Five Reasons to Prepare your Accounts Early
Having your accounts prepared for your business is not the top of every business owners' agenda. However having your accounts prepared has a multitude of benefits and most businesses do not take advantage of these.
Here are some of the benefits of having your businesses' accounts prepared as soon as practical. In no particular order, here are our top five reasons for preparing accounts early.
How much Tax to Pay
Depending on your business structure, you may have a corporation or income tax liability which is proportionate to the profits for the year. No one looks forward to paying tax however knowing how much you need to pay in good time will certainly mean you can plan your cashflow accordingly.
If you don't know how well the business has done, then paying yourself a bonus or voting dividends is more like guess-work then using informed management. Dividends could end up being "illegal" and may require repayment.
Forecasting & Budgeting
In order to make accurate budgets & forecasts then using the most up to date financial accounts is crucial. Too often, budgets & forecasts have to be revised following preparation of the year-end accounts; this can be costly and lead to ill-informed decisions which may be irrevocable.
Once the accounts have been completed, then financial records can then be archived into the "basemen" of the business premises. This can save significant amounts of space in business premises.
In order to try and mitigate the personal and business tax liabilities it is important to understand the current tax position. For instance, if the business has made a loss in the current year then that will affect the coming year's planning.
If you're interested in discussing any points raised in this blog or anything tax or accounts related, please call in to our Exeter office or contact Shane Cann on 01392 432525 or
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