Accounting Tips Guides

There are a lot of people with finance backgrounds and it is a very competitive environment, however saying that there are a lot of jobs in finance out there and it can be a very rewarding job to do.

If you want to get a good background in finance, a good way to start is to take an accounting course. Accounting degrees and courses are available in universities and school across the UK and also online.

There are a lot of places online that you can get an accounting degree - this is great if you have a busy schedule and need to fit in your degree between work/other studies. The same applies to a correspondence degree.

You can also get an accounting degree as at your local university or community college. Community colleges often offer the same night and weekend options that would also be fulfilled by the online class. If you go to university you will get an accounting degree that is likely accredited and from someplace a little more recognizable to the public at large. You will also be able to attend college in a more traditional manner. In the end, it is just a matter of your personal preference and also money.

A degree in finance is a more focused degree than accounting. For a career in finance you need to have strong mathematical skills and a good business sense. Employers will look for people who have a good academic background and possibly have some good work experience in the finance industry. It is good to try and do some volunteer work/work experience/ internships etc.

While a bachelor’s degree might help to get a start in the industry of finance, typically most careers require a master’s degree. Some of the positions in big banks/companies require a master’s level education even if they are not management level positions. A degree in finance combines managing finances and understanding the markets along with critical thinking skills,learning how to use technology in the field and applying ethics in the standards of your work.

A degree in finance will not just help you to get a job in a bank. You can also look at jobs in investment companies, insurance companies and brokerage firms.

You can obtain your degree completely online, at university or a combination of both online and off-line study. The majority of universities offer financial degree programs

You can also check with a career centre to see if any investment banks are recruiting. A lot of banks will put everyone through an extensive training programme when they start and they do not need you to have a degree or any formal qualifications to get into one of these programmes. Some banks prefer that that you haven’t done a financial degree as they like to teach you from scratch, often taking in very young students. What you do need to be is very hard working, highly motivated and smart (being a little greedy doesn’t hurt either as this is all about money - the more you want it the harder you’ll work.)

Commercial Finance people are a financial recruitment consultancy, which was established in 1998 to place candidates in banking jobs, leasing jobs and factoring jobs.

Sometimes the thought of sitting down to draft a business plan sends me running for the hills, even though I preach the importance of planning to all of my clients! Small business advice: Without planning, your bookkeeping business goes nowhere fast. When you fail to plan, you plan to fail.

What I have come to learn as a business coach is that business plans don’t have to be long to be good. In fact, a single page can contain all the essential elements you need to show where you’re taking your bookkeeping business and how you’re going to get there. The most important reason to have a business plan is to clarify your thinking about where you are taking your business. When it’s in writing, others will know and understand your vision and your plan.

Here are a few characteristics of an effective one-page business plan for your bookkeeping business:

- Simplicity. A one-page plan takes a complex subject and makes it simple.
- Focus. It focuses on what’s important. There is no room for fluff or filler.
- Versatility. It is a communication tool for employees, prospective employees, partners, shareholders, investors and bankers.
- Consistency. It sends the same message to every person who receives it, unlike a verbal presentation, which may change every time you speak.
- Flexibility. It is easy to change and update.

The Five Elements of the One-Page Business Plan:

1. The Vision Statement - What are you building?

This is the place where you describe your vision - your way. Most business coaches will tell you that vision statements should be expansive and idealistic. They should stimulate thinking and communicate passion, while painting a detailed picture of the bookkeeping business you want. The key to capturing your vision is to refrain from restricting the flow of thoughts.

2. The Mission Statement - Why does this business exist?

The mission statement describes the purpose for which your product, service or business exists. Great mission statements are short and memorable. They communicate in just a few words the company’s focus and what is being provided to customers. They answer the question, “Why will customers buy this product or service?” The mission statement should also reflect the owner’s passion and commitment. When the business satisfies an owner’s passion for creativity, independence or the need to serve, there is substance and staying power in the mission.

3. The Objectives - What results will you measure?

Objectives clarify what you are trying to accomplish in specific, measurable goals. Some of the best small business advice that I can give you is this: for an objective to be effective, it needs to be a well-defined target with quantifiable, measurable elements. There are many types of objectives, and your plan should include a variety of them. For many businesses the two most important categories will be the financial and marketing objectives. It is important, however, to tailor your objectives to cover the full scope of your bookkeeping business, focusing on the goals that are most critical to your success.

4. The Strategies - How will you grow your business?

Strategies set the direction, philosophy, values, and methodology for building and managing your company. Strategies also establish guidelines for evaluating important business decisions. In most industries there are four to six core strategies that successful businesses follow. These core strategies are easy to understand, remain relatively constant over time, are used by market leaders and result in profitable growth. Here are two examples of a core strategy: “Price isn’t everything,” and “Attract the very best employees and give them a stake in the business.” What are your strategies?

5. The Plans - What is the work to be done?

Plans are the specific actions the business must implement to achieve the objectives. Plan or action items should contribute to the growth of your bookkeeping business. Each plan or action item is, in effect, a project. Plans should be action-oriented, list specific tasks and have definitive deadlines or due dates.

Once your plan is in writing, it is now time to put that same plan into action. Putting the plan into action is the most important step because the actions deliver the results you wanted when you started this process. For most entrepreneurs, this is easy - you are already action-oriented! Here is some business advice, as well as a few suggestions, to help you put (and keep) your bookkeeping business plan in action:

- Keep the plan with you.
- Use it as a decision-making tool.
- Update it with new thoughts.
- Share it with people you trust and whose opinions you value.
- Measure your progress at least quarterly.
- Prepare a budget to match the plan.

Linda Hunt and Laurie O’Neil are the co-founders of The Bookkeeper’s Referral
Network Inc., the place where business meets great bookkeepers. To get your
copy of The 9 Disastrous Mistakes Most Freelance Bookkeeper’s Make in
Business (and How You Can Avoid Them!) visit http://www.bkpr-network.com

The essentials element of payroll administration in the UK is to accurately calculate the income tax and national insurance contributions deducted from the employee each pay period, produce payslips for each employee and account to the tax office for the payroll deductions.

Running a payroll system is natural for medium and large companies who may employ specialist payroll staff to perform these functions. Many medium companies may still choose to outsource the payroll function leaving many of the technical issues that might be encountered to a specialist payroll service.

Small businesses may choose to outsource the payroll function because they are not familiar with the paye system although HMRC do run seminars to assist employers. The payroll system not only calculates the tax and national insurance deductions but also has to deal with tax code changes, new employees and changes to existing employees plus taxable benefits and allowances such as statutory payments for sickness and maternity leave, contracting out of the state pension scheme and student loans.

The main benefit of manually producing the employee payroll is the reduced cost although the time spent on the payroll function by the proprietor may be better spent running the business. The cost may not be the cheapest option if an employee is required to produce the payroll. Purchasing payroll software can save significant time and costs for the small business that chooses to prepare and control its own payroll function. Although time is more important as the payroll production cost is not usually a big issue.

Outsourcing payroll adds a small additional cost to running the business but would normally carry worthwhile benefits in reducing the time spent on the function and reduces the paye administrative burden.

Main benefits outsourcing the payroll function.

1. Frees up time in calculating the payroll deductions and dealing with different and sometimes complex employee circumstances.

2. Using a professional outsourcing service to advise on potential payroll problems and difficulties.

3. The cost of outsourcing payroll should be compared against the cost of employing specialist in house payroll staff.

4. Payroll services use payroll software and are more likely to produce accurate tax and national insurance deductions and pay records reducing the prospect of problems with the tax authorities.

5. Payroll administration such as preparing the tax deductions schedules, dealing with starters and leavers, year end certificates for employees and the employer annual returns are normally all automated as part of the payroll service

6. The outsourced service company should also be responsible for producing employee payslips, advising tax and deductions liability and in larger businesses also provide a payroll analysis for accounting purposes.

Alternatives to outsourcing payroll functions.

Finding a suitable outsourced payroll service is not difficult. Local telephone directories or searching the internet would produce many potential payroll service providers.

Many accountancy firms offer payroll services to their clients and although the prices may struggle to be competitive price is always negotiable. Using the business accountant for the payroll has advantages since a substantial cost area for most businesses is already known to the accountant since they prepare the numbers.

Choosing payroll software.

The major alternative to outsourcing the payroll is for the business to acquire and use payroll software.

Larger companies require payroll software that has incorporated within it all the potential pay scenarios and also be capable of dealing with high numbers of employees. Large comprehensive packages can be complex to operate and require specialist wages staff.

Small business may choose simpler less complex payroll software packages that meet the basic needs of the business. It is important the person running the payroll within the wages function understands the payroll essentials and legal payroll administration requirements.

The advantages of choosing payroll software is basically the cost should save the business money against outsourcing the payroll, should retain control over the function and liabilities and ideally should take no more time that supplying employee details and gross wages to the payroll service.

If the business chooses to adopt a payroll software package then the complexity of the package should be considered and also the attributes and capabilities of the chosen software to produce all the payroll requirements in relation to pay and wage deductions, paye administration and employee payslips.

Terry Cartwright is a qualified accountant in the UK producing Accounting Software and Payroll Software packages for self employed and small limited companies. The payroll spreadsheets are suitable for up to 20 employees, produce the tax and insurance deductions, automate payslips and provide the employer with a full automated paye administration system

Fixed assets are the long term items the business owns which the business has acquired and uses to generate business over a number of years. Fixed assets consist of tangible items such as land and buildings, plant and machinery, fixtures and fittings, vehicles and computers.

The numerical value of the fixed assets shown in the balance sheet represents the original cost of those items less the amount that has written off as accumulated depreciation. Depreciation is the amount that management has decided to reduce the net worth of the assets as those assets are used and also serves to put aside from the declared management profits that amount which would often be required at some future date to replace those assets.

Fixed assets include a category known as intangible assets. An intangible asset is a long term acquisition by the business that may not be a physical item. Intangible assets would include items such as goodwill which is an amount of money the business has paid out to acquire another business or certain rights.

Other intangible assets would be investments in royalties, trade marks and patents. Items the business has bought to support and extend its business empire. Long term investments such as loans, debentures and shareholdings would also be regarded as intangible assets.

Current assets are the items the business owns which can change from day to day and provide a snapshot of the asset liquidity of the business. Current assets include stock which will be made up of both finished stock available for resale, work in progress and raw materials.

Other current assets include debtors which is the short term money owed to the business often from clients and customers who have received credit terms. Debtors may also include money the business has paid out in advance of the liability, prepayments.

If the business has a credit balance at the bank then this is also included in current assets as would be a credit balance on a business credit card, cash in hand and other short term investments the business can quickly turn into cash.

Current liabilities are normally shown immediately under the current assets as the size of each balance is an indication of the liquidity of the business.

Current liabilities represent the short term debts of the business being amounts owing that should be repaid within one year which is before the next balance sheet is required for publication by most companies.

Current liabilities include trade creditors which are the short term debts owed by the business to its suppliers and other creditors since it is normal practise to separate debts owed to the tax authority such as vat, tax deductions from sub contractors, income tax and national insurance liabilities and other corporate taxes.

If the business has short term loans repayable within one year these items would be included with items such as bank overdrafts and other short term financial arrangements.

Long term debts and financial agreements including director loan accounts which do not have a short term repayment plan would be long term liabilities. Creditors are also included in long term liabilities where there is an agreement for repayment longer than one year.

The final section of the balance sheet concerns the capital of the business. While the owners of that capital such as the shareholding regard the item as an asset to themselves for the business it is a long term liability as the business effectively owes that money to its shareholders as is the case of retained profits and reserves which is also owned by the shareholders.

The total of the assets side of the balance sheet and the liabilities side must always be the same. This is because to produce a balance sheet double entry bookkeeping is used to record all financial transactions. So whenever an accounting entry is made it is made twice to reflect the action and reaction.

An example of double entry bookkeeping would be purchase of stock from a supplier. The stock acquired is an asset while until paid the amount invoiced by the supplier is a debt, the creditor and a liability. In accounting terms the transaction is recorded by debiting the stock account and crediting the trade creditor account.

Alternatively when goods are sold by the business the double entry bookkeeping would be to debit the customer account, the debtor, as the proceeds owed by the customer is now an asset. The equal and opposite financial record being to reduce the stock value since those goods are now sold and no longer an asset of the business.

Terry Cartwright, CEO DIY Accounting, a qualified accountant in the UK, designs Accounting Software on excel spreadsheets and Payroll Software for small to medium sized business providing a complete accounting solution and also supplies Company Formation packages for new limited liability companies

Goal setting is crucial to the success of any business, but is particularly important for entrepreneurs in the bookkeeping service business who can become distracted with multiple priorities. Goal setting allows us to be proactive, instead of just being reactive. We’ve all had days where we leap from one crisis to another, but we know that’s not a preferred mode of operation for our bookkeeping services! Goals direct actions, give us something to aim for, and serve as a yardstick for measuring our bookkeeping business’s success.

When setting business goals, I use a successful goal-setting formula that a business coach
mentor taught me. The formula incorporates a strategy or strategies for accomplishing the goal: “I will (goal + performance measure) by (specific actions).”

For example, suppose that you want to increase revenue. First specify the goal: “I will increase revenue this month by twenty-five percent.” Setting a specific goal builds in the criteria you will use to evaluate your success.

In this case, at the end of the month, you’ll either have increased sales by twenty-five percent compared to the previous month or not. Then, specify the strategy that you will use to work towards accomplishing the goal: “I will increase sales this month by twenty-five percent by offering a ten-percent-off sale on all inventory and advertising this sale in the local newspapers.”

This makes evaluating your success or failure easy because your goal is specific rather than general. Suddenly, instead of just having a goal that you may or may not achieve, you have a specific plan to follow to achieve the goal you have set.

If you avoid setting goals, here are a few bookkeeping business secrets for goal-setting success:

Bookkeeping Business Secret #1: Have Short-Term and Long-Term Goals

The first thing I do when setting goals is to consider where I would like to be five years from now. Once I have determined my long-term goal or ideal scene, I work backwards by breaking this ideal scene down into short-term goals and specifying milestones that need to be achieved along the way.

If the task seems too daunting with a five-year plan, establish 90-day goals. Limit goals to three specific things that you want to accomplish. Write out each goal and put a due date next to it. Then write out each step that needs to be taken, by when, and what type of support you need to accomplish that goal. Then schedule in your calendar time to honor the commitment you just made to yourself.

Bookkeeping Business Secret #2: Be Relevant

Goals should help you attain a specific aim. Beware of goals that keep you busy but do not contribute directly to the overall goal you have set for yourself and the success of your bookkeeping business. If you don’t believe your goals are worthwhile, you won’t make the necessary effort to achieve them. For example, several years ago I wanted to work a four-day work week. I set the goal, but did not really believe that I could or should work only four days a week. Guess what? It never happened because I was not truly aligned with the goal.

Bookkeeping Business Secret #3: Review Your Goals Constantly

Review your goals daily. Keep them in plain view - by your desk or next to your computer. Goals are not something that you write down and file in a drawer. The more you embody your goals, the more real they become and the more aware you are of opportunities that cross your path to help you achieve those goals.

I write my goals on colorful 4×6 index cards and keep them by my bedside. I read them first thing each morning and then again before I go to sleep at night. This keeps me focused and moving toward my goals.

Bookkeeping Business Secret #4: Stay on Track

Once you establish clear goals you will begin to notice that opportunities begin to present themselves. When this happens, I ask myself a very important question which helps me to decide whether I should look further into the opportunity or let it go - “Does this opportunity bring me closer to my goal or further away from it?”

By asking yourself this simple question, you’ll be able to take decisive action towards accomplishing your goals. For example, a lovely salesperson from ADP has been calling me to schedule a meeting to show me their services and how they have changed. By asking myself, “Does this opportunity bring me closer to my goal or further away from it?” I have no problem deciding whether or not I should schedule the meeting.

Linda Hunt and Laurie O’Neil are the co-founders of The Bookkeeper’s Referral
Network Inc., the place where business meets great bookkeepers. To get your
copy of The 9 Disastrous Mistakes Most Freelance Bookkeeper’s Make in
Business (and How You Can Avoid Them!) visit http://www.bkpr-network.com

A key element to entrepreneurial success is choosing the right people to be part of your management team. In fact, angel investors and venture capitalists both view strength of the management team as the major determining factor in whether they are willing to make an investment in the company. But it is also important for an entrepreneur to have outside advisors he or she can trust and rely on, an accountant being one of these. Even a start-up company with little or no revenues needs to have a good accountant available, as well as an attorney who has experience with young businesses.

Accountants are important members of a company’s team. If you’re a start-up or small business you may not have the resources to hire an accountant full time. There are software programs that can do most of the data entry but it’s still a good idea to hire an accounting firm on a consulting basis to oversee your accounting systems, processing, and tax returns.

Attorneys are just as important, perhaps more so than accountants. An attorney can guide you to select the most appropriate way to set up your business. The best time to retain an attorney is before you need one. It’s worth the money to know that if something comes up you have a legal expert who is familiar with your company. Attorneys have valuable contacts with venture capital firms and private investors. They know what is reasonable in a private offering , what isn’t, and what must be included.

An attorney can also help you protect your intellectual property, trademarks, trade names and trade secrets. While it may seem expensive to have an experienced attorney on your management team it will avoid problems later.

Business Appraisers can tell you how much your business is worth and why. If you’re considering refinancing, that business appraisal can help you determine how much debt the company can carry.

If you’re considering selling your business the business appraiser can provide a ball park valuation. Of course the buyer will want to conduct their own due diligence and may even hire their own independent business appraiser, that’s to be expected. The appraisal you have completed gives you a bench mark to start negotiations.

A Business Plan Consultant can expedite the business planning process. If you’re looking for investors a well thought out concise business plan is critical. If you’re considering starting a company, a business plan will help you improve your chances for success and avoid making serious mistakes. You may be the only one who reads this plan, although you should have input from a number of other people with business experience. A business plan is an important ingredient to the success of a start-up business.

Using Consultants to provide services you need on an outsourcing basis can be much less expensive in the long run than hiring someone as an employee. The consultant probably will cost more on an hourly basis but you only need their services on a project basis. Consultants can provide programming, technical assistance, and communications expertise, just to name a few areas.

When hiring a consultant, or consulting firm, ask for references and check those references. A good place to start the search for a consulting firm is to ask your attorney and accountant for recommendations.

More tips for entrepreneurs . Dee Power is the author of several nonfiction books. Find out why your business needs an attorney http://www.capital-connection.com/attorneys.html