Polson Higgs
What Your Accountant Would Like From You To Do Your Accounts
The end of another financial year is rapidly approaching.
Many find the end of year exercise daunting and put it in the too-hard basket.
To make the end of year exercise a little more meaningful it might be good for you to have an understanding of what we are trying to achieve when we ask for your information (and complete various questions and checklists).
Our ultimate aim is to be able to process your information as efficiently as possible. This is best achieved when we have all of the information that we require up front. When there are gaps in the information and we need to come back to you for more, inefficiency creeps in.
Broadly there are three aspects of the financial statements. The first being the trading information, the second being the Balance Sheet (or Statement of Financial Position). The third aspect is to determine what income and expenditure is related to personal rather than business activities.
If we can get an understanding as to where transactions fall, they can only be one of the three, then it makes the preparation of the accounts smoother.
Trading activity will generally be provided with accounting software, cashbook or bank analysis.
Balance Sheet movements are important. The most common areas to consider are what the stock level at balance date is, who owes you money for goods or services at balance date (receivables) and what suppliers you owe money to at balance date (payables). Have any fixed assets been sold or purchased? Has there been a change in your borrowings? There are other aspects here but if you can provide details of these 90% of the Balance Sheet information should be addressed.
With regard to private expenditure and receipts, if these are clearly identified other items will be income and expenditure (other than capital) and will be trading related.
The gathering of your annual information does not need to be stressful. If you are mindful of trading, the Balance Sheet and private transactions and understand which category each amount falls into, you are well on the way to providing the information required.
Last updated: 20th March, 2009 | 3:39 pm
