Accounting Reviews

Due to changes in the 2006 Companies Act, there have been some amends to the requirements of Groups preparing company accounts for their subsidiary companies. Following is a brief breakdown of the changes and what they could mean for your company.

Following changes to company law, medium sized groups will now be required to prepare group accounts to be filed at Companies House – Small and medium sized groups were exempt from this previously.

If your company is the parent company of a mid sized group of companies, then you must prepare accounts that combine both your own financial performance and position AND the subsidiary companies.

Such accounts are known as “group accounts”.

Group accounts can be fairly complex depending on the size of the parent group and the number of companies within it.

How do I know if my company is affected?

The 2006 Companies Act had a phased implementation – with the exemption for mid sized group accounts being removed for accounting periods beginning on or after 6 April 2008.

This means that companies with a year end of 30 April 2009 were the first to be affected.

However, if your company has an unusual year end (or prepares accounts for less than one year) your company may have been affected slightly sooner.

For a group of companies to be qualified as medium sized (not small) two of the following three thresholds need to be exceeded for two consecutive years:-

Turnover – 6.5m net (7.8m gross)
Gross Assets – 3.26m net (3.9m gross)
Employees – 50

How do I know if my company is part of a group?

A group of companies is when one company has a controlling interest in one or more other companies – ordinarily the “parent” company will own more than 50% of the ordinary share capital of the “subsidiary” company.

Are there any exemptions?

Yes. Small groups of companies will remain exempt as they always have been from filing group accounts with companies house.

Parent companies which are also a subsidiary company are likely to be exempt. Provided that they form part of a larger group of companies for which group accounts are prepared.

Parent companies whose subsidiary interests can be considered immaterial are also exempt.

If you have any questions about the changes to preparing group accounts and how they will effect your company, contact your chartered accountants firm.

Whether you choose to run your business accounting via online
accounting options or through an in-house accounting software package
depends on various factors. We discuss the pros and cons of online
accounting services to help you make an informed decision.

Ease of access

What’s good:
Online accounting services are accessible at any time, from anywhere,
through an internet connection. To access this accounting solution,
there is no need for a VPN.

However: Anytime, anywhere
access does carry potential risk such as the security of the Wi-Fi
connections that are used. Another consideration is that your employees
need to protect their screen views from onlookers if they are in a
public place.

The security factor

What’s good:
If you are the owner of a small company, an online bookkeeping service
may provide you with better security options than you would be able to
provide yourself with an in-house software solution.

However:
The level of security you need for your company is dependent on the
online service that you choose. To lock down access, however, larger
financial institutions prefer to keep their accounting interactions
within their own network.

The compatibility factor

What’s good: Many online accounting solutions are compatible across all platforms.

However:
In order to be able to use the service, you need to have internet
access, whereas if you have your bookkeeping software in-house, you will
be able to sync any time that you are on your computer.

The usage of resources

What’s good:
Online accounting service providers are responsible for keeping your
services running and they have to provide IT backup support.

However:
In order to be able to run online bookkeeping services, you need
adequate bandwidth and if your business is located in remote areas
without proper internet access, this could pose some challenges.

Employee productivity

What’s good:
Businesses have reported increased employee productivity with the use
of online services as any bookkeeping task can be undertaken remotely
without having to be at the office.

However: A reliable
internet connection is necessary. If this is not always possible it may
greatly hinder employee productivity and affect deadlines.

Backup options

What’s good: Internet based accounting service providers are responsible for data backup which is convenient.

However:
You need to depend on the provider to keep your sensitive information
safe and secure which may not be the right solution for every business.

What about up-front costs?

What’s good:
In most cases, the initial cost for online accounting solutions is
lower than if you were to purchase in-house bookkeeping software.

However: Online services may cost a little more in the long run as they often require you to commit to a long-term contract.

While many businesses today are choosing online accounting solutions,
it is important to consider accessibility, security, initial and
maintenance costs. In order to choose the best solution for your
business it is advisable to weigh up all the pros and cons carefully.

There are two kinds of people who will find themselves up against bookkeeping; those utilized as in-house ledgers within large businesses, or those bookkeeping for their own reasons. There are a few sensible and basic routines which can be beneficial for bookkeepers in Ramsey Minnesota when it comes time to prepare regular management accounts for the owners of companies, or even for your own records. The goal of these routines is in aiding the completion of the year end accounts, plus they can ensure the company continues to operate smoothly.

The main goal of a accountant within a corporation is to ensure the exact and flawless operation of a company, and this pertains firstly to the paperwork despatched and received by the company. The majority of transactions should be entered into the ledgers immediately to ensure the accuracy; plus it eliminates later discrepancies or miscalculations. Just as it’s crucial to be timely, it’s also vital that you back up any information lest a system crashes or the information is somehow lost later on.on.

One of the most important things to consider with independent bookkeeping is just that-do it! It’s easy to procrastinate, nevertheless the longer you wait to tackle the books, the greater your chances are to inflict errors or misprints. Mistakes in bookkeeping take three times as long to fix as doing it right initially, so schedule some time, make it a regular routine, and you’ll avoid future frustrations. If, however, you would rather spend time earning money versus documenting it, it may be to your advantage to hire a bookkeeper. Most charge by the minute, so unless you possess the extra cash it may be worth it to look into do-it-yourself bookkeeping. If however the money you earn outweighs the expense of a professional accountant it may be well worth the peace of mind. It completely depends how you’d prefer to use your funds.

A couple of methods that should be observed when bookkeeping include, but are not limited to, the documenting of any receipts and payments that have not cleared the bank statements following the completion of a reporting period. It’s worthwhile to double check that all business expenditure comes from the business funds, and not your individual funds. The objective in monitoring your hard earned money is to earn more, not lose it. Outstanding amounts owed at the end of a period should also be recorded, and although you may have a generated list it’s worth it to double check its accuracy.

Likewise, all payments owed to outstanding suppliers should be recorded, and any recurring expenditure ought to be accurate. Double check company credit cards and any receipts for small amounts must be filed and if possible, utilized in lowering your tax bill. Little steps like these can seem tedious and more work than necessary, but if you’re going to try bookkeeping it’s worth it to remember that the more meticulous the better. You will reap the rewards and prevent the frustrations down the road.

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So you may be thinking about studying to be a CPA. The CPA exam will not be a simple examination to take, as we probably already know. It requires considerable time and effort to be spent to get the best results and achieve a pass in the CPA Exam. Having said that, you are going to reap the rewards when you are ultimately minted as a CPA.

1. The career paths for CPAs are varied. It is not all about accounting for big corporations. There are a number of different CPA career paths, including Forensic and Information Technology (IT). As the criminal activity becomes more regularly occurring and given the growing variety of company related investigations, Forensic Accountants are currently in much more demand. Certified Public Accountants are able to work for either a big global CPA firm or maybe a modest local accounting practice. Teaching accountancy can also be yet another career path you can think about

2. Your colleagues will have more respect for you after you achieve your CPA License. You can demonstrate that you truly have the ambition, drive and perseverance to progress your career. Employers will see that you are committed to your career and may see you as a hardworking and dedicated individual. You own self esteem should grow as well – envision those feelings of reaching your main goal and becoming a CPA.

3. Accountants with a CPA License are in great demand. According to Reuters there is a shortage of experienced CPAs. Because of the recent corporate scandals the amount of jobs that require a CPA title has increased considerably. As public corporations have to meet stringent accounting guidelines as a result of the 2002 Sarbanes-Oxley act there exists an increased need for accounting professionals.

4. A CPAs salary is more in comparison to a regular accountants?. Recent research verify that a CPA could make 10% more salary, on average, compared to regular accountants. Without a doubt, more experience will bring a greater salary. Improving your credentials by becoming a CPA will bring you the rewards of a higher salary.

Add in the option to be ready to retire in fifteen years and you will see that deciding to become a CPA could be the best decision you ever made.