When talking about business, the only trump card to owners is to have everything planned. Unplanned deeds in your business can be followed by a very disastrous impact over your business. It doesn’t really matter if you have a small or a huge business firm. It doesn’t matter when you started. What matters is, how you are leading it. Since measured decisions can’t be taken in an unmeasured business, you have to get ready with your numbers and predictions piled up.
A complete business planning includes planning relating to all departments of business. The major of all is financial planning. As business people ultimately revolve around money, they should have a well-planned strategy of spending that. Also there are some who intentionally don’t make records to evade from taxes. If you do it today to evade taxes, prepare yourself for confronting HMRC with expensive weapons someday.
Those who are doing it but doing it wrong may face even worse consequences. Here are some of the wrongdoings in bookkeeping that small and medium scale businesses make in their businesses:
- Inaccurate treatment of significant purchases: Although these are the very basics of accounting, still many people do it. Treating vital purchases wholly in current year’s accounts may unknowingly lead you to leave your accounts to audit in hands of HMRC in near future. Well that may be done by some under-trained accountant but after all the suffering comes to owners.
- Not having well-planned capital injections: In case you are starting afresh, make sure that you have mindfully planned the amount of capital injection in several accounts. You must have a consolidated reason of why you have to spend a certain amount on something.
- Lacking a fair outline of income disposal: Here I am discussing about those budding firms that are struggling to organize their business houses in all manners. Before anything, you must have a fair outline of where and why should you be investing a definite amount on a bracket of expenses. You should astutely be making several accounts and manage their transactions henceforth. Also you must note each and every transaction that you do between several accounts. If you are paying rent of your building from account reserved for paying salaries; mention it.
- Storing your receipts is not an option: Even if you are recording every in and out of your business, it is incomplete until you keep receipts with you. Paperwork here pays you much assistance. Paperwork comes to your salvage when you have to evidence some of your purchase or expense. You may not be accountable for receiving any tax return over some purchase if you have no receipt backing that transaction. According to taxation authorities, you must be keeping your receipts conserved with you for not less than 15 months after you have sent the tax return.
- Personal and business are to be separately maintained: Just as you two different individuals at work and at home, your accounts should also be kept that distinct. You may wholly and solely be the staff of your company but you can’t get rid of maintaining identity of both the accounts differently. A business may indirectly be paying for your lifestyle but it should be shown in both the accounts. If you make some knave tasks of willingly including personal expenses to your business account and falsely manipulate your incomes, chances are high that someday or another you would have to pay a huge sum against it.
- Trusting everyone with your financial files: If as an owner you trust many for your financial files, you may land in a huge fuss someday. A discretionary access to should be given to different parties separately. Basically what here I mean is, you should be giving only the required access to the person receiving the file. If you want him to just read, he should not be granted with a write, delete or insert authority.
- Having less backup options: Although many companies today rely upon third parties for their data by having cloud computing solutions but just having that is not enough. You must have a complete backup of your receipts and financial reports at more than one place. For that you may have to keep soft as well as hard copies. Otherwise opt for the best cloud computing service and simultaneously have your records well preserved with you in any way you want to.
- Improper reports: Improper reports are a sign of improper records. The inefficiency of your accounts team to have all the records, or sometimes having a faulty method of recording may be the reasons behind having improper reports. These predict wrong picture of your business so it is advisable to use the most apposite accounting methods.
There are a lot more of sins that your accounts team may deliberately or ignorantly perform. The best way to avoid these issues is to have a firm locking their eyes over your accounts and looking after it. Trilogy Accountancy Services is one of the most experienced firms working in the direction. It has been satisfying customers since 34 years. Without any second thoughts, this company would be the best option to invest in.