your credit card because it’s more convenient. It’s also practical because you don’t have to bring stacks of cash with you. But with bad credit, you won’t be allowed to use your credit card or apply for a new one. Credit card companies will also refuse to increase your credit limit. If you want to change this and keep using your credit card, you’ll need to repair your credit. Once your credit score increases and your credit history improves, credit card companies will trust you again and give you what you want (or need).

3 Important Accounting Tips Small Businesses Can Use

Business owners know that one of the most important components of their company’s success is proper accounting. A lot of people, however, do not want to have anything to do with it because it can be quite complicated. Of course, you’ll have to have formal training and education in accounting to be able to perform the job well. But if you study and persevere, you can work hand-in-hand with your accountant in making sure that your company’s records are complete and accurate.

To help you start out, here are three accounting tips that you can apply or practice.

 

  1. Do not combine personal and business expenses.

Most small businesses often have a limited number of employees. So what usually happens is that there is a tendency for you to mix your personal with business expenses. This can present problems, not only for you but for the company as well. If you have an accountant, he/she should be the one holding records of all business expenses. Your personal expenses, on the other hand, should be kept in a separate bank account. This may seem like a simple thing to do, but as you go on with your business dealings, you’ll find this tip extremely helpful.

 

  1. Regularly track your records and make sure they are always accurate.

All companies have daily accounting activities, which mean there are new records every day. Your accountant should be on top of the situation by keeping track of these. Even if your business uses an online banking system, your accountant still needs to keep a hard copy of all the company’s financial records.  And it should all be kept in one place, like in a folder or envelope in a filing cabinet or drawer. Likewise, your company should use an accounting program so that your accountant can update records through the online banking system, the accounting program, and the files inside the cabinet.

Aside from keeping track of daily accounting records, it is also important to check each transaction for accuracy. If these records are not accurate, even if they are regularly updated, they won’t do your business any good.

 

  1. Never forget any receipt.

Nowadays, stores and restaurants have computerized receipts, so this is what you will normally get when you purchase something. While this is all right, it is still recommended that you ask for a written receipt as its ink does not easily fade. If you do have computerized receipts (which uses thermal paper), you can have them photocopied to make sure you still have a copy of them when the ink starts to fade. This is important because you have to file all the receipts and keep them in one place. Additionally, you or rather, your accountant; should have an accurate count of all receipts. So do not throw away your receipts no matter how small the amount spent was. You’ll need the receipts for categorizing expenses, as well as for tax-related reasons.