Many companies choose to keep their limited company accounting in house. Whether this is your business or not, we’re sharing six ways to take the stress out of your accounting. You can thank us later!
You may already be realising that running a limited company is pretty time consuming! You’ll probably have a few employees to look after and you’re seeing that the more you grow, the more accounting processes there are to keep on top of too.
Take it from us, we know money and accounting can cause stress and even burn out, so let’s hand over to our Client Relationship Director Jake, to guide us through six stress-relieving tips. Take it away Jake.
1. Stick to deadlines, set reminders and plan ahead
It can be very difficult to stay on top of your limited company accounts if you’re completely oblivious to the various deadlines and legal requirements.
This may shock you (or maybe not if this is you!), but some business owners don’t know when tax returns or payroll need to be completed. Whilst this is okay if you have an accountant or dedicated team member who looks after your accounts, when you don’t, it’s your responsibility.
It’s a good idea to keep a record of when everything is due and set reminders in your calendar, so you don’t forget your financial deadlines.
What deadlines do limited company owners need to make?
Annually your limited company must prepare:
- Financial Statements: due to be filed with Companies House within 9 months of the financial year end (or within 21 months from the date of incorporation if first year)
- A CT600 (corporation tax return): due to be filed with HMRC within 12 months after your company’s financial year end. The tricky part is that you have 9 months and 1 day after your company’s financial year end to pay any taxes due – therefore filing your CT600 and Annual Accounts together is advised.
- A confirmation statement: due to be filed with Companies House within 14 days of the end of your review period. This date is either 12 months from the date you incorporated or from the date of your last filed statement. (Any statutory changes within your company need to be filed as they happen, e.g., director, registered office, changes to share capital or person(s) with significant control).
You’re also responsible for the following monthly processes:
- Payroll
- Pensions
And the following quarterly accounting processes:
- VAT returns
Both payroll and pensions are very important. If you don’t file or complete all the necessary steps, your employees won’t get paid, or at least won’t get paid correctly. This will only add to your stress levels, and your employees as this can damage trust, and they won’t want to continue completing unpaid work.
You will need to deduct and pay statutory payroll liabilities (PAYE, NIC, Student Loan) to HMRC on behalf of your employees each month. You will also need to pay pension deductions to your designated pensions provider.
VAT returns are either required to be file quarterly or monthly (annual returns exist but are not advised). Filings and payments are due to HMRC 1 month and 7 days after the end of your VAT period.
2. Know your numbers and financial KPIS
Please get to know your company’s numbers! Don’t bury your head in the sand and assume that you have X amount left in the bank at the end of each month. Keep track and know what your bank balance, turnover and outgoings are.
We promise you that this makes tackling your company’s accounts so much easier.
It’s even better if you know what your finances will look like next month, so you can plan ahead and be better prepared for what’s to come.
We’ve recently written a blog that highlights 6 financial KPIs business owners need to be aware of, why they’re important and how you can track them.
3. Stay organised and dedicate time to your accounting
If you’re a business owner who’s also completing company accounts, chances are you’re a very busy person with many responsibilities and a tight schedule.
It can be beneficial to set aside dedicated time each month to review your company’s accounts. If you try to keep up to date and on top of everything on an ad hoc basis, it can leave you feeling very overwhelmed.
We’d suggest you dedicate a full day or morning to completing accounting-related activities to make it easier to digest.
4. Use digital tools and software
Gone are the days of relentless paper trails and hoarding receipts, there’s technology out there which will do it all for you!
Our go to is Xero and we’ve written a few articles on its functionality and most recently, Xero’s most useful add-on apps.
It’s a good idea to consider what you need help with and what you’d prefer not to. Once you’ve highlighted what these things are, for example, paying your employees on time each month or keeping a record of employee expenses, do your research and find suitable solutions.
You’ll probably be surprised to learn that there’s already a solution out there waiting for you in the form of hardware, software, or an app.
5. Don’t do it alone, seek legal and HR support and advice
Don’t be afraid to seek legal and human resources advice to ensure that you’re ticking all the boxes. Outsourcing support functions that you are not an expert in is always a smart move.
HR advice is crucial when you’re employing staff as employment law is very complicated and can be a legal minefield. No one wants to end up in a tribunal.
Legal advice can be helpful for your company accounts such as contracts and agreements with customers. The more advice and help you have, the easier it’ll be to complete processes, meet deadlines and staff your workplace efficiently.
6. Consider hiring a qualified accountant
Being able to step back from your accounting and hand it to someone else to look after means you’re able to reinvest your time back into other responsibilities. It can also help you feel less stressed as you’ll have less plates to spin.
Whilst it’s tempting to go for the cheapest option, it doesn’t always mean it’s the best. Pay cheap, pay twice is my motto!
If you’re going to hire an accountant, ensure they’re registered with a regulated professional body such as the ICAEW. As part of a regulated professional body, they will be bound to a strict code of ethics, which is very important as you don’t want an unregulated firm or individual handling your finances.
There are several different professional bodies and regulators out there so be sure to read up on them during your search for an accountant.
Anyone can call themselves an accountant, but not everyone can call themselves a chartered accountant!
Want to take the stress out of your limited company accounts?
As always, we’re on hand to help and if you’re not sure where to start or your accounts are leaving you feeling stressed, drop us an email and we’ll try our best to help you figure it out.
