Bookkeeping Archives - Page 2 of 2

Accountants, Accountants for Contractors, Accounting, Accounting Issues, accounting software, Bookkeeping

What is Fair Value Accounting? Definition, Method and Difficulties

George / 14/12/2023

Let’s dive into our discussion about what is fair value accounting. It’s an accounting approach that’s gaining traction in the UK and globally. Fair value accounting involves valuing assets and liabilities based on their current market prices, providing a more accurate reflection of their true worth. This method enhances transparency and relevance in financial reporting, as it captures the dynamic nature of the market. Fair value accounting is particularly useful for financial instruments and investment properties. However, it’s important to note that fair value measurements can be subjective and require careful judgment. Regulators and standard-setting bodies are continuously working to provide guidance and ensure consistency in fair value measurements. Now that we have the introduction covered, let’s get started with the blog. Reach out to our intelligent and clever-minded guys to get the answer to your queries in the UK, we will get to your answers quickly. We will help to decide how to deal with your tax implications. What is Fair Value Accounting? This approach is particularly relevant for assets that are traded in active markets, such as stocks or bonds. Fair value accounting takes into consideration factors like supply and demand, market conditions, and other relevant information to determine the fair value of an asset or liability. It provides transparency and helps investors and stakeholders make informed decisions. However, it’s worth noting that fair value accounting can be subjective and may require professional judgment. Companies need to have robust valuation processes and adhere to accounting standards to ensure consistency and accuracy. Fair Value Accounting Method – How to Value the Assets? When it comes to valuing assets using the fair value accounting method in the UK, there are a few key considerations. For financial instruments like stocks or bonds, fair value can be determined by looking at their market prices. It’s important to note that fair value accounting requires companies to regularly reassess the value of their assets and liabilities, taking into account any changes in market conditions. This ensures that the financial statements provide an accurate representation of the company’s financial position. By using the fair value accounting method, companies in the UK can provide transparency and relevant information to investors and stakeholders. When Does Fair Value Accounting Apply? Fair value accounting applies in various situations in the UK. Additionally, fair value accounting is applied when measuring the value of investment properties, biological assets, and certain intangible assets like patents or trademarks. It is also used when assessing the fair value of liabilities, such as contingent liabilities or financial liabilities that are held for trading. What is Fair Value Accounting vs. Historical Cost Accounting? A difference is the level of objectivity involved in determining values. Fair value accounting requires judgment and estimation, as it relies on market conditions and other factors. This subjectivity can lead to differences in opinion among accountants and auditors. Historical cost accounting, on the other hand, is based on actual past transactions and is generally considered more objective. Comparability is also affected by the choice of accounting method. Fair value accounting provides a standardised approach to valuing assets and liabilities, which enhances comparability between companies. Historical cost accounting, on the other hand, may result in different values for similar assets and liabilities, as they are recorded at different points in time. Both fair value accounting and historical cost accounting have their advantages and disadvantages, and the choice between the two depends on various factors, including the nature of the assets and liabilities, the industry, and the specific reporting requirements. What are the Benefits? Fair value accounting offers several benefits in financial reporting. One major advantage is that it provides more relevant and up-to-date information about the value of assets and liabilities. By valuing them at their current market prices, fair value accounting reflects the economic reality of a company’s financial position. This can help investors, creditors, and other stakeholders make more informed decisions. Fair value accounting also enhances transparency by disclosing the underlying assumptions and inputs used in determining fair values. This allows users of financial statements to better understand the basis for the reported values. Additionally, fair value accounting can improve comparability between companies, as it provides a standardised approach to valuing assets and liabilities. This consistency allows for better benchmarking and analysis across industries and markets. Fair value accounting can also capture changes in value more accurately, especially for assets that are subject to frequent market fluctuations, such as investments or derivatives. This helps prevent potential distortions in financial statements caused by outdated historical cost measurements. Overall, fair value accounting promotes transparency, relevance, and comparability in financial reporting. What are the Difficulties? Since fair value relies on market conditions and estimates, there can be differences in opinion among accountants and auditors. Another disadvantage is the increased complexity and cost associated with fair value measurements. Valuing assets and liabilities at fair value requires expertise and resources, such as hiring independent appraisers or using complex valuation models. Changes in fair value can impact reported earnings and financial ratios, which may make it challenging for investors and stakeholders to assess a company’s performance and financial health. It’s important for companies to carefully consider the pros and cons and ensure proper implementation and disclosure to provide meaningful financial information. What is the Possible Growth of Fair Value Accounting in Future? As the global economy becomes more interconnected and complex, fair value accounting is gaining traction as a more relevant and transparent method of valuing assets and liabilities. The Financial Reporting Council (FRC) in the UK has been actively promoting the use of fair value accounting to enhance the quality and transparency of financial reporting. This alignment with international standards further supports the future of fair value accounting in the UK. Moreover, advancements in technology and data analytics are making it easier to gather and analyse market data, which is crucial for fair value measurements. The subjectivity involved in fair value measurements can lead to differences in opinion

Accountants, Accounting Issues, Bookkeeping

What is Adjusted Net Income?

George / 21/06/2023

In simple words, we can call the adjusted net income the total taxable income. The money you are earning from freelancing along with rental income and salary is included in the list of net adjusted income. On the other hand, charities, donations, pension contributions, and losses and reliefs from the yester years are not considered to be part of this list. This might confuse several cases but the amount of your personal allowance is considered to be included. Which is known to be the first part of income that is tax-free. This is an amount of £12,570. Further in the discussion, this comprehensive guide will be based on frequently asked questions like how adjusted income works in the UK, what should be taken care of in this case, what happens to your child’s benefits, and what amount goes over a certain limit. Let us get further delved into the discussion to know more facts about how net adjusted income will work for you. Our team of professional members loves to hear out your problems and find out the possible and suitable solutions quickly for small businesses’ accounting problems. Call us or email us today. How Does Adjusted Net Income Work in the UK? It is calculated by taking your total income and deducting any allowable expenses and certain tax reliefs, such as pension contributions and charitable donations. This kind of income is used to determine whether you are eligible for certain tax credits and benefits, such as child tax credit, and whether you will receive the full amount or a reduced amount. It can also affect your personal allowance, which is the amount of income you can earn before you start paying income tax. If your net adjusted income exceeds certain thresholds, your personal allowance may be reduced or eliminated altogether. It’s important to keep track of your adjusted net income to make sure that you are able to avoid any unexpected tax bills. Why Should I Care About My Adjusted Net Income? Your adjusted net income is an important figure to be aware of in the UK because it can affect your eligibility for certain tax credits, benefits, and personal allowances. For example, if your net adjusted income exceeds £100,000, you will start to lose your personal allowance, which means you’ll pay more income tax. Moreover, if your adjusted net income is too high, you may not be eligible for certain tax credits or benefits, such as child tax credit or working tax credit. Therefore, it’s important to keep track of your net adjusted income to make sure you’re not missing out on any tax benefits or credits that you’re entitled to. What If the Amount is Over £100,000? If your adjusted net income in the UK exceeds £100,000, you will start to lose your personal allowance. For every £2 that your net adjusted income exceeds £100,000, your personal allowance will be reduced by £1. This means that if your income is over £125,000, you will not receive any personal allowance, and you’ll pay more income tax. However, it’s worth noting that this only applies to your personal allowance, and not to other tax credits or benefits that you may be eligible for. What If You’re a Who is Parent Claiming Child Benefits? If you’re a parent claiming child benefits in the UK, your adjusted net income can affect your eligibility for certain tax credits and benefits, such as child tax credit. If your net adjusted income exceeds £50,000, your child tax credit will be reduced by £1 for every £100 that your adjusted net income exceeds this threshold. If your net adjusted income is more than the figure £60,000, you will not be eligible for any child tax credit. However, it’s worth noting that these thresholds only apply to child tax credits, and not to other benefits or tax credits that you may be eligible for. What If You were Born Before the Year 1938? If you were born before the year 1938 in the UK, you may be eligible for a higher personal allowance than other taxpayers. This is known as the age-related allowance, and the amount you receive will depend on your date of birth. However, it’s worth noting that the age-related allowance is being phased out, and will be replaced by a higher basic personal allowance for all taxpayers. The age-related allowance was fully phased out earlier. The Bottom Line Now that you have gathered a fair amount of information about what is adjusted net income and how it works in the UK, we can bring the discussion towards wrapping up. To be eligible for the net adjusted income, there is a certain criterion which is to be met before you expect any benefit. So to check whether you are eligible or not, you will have to see the points mentioned and it will also depend on your specific circumstances. We hope this discussion will help you to develop a better understanding of net adjusted income and how will this help to get you the maximum benefits in the UK. Reach out to our intelligent and clever-minded guys to get the answer to your queries in the UK, we will get to your answers quickly. We will help to decide how to deal with your tax implications. Disclaimer: The information provided in this blog is about adjusted net income, including the text and graphics, in general. It does not intend to disregard any of the professional advice.

Accounting, accounting software, Bookkeeping

What is the Best Way to do Bookkeeping for Amazon Sellers?

George / 13/01/2023

When you are associated with accounting needs in Amazon selling, it does the work mostly for the purpose of fulfilment. However, the seller has to deal with the management of selling operations as well as the financial requirements of accounting in this. In the case when you are into Amazon selling, but you are not connected with the accounting management of your finances, you will be unable to realise the financial health. One of the prominent reasons why businesses fail is also because of poor cash flow and not keeping track of the finances in accounting. Here comes the requirement of bookkeeping for Amazon sellers. You will have to ensure that you are on top of handling your accounting requirements. This requirement of accounting does not seem to be a complicated process and especially for small businesses or new setups. The needs of bookkeeping might sound daunting to beginners. However, once you learn the professional way to do it, you will find it easy and handy. This is why bookkeeping is important for all Amazon sellers. Talk to our best accountants and bookkeepers for Amazon Business in Croydon at CruseBurke. You will get instant help with bookkeeping for Amazon sellers, whether you are running a small or large business. Bookkeeping for Amazon Sellers In simple words, we can say that bookkeeping for the sellers of Amazon refers to making records of the day-to-day activities of a merchant. This majorly includes the activity of financial transactions. Now the common factors that are associated with financial transactions in Amazon selling are sending money on advertisements, loan payments, the amount of money that is paid to the suppliers, and the cost of shipping, purchases, and sales. There are several factors due to which bookkeeping is an essential part of Amazon’s selling process. What is the Important Fact About Bookkeeping for Amazon Sellers? The importance of bookkeeping can be witnessed by Amazon sellers through multiple factors. Having a conscious track of the financial activities is top on the list in this regard. Everyone among the owners is keenly interested in knowing the facts about what is the amount of revenue that is generated after the sales and what is the amount of earned profit. Here are a few important reasons for this regard: There are high chances of accidental mistakes due to which you can lose a lot of your money without even knowing. These expensive mistakes can be avoided by keeping a track of the accounts through bookkeeping. When you are up for borrowing an amount of money, you will have to prove that you are a reliable risk to lend the money. Your financial statement made with the bookkeeping will help you in this regard. There are several events that will bring in the need for the amount related to the tax deductions, your record-keeping through books will save you in such a scenario. Bookkeeping is a track of the financial position of your health, which will further guide you to make the right decisions. What are the Key Benefits of Bookkeeping for Amazon Sellers? There are several key benefits of bookkeeping for Amazon sellers. There are multiple examples of sellers who are not even fully aware of the key benefits of bookkeeping in their selling business. Let us consider a scenario where you are required to make a loan application for your business, the creditor will require a lot of financial information. This can be easily taken from the record of bookkeeping. For a fine record, you must ensure that your books are recorded with accurate details and are updated on a regular basis as well. This does not sound like much if your records are maintained and you keep a track of them. If you have maintained your books successfully, this should not be a problem for you. If the records are not maintained, this experience can be quite a nightmare for you and your business. What is the Procedure of Bookkeeping for Amazon’s Selling Business? When it comes to the Amazon selling business, there are two ways to do the bookkeeping. Some of the sellers are up for handling the accounts on their own while others opt for hiring an expert to maintain the books for their financial details on a daily basis. Hiring a professional for the bookkeeping purpose is more popular among people, and it is not a very costly procedure as well. Hiring a professional for this cause means that your workload will be decreased and you will be stress-free to focus on your business growth and valuation more. You will not worry about missing the deadlines and making errors in the records. When you outsource the bookkeeping services, you will have time to enjoy multiple aspects of working on your business. This includes aspects like marketing and the development of your product. You are often surprised by the low-cost packages of hiring bookkeeping professionals and how handy and affordable are these bookkeeping services are to be availed virtually. The Bottom Line Now that you have gathered a fair amount of information about bookkeeping for amazon sellers, we can bring the discussion towards wrapping up. The benefits and key factors of bookkeeping are essential for smooth selling on Amazon and this can really help you with other factors of your business. You can easily find a professional to hire for bookkeeping services for your business. This will allow you to enjoy focusing on your product development as well as marketing them for business growth. Are you seeking professional help to know bookkeeping for amazon sellers for a small business? Why not get help from the experts at the CruseBurke? Talk to us now and we will get back to you instantly. Disclaimer: All the information provided in this article on bookkeeping for amazon sellers includes all the texts and graphics. It does not intend to disregard any of the professional advice.

Accountants, Accounting, Accounting Issues, Bookkeeping

What are the Tips to Get Your Books Ready for End of Year?

George / 05/01/2023

It becomes critical and hectic especially for the finances team when the tax year is coming towards an end. It is a tendency among businesses that the finance professionals get their owners burry under the heps of accounting requirements, financial reports, and other relevant statements. It takes around a month time period for the accounting professionals to be prepared for the year closure. This usually makes the accountants overwhelmed with the work requirements. The year-end accounting checklist helps maintain focus on getting everything ready before the deadline approaches. Moreover, the best way to lessen the overwhelming burden and improve the productivity level in this busy period of the year is to make a set of workflow that can really help. This is also an easy method that will reduce your work stress as well. We have compiled this article to give you a good head start. We have focused on outlining the important steps that will make the year-end closing cycle a successful experience for you. Let us get delved into the discussion without missing any tips and ways to make this happen. Talk to one of our intelligent and clever professionals to get further queries about the year-end accounting checklist. We will ensure to come up with the best possible solution. A Short Introduction to the Year-End Close The year-end close is also famous with the name of closing the books. It is a procedure in which the professionals do a review, and verification of all the financial transactions, recompilation, and add up the ledgers of the company from the previous fiscal years. This has the involvement of equity, investments, assets, revenue, income, and other calculations of the business expenses. The goal of this annual closure is to make the financial statement finally, which will help for the potential audit externally. This will keep the official financial records of the company in a sorted and managed manner. Moreover, the founders of the company are allowed to choose the year-end date that goes according to their business suitability. The duration of the fiscal year must be of 12 months. This should be fitted best with the industry and the company’s requirements. Why is it so Difficult to do the Year-End Closing? It is challenging and overwhelming when it comes to the year-end closing. Often, professionals and accountants are found to seek help from others. So that their workload can be reduced. We have outlined some of the common problems that make it challenging for accountants throughout the financial year and at the year-end closing. This involves the following: The inefficient communication of the employees makes the process more difficult. The accountants are often found running after the employees for the sake of missing documents. The manual entry of the data is another challenge. This not only takes a lot of time, but the chances of errors are also high in this method. It is challenging to juggle the files of paper. Human errors are possible even if the professionals are organised to a good level. It just has to be a simple wrong entry and this can give you costly consequences. The missing invoices and receipts are another major issue. This can even cause some major delays in meeting deadlines. What are the Ways to Make the Year-End Closing a Little Easier? This is like a dream for professionals to seek ways that can make the year-end closing a little easier and less stressful. The good news is that there are certain ways to do so in reality. Being ahead in planning the year-end closing is one of the popular ways. When you are on top of handling your finances throughout the year, this will work as the most effective way to cut down the level of stress while you are closing the year-end finances and other requirements. You must ensure that laborious reconciliations is done already so that your accounting professionals can spare the time to focus on the business goals for the coming up year, setting the budget, making financial reports, and reviewing the ledgers. What is the Year-End Accounting Checklist? There are several steps recommended by professionals that are related to double-entry accounting well. This will even help to close the books and either requirement right on time. 1- You must be preparing your year-end closing schedule to be on top of your performance game. You must know the delaine of the fiscal year and other important dates of the business activities. You can even create a calendar to focus on important deadlines. 2- You must gather all the receipts and outstanding invoices. 3- You must record the entries that are adjusted. This should involve the reconciliation of all the cash accounts. 4- You should close all the payable and receivable accounts as well. 5- If you want to start your new fiscal year with the right financial position, you must focus on accrue accounts receivable. 6- Keep a track of the accrued accounts payable. 7- Adjust the entitlements and the grants wherever required for the business’s betterment. The Bottom Line Now that you have gathered a fair amount of information about the year-end accounting checklist, we can bring the discussion towards wrapping up. Getting your books ready and set for the upcoming new fiscal year means that you are in a good financial position with your business to make the right business choices and start your financial year. However, the professionals often state a few tips to be on top of this game. We hope these few minutes of reading will help you develop a better understanding of the year-end accounting checklist. As well as how to deal with them professionally in the future. If you seek professional help, learn more about the year-end accounting checklist. Why wander somewhere else when you have our young and clever team of professionals at CruseBurke? Disclaimer: The information provided in this blog is about the year-end accounting checklist, including the text and graphics, in general. It does not

Accounting, Bookkeeping, Dividend Allowance

Tax Consequences of ‘Illegal’ Dividends

George / 04/10/2022

When we are associated with the business world, we all know that the undistributed profits of a business can help to declare dividends. It is required to follow the accurate procedures well in order to make all the relevant payments legal. If there is a scenario where a director tends to sanction illegal dividends, the concerned individual and the director both will be associated with a significant tax. This will be applicable if the director was not aware of the non-validity in this process. Tax treatment of dividends is important to understand here, this will allow you to know that the credits in a company’s account do not specify that the earned profits are enough for the business. Moreover, when it comes to the declaration of dividends for a company, the calculations must belong to retained profits. Reach out to one of our professionals to get to know what is the best way to handle tax treatment of dividends for your business in the UK. Tax Treatment of Dividends vs Salary People often wonder about the directors and their salaries. The director of a company that is carrying out a business owned by another individual, the role of the director becomes a shareholder as well. There is always a beneficial factor involved when there is a split observed in the salary and dividends and the benefits are mostly related to the tax affairs. Such an arrangement achieves the following beneficial factors: There is no factor of attraction involved in the dividends for the national insurance contributions. The tax charges will be low because the rate of tax is lower on dividends as compared to the PAYE income. There is a separate allowance for dividends that is tax-free. Moreover, these benefits allow you to become more and more tax efficient. This is why the directors tend to take a tax-free amount of the salary and the rest of it goes to them in form of dividends. When is the Right Time to Pay the Dividends? By now you must be wondering about the dividend payments and when is the most suitable time to pay. See the following listed factors to define when is the right time to pay the dividends. There should not be any duplication in the payment. This means that you have not paid any dividends already in any form. This is also applicable when your company profits exceed the limit of business losses in the same period. What are the Consequences of Illegal Dividends? There are common problems that come across the way of directors that result in the form of illegal dividends. They include the followings: When you do not pay the same amount of money to all the shareholders who belong to the same class. When you fail to make a declaration of the dividends through accurate paperwork. When you fail to ensure that adequate reserves are there to support the payments of dividends. When you are not able to assess the solvency of the company. If your accounts are not prepared enough to play a supporting role for interim dividends. If you are not aware or self-assured about the declaration of your dividends, it is wise to reach out to an expert for help and suggestions. This will allow you to realise whether you can pay the dividend and how will it help you with the relevant paperwork. If you are not well aware of the dividend process, you will fall into illegal dividends and lack of knowledge will not be a justified reason for that. The Bottom Line Now that you have gathered a fair amount of information about the tax treatment of dividends for your business, we can say that illegal dividends can make you suffer serious consequences, so it is better to realise how imperative it is to be well aware of the dividend process. We hope these few minutes of reading will help you to develop a better understanding of the tax treatment of dividends and you will be able to handle the dividend process efficiently. Get in touch with our young, clever and tech-driven professionals if you want to choose the best guide for the tax treatment of dividends for your business in the UK for your business. Disclaimer: The information about the tax treatment of dividends for your business in the UK provided in this blog includes text and graphics of general nature. It does not intend to disregard any of the professional advice.

Accounting, accounting software, Bookkeeping

Sage Vs Quickbooks – Which is Better Accounting Software?

George / 27/07/2022

Every business owner wants to stay in control of their finances and make decisions that lead to long-term success. One of the most important choices is selecting the right accounting software to manage your income, expenses, payroll, and tax compliance. With so many options available, choosing between Sage and QuickBooks can be a challenge. Both are highly rated, but they serve different types of businesses and offer distinct features. If you’re unsure which is right for your business in 2025, this updated guide will help you compare Sage vs QuickBooks and choose the most suitable option based on your needs, budget, and growth goals. Reach out to one of our professionals for personalised guidance on selecting the right accounting software. Call us or drop us a message — we’re happy to help! Sage – Overview Sage is a well-established accounting solution, popular in the UK for its reliability and industry-specific features. There are two main versions: Sage Business Cloud Accounting – Designed for small to medium businesses Sage 50cloud – A desktop-based software with advanced tools Key features of Sage (2025): Advanced inventory management Payroll integration (paid add-on) Cash flow tracking Project/job costing Banking and reconciliation support VAT submissions compliant with Making Tax Digital (MTD) Sage is especially popular in industries like construction, retail, and manufacturing due to its detailed reporting and compliance capabilities. QuickBooks – Overview QuickBooks Online is a cloud-based accounting solution developed by Intuit. Known for its intuitive interface and automation, it’s widely used by freelancers, sole traders, and small to medium-sized businesses. Key features of QuickBooks (2025): Cloud-based access from any device Real-time collaboration and multi-user access Automated data entry and bank reconciliation Invoicing and expense tracking Built-in mileage tracking Customised financial reporting Optional payroll integration (paid module) QuickBooks is ideal for businesses that want simplicity, remote access, and strong automation. Sage vs QuickBooks – Feature Comparison Let’s look at how Sage and QuickBooks compare in key areas: 1. Integration and Apps QuickBooks offers hundreds of third-party integrations, including tools for e-commerce, inventory, CRM, time tracking, and more. Sage has expanded its integration options but still offers fewer app connections compared to QuickBooks, especially in the cloud version. 2. Payroll Both Sage and QuickBooks offer paid payroll modules. QuickBooks Payroll is available as an add-on, offering auto-enrolment pensions, RTI submissions, and direct deposit. Sage Payroll is also robust, with features tailored for UK regulations, but generally better suited for businesses with in-house payroll expertise. 3. Inventory Management Sage offers advanced inventory tracking, including product categories, cost of sales tracking, and reorder levels. QuickBooks offers inventory tracking in Plus and Advanced plans, suitable for basic to moderate inventory needs. 4. Financial Reporting QuickBooks makes it easy to generate reports like profit & loss, balance sheets, cash flow, and comparisons between periods. Sage also offers strong reporting but is less intuitive and may require training to get the most out of it. 5. Ease of Setup and Use QuickBooks is known for its easy setup, even for beginners. Data can be imported from spreadsheets and other software quickly. Sage, especially Sage 50cloud, may require some technical knowledge or training, particularly during setup. Which One Should You Choose in 2025? Feature Best Choice Ease of Use QuickBooks Mobile Access QuickBooks Payroll (UK Compliance) Both (tie) Advanced Inventory Sage Customisation QuickBooks Integration with Third-Party Apps QuickBooks Industry-Specific Features Sage If you’re a small business, freelancer, or startup looking for simplicity, automation, and cost-effectiveness, QuickBooks is a strong choice. If you’re a growing or established business in sectors like construction, manufacturing, or retail, and need detailed inventory and project-based costing, Sage may be a better fit. The Bottom Line Both Sage and QuickBooks are powerful accounting platforms with their own strengths. Your choice depends on the size of your business, your accounting knowledge, and the level of features you need. QuickBooks leads in usability, cloud access, and flexibility. Sage stands out for depth in inventory management, job costing, and industry compliance. Speak to our tech-savvy and friendly accountants to help you choose the best accounting software for your business needs. We offer tailored advice and set-up support for both QuickBooks and Sage. Disclaimer: This article offers general information about Sage and QuickBooks features as of 2025. For tailored advice, consult a qualified accounting professional.

Bookkeeping, Business, Business Growth Ideas

Learn Smart Ways to Manage Overdue Invoices!

George / 01/07/2022

To keep your business growing and thriving, it is important to ensure the invoices are cleared on time and keep the focus on the cash flow. However, we all know that the situation can not be ideal all the time. There are multiple reasons why the invoices go through the unpaid period for a very long time. Manage overdue invoices is an essential task to survive in the business. This has been quite challenging for businesses, especially in the time of covid-19, several companies struggled with the challenge of overdue invoices. In this blog, we have covered a basic understanding of managing overdue invoices and focused on the important features to ensure the invoices are paid on time. This brings our attention to focus on the terms and conditions of payments, ensuring that the invoices are sent to the right clients, active follow-up of the overdue invoices, and time management. Are you stuck with overdue invoices and seek professional help to learn to manage this process? Get in touch with one of our experts at CruseBurke to get the instant solution to your problems. How to Manage Overdue Invoices The key point here is to focus on bookkeeping which will make a difference in getting the overdue invoices as early as possible. Everyday bookkeeping involves the following duties: Bank Reconciliation Supplier Payment Recording customers Posting Bank Payments Accounting for cash expenses Posting the purchase invoices Sending the sales invoices to the clients Furthermore, we have explained the most common and smart ways that will help you to manage your overdue invoices. Payment Terms and Conditions The payment terms and conditions are important to set up before you plan to make the selling of your products and services. It is suggested to communicate the payment terms to your customers and then raise or issue the invoices to avoid overdue payments. The professionals often suggest communicating with their clients in the following ways: Before agreeing on the contract of payment, check the details of the company that they are dealing with. Search for the status of company directors from the companies house. Ensure that the directors were not associated with the companies that are now dissolved. Moreover, the talk about setting up the terms and conditions for the payment, generally requires that the invoices must be cleared within a month. The late payments make you suffer penalties and fines according to UK law. Debt recovery costs can also be part of penalties, however, this should already be a part of the terms of payment to discuss with clients. Time Management in Sending Invoices After you are done selling your products and services, you must focus on sending the invoice timely. This will bring the payments on time because the purchase of products is fresh in the customer’s mind. The experts suggest sending the invoices immediately and not after days when the memory of a new purchase fades away from the mind of customers. If they still do not pay, you should keep the follow-up vigilantly and send them reminders. The accounting software can be a great help with invoicing payments here. Also, focus on adding the required details like your bank details so that the client does not have to look for this basic information and sends the money quickly. Vigilant Follow up of Overdue Invoices In case the due date of payment has passed and the customer has not cleared the payment, do not feel reluctant to give reminders about the payment by quickly getting in touch with them. The quick and vigilant you will do the follow-up, the sooner you will receive the payments. A polite reminder is all that you need to do immediately to achieve the payments promptly. Open Communication In case of delayed payments, polite reminders are a professional way to get the payments cleared swiftly. However, if you bring the threatening factor involved in your reminders which can be about the fine charged or other penalties, this will not cement your relationship with customers. This is not a very good idea to follow. You should keep the communication channels open for them. The best suggestion is to send a quick and friendly reminder through email or a phone call. Ensure to Send the Invoices to the Right Client There is confusion about having a specific contact in your company and sending them the invoice without realising that he is not the right person who deals with invoices. This makes the payments deal as well. You need to have your search about who is the right person to send the invoices to and contact them for the follow-up as well. This will get the payments cleared on time as well. In case you rely on your specific contact to forward the invoices to you, you know they will not take it as a responsibility. We all know how forgetful we can become in the rush of work. Always follow the idea of making the payment process as easier as possible for your clients and this will get you to swift payments. Reach out to our guys for a quick call if you seek instant help with your overdue invoices. We will love to hear you out and find suitable solutions. The Bottom Line Now that you have gathered a fair amount of information about managing overdue invoices, we can bring the discussion towards wrapping up. Finally, we can sum up by saying that handling overdue invoices is a tricky process. However, if you tend to follow the smart ways to deal with the client like sending immediate humble reminders or making the payment process easier for them can help to get payments on time. We hope these few minutes of reading will help you to manage your overdue invoices more efficiently. Disclaimer: The information about managing overdue invoices provided in this blog including text and graphics is general in nature. It does not intend to disregard

Accounting, Bookkeeping, Finance

What is Debit and Credit and It’s Difference?

George / 27/06/2022

Many people beginning their finance education get confused about the difference between debits and credits. Even laymen become perplexed over the question of what is debit and credit most of the time. On the other hand, this confusion might cost you many pounds if used incorrectly and entered the values in the wrong accounts. So, financial managers, accountants and bookkeepers take special care to produce and maintain accurate financial records. If you are also one of those people mixing up these two terms, then this guide is right for you. In this article, we will inform you about the debits and credits separately and then highlight the difference between these two terms. Moreover, we will discuss the use if debits and credits in bookkeeping and accounts records and how to use them. So, let’s start with our basic understanding of debits and credits. Let’s seek help from the expert and experienced chartered accountants at CruseBurke and manage your bookkeeping and balance sheets accurately. Contact us now! Double Accounting Procedure in Accounting Mostly, the confusion between debit and credit arises due to the double-entry procedure in the bookkeeping and balance sheets. To ensure accuracy and avoid any discrepancies, the accountants enter a value into accounts at the same time. One value is added as the debit and another one as the credit simultaneously. When an entry is added to to the debit accounts, it is subtracted simultaneously from the credit account. Vice versa, any value added to the credit accounts is subtracted from the debit account. This is the reason most people get confused about these terms. The following types of accounts are used for maintaining the records of a firm: Asset Accounts Expense Accounts Liability Accounts Equity Accounts Revenue A value increased in one account is automatically deducted from another account. For this, accuracy needs to be ensured to avoid any differences in the records. What is Debit in Bookkeeping? A debit is a value coming inside your accounts, ultimately increasing the value of your assets. On the other hand, the debits reduce the liabilities of an organisation. In other words, all the money or cash coming into the account of a company is known as the debit and it is added as a debit entry to a balance sheet. For example, it is added to the assets or expense accounts. At the same time, it is subtracted from the equity or revenue accounts lowering the liabilities of a company. The debit is the money earned by the company. For example, a company has received the payments from the clients and it will be a part of the debit accounts. The following types of accounts increase the value of debit accounts: Dividends (Draws) Expenses Assets Losses You can remember them as DEAL, as it will make it easier for you to add values as a debit to these accounts. The debit entries are made using the abbreviation of the dr. in the records. What is Credit in Bookkeeping? Credit is the opposite of a debit in finance. It is a value or money going out of the accounts of a company. It means to say the credit in bookkeeping reduces the assets and increases the liabilities. The credits are a crucial part of a balance sheet, and they represent the liabilities of a company. These are the payments a company has yet to make in future as the company has purchased some raw material or obtained a loan from a bank. Gains Income Revenues Liabilities Stockholders’ (Owners’) Equity Remembering as GIRLS would make the entry process convenient and error-free for you. The credits are entered with the abbreviation of Cr. in the sheets. What is the difference between Debits and Credits? Both the debits and credits are the transactions added to the accounts of a company. Every transaction has two sides. One is the transaction in which a company pays out of its accounts, reducing the money in that account. This is known as the Credit. On the other hand, a company achieves or earns money from the sale of products or services or by getting loans. This part of the transaction increases the money in the accounts of a firm. This increase in money is added as a debit to the company’s balance sheet. Accounts Debit Credit Asset Account Increases Decreases Expense Account Increases Decreases Liability Account Decreases Increases Equity Account Decreases Increases Revenue Decreases Increases Entry Recorded on the left Recorded on the right All the entries counted as an asset, cash or loan are added as debits. When a loan is paid back, it is credited. Similarly, when a company needs cash, it sells some of its assets. These assets will be credited and the cash received will be added as the debit. The Final Thoughts In conclusion, debit and credit are the two sides of the same coin. The debit is a value increasing the total assets or cash of a company. On the contrary, the credits are the values reducing the assets and cash of a company. So, it is very important to learn what is debit and credit and what is the difference between them. Moreover, you need to take care of how to increase and decrease the debit and credit in different types of accounts. Are you wondering about the difference between debit and credit? Feel free to ask us any questions and get consultation services at CruseBurke by calling us at 02086868876. Disclaimer: All the information provided in this article on what is the difference between debit and credit including texts and graphics is general in nature. It does not intend to disregard any of the professional advice.

Accounting, Bookkeeping, Motor Vehicle

How Do I Claim Motor Expenses – A Guide For Self-employed Individuals!

George / 15/06/2022

In case you are running a business as a self-employed individual and you own a vehicle, the vehicle is also used for business purposes, the chances are that your motor expenses can be claimed. This is to handle well in order to reduce your tax bills. However, to pursue the dream of reducing your tax bills, you have to learn to claim mileage for work first. It is considered a bit complicated to claim for your motor expenses in comparison to other business expenses. The reason behind this complexity is that most likely your vehicle is being used for business purposes as well as for your personal use. This makes it hard for you to collect the receipts in an official way to submit and get them approved. This will also hinder setting the receipts off against your business profits. This guide has covered you and we have explained how can you claim your motor expenses and how can you make a record of your business mileage. Are you self-employed and want to have another business in the United Kingdom? Whether you’re managing one business or juggling multiple ventures, make sure you’re registered the right way. It’s easy and quick to Register as Self-Employed with CruseBurke. How To Claim Motor Expenses? Normally there are two ways considered when it comes to claiming your motor expenses. They are listed below: The vehicle is used for business purposes. Calculate the usage and make a claim. Calculate your business mileage and make a claim for it. In the opinion of the experts, calculating the business mileage and making a claim is found to be an easier and simpler method for several people. However, it is hard to keep track of its record. It is recommended to keep a record both ways for beginners or first-timers. This will help you to choose the method you find the most convenient. Business Usage and Travel It is not right to consider every mile that you have travelled for business purposes as a business mile. In case you are driving to your regular places for work then this will not come in the count of business travel. This will be considered your own commute. The regular places must be excluded from your business percentage. One such example is the retail unit or office that you use to work. Even when you pay a visit to your contractor or the office for whom you work as a freelancer is excluded from the list. Let’s talk about what is classed as business usage. When you travel for a meeting with your client, it is classed as a business mile. Some other examples include the following: When you travel to some temporary place for the purpose of work. When you travel to attend training or courses in business. When you travel to buy stocks. You will realise that when you exclude the commute miles from your total miles, there are very few moles left that you travelled for business purposes. Learn to Record Mileage for Work If you aim to use the method of calculating mileage to make a claim on motor expenses, it is recommended to maintain a mileage log for this cause. This will help you to make a claim. If someone asks you for the relevant details like HMRC requires, you can easily provide the details. The method you want to choose for the record of your business mileage is totally your choice. There are several simple methods and steps to maintain the records. This includes the following: A manual log to keep all the details of your journeys recorded. Record the postcodes. The distance between the postcodes is also recommended to be recorded. There are certain apps that can help you maintain the record if you are more like a tech-savvy person. Use the GPS of your mobile phone to keep an easy track of your business journeys. Claim Business Usage of Your Vehicle The famous and simple method to keep a record of the business mileage is to consider the overall business usage of your vehicle. For this method, you will have to calculate the overall mileage and then the business mileage of your car. This method is considered a bit complicated. The business will tend to pay for all the motor expenses including: Repairs and services Tax Insurance Petrol Moreover, this depends on your choice of whether you want to enter the full amount of expenses of the vehicle or just the business expenses. For this processing, you need to clearly understand the difference between allowable expenses and disallowable expenses. There is no escape from personal usage and expenses as you will only get tax relief on the business expenses. Do you want to know more about your business usage of a car? We can help you in this matter. Get in touch and enjoy instant help now. Talk to our guys today! The Bottom Line We can sum up the discussion as you have gathered a fair amount of information about how to claim mileage for work. It is suggested that you make notes about the method and details that explain how you chose the business percentage. These details can be required by HMRC or anyone related to the industry. This can be reviewed annually as well to ensure seamless processing and an accurate business percentage. We hope this guide will help you to choose the suitable method and make accurate calculations to make a claim. Disclaimer: The information about how to claim mileage for work provided in this blog is general in nature. It does not intend to disregard any of the professional advice.

Accounting, Bookkeeping

Factors that make Bookkeeping and Accounting Different from Each other!

George / 30/05/2022

Whether you are a businessman or an accountant, you do realise the importance of bookkeeping and accounting in every sector of the business. Keeping a track of the records related to money transactions has been a practice for ages on different levels. However, in this era, the practice has raised its standards and it requires speedy and seamless processing as well. If we talk about accounting or bookkeeping, they are parts of the same family without a doubt. There are certain key functions related to this that is needed to be practised vigilantly. Moreover, in this article, we will stay focused on understanding the basic introduction of what is bookkeeping or what is accounting to be precise. There are of course some prominent factors that bring differences between both of them. We will put light on that explanation as well. What is Bookkeeping? Bookkeeping refers to the maintaining of records about the money transactions of your business in order to monitor the incoming and outgoing money. To have a better and clear view of the financial health of your business, the need is to monitor the money transactions on a day-to-day basis. When you are certain about your financial position in a business, this will lead you to make the right business decisions as well as handle your tax submissions with increased confidence. The job is done by the bookkeepers to handle the relevant data about daily transactions to add to the bookkeeping software. By using this precise information about your business finances, you will be able to present a summary and give error-free and updated financial details about your business. If we focus on the job of a bookkeeper, to be precise, it is often considered that they are to enter the details of the customer and the purchasing invoices. The list also includes some other typical duties like: Filing VAT returns Have control over the account balance Reconciling cash Posting Journals etc They are supposed to reconcile the control accounts. Bookkeepers are required to complete double-entry bookkeeping. It all depends on the role of a bookkeeper in the business as to what tasks they will carry out. The bookkeepers do it by having good use of the accounting software that you provide them. In order to ensure that the error-free data about your business finances is reaching HMRC and other required parties, it is important to ensure accurate and timely bookkeeping as well. What is Accounting? Accounting is all about the records of the financial details of a business and making its summary in a useful manner. This will help to make smart business decisions and interpret the data in a beneficial way. This required that the account should clearly depict the details of the following: How much profit is your business making? What is the current value of your liabilities and assets available in your company? What is the position of your cash flow? Having an analysis by delving deeper into your finances, the accountant allows you to look at variances and trends with a clear view. The accounts also use the data gathered by the bookkeepers which are mostly through the accounting software. This data further helps to reflect the actual position of the business. This could involve the year-end adjustments like stocks and prepayments as well as accrual adjustments. After all these steps, the accountant presents the data in form of year-end financial statements. Get in touch with our accountants to get to know more about bookkeeping and its essential factors. We promise to provide instant help. Call us on 02086868876 or email us today. What’s the Difference Between Bookkeeping and Accounting? There are several factors where bookkeepers and accountants overlap. In one way or another, both of them carry out the same job other than a few points. Bookkeeping is considered a part of the accounting process. The major difference is that in bookkeeping you tend to categorise and record your financial details, whereas, this gained data is further used in accounting for planning strategies. To help you understand the differences, we have listed a few points below: Making the Right Business Decision: With bookkeeping, you do not gather enough information to let you make your business decision. However, in the accounting process, the gathered information will help to further analyse and you are able to make your business decisions. Required Skills: A bookkeeper should be knowledgeable about the duties of bookkeeping and accurate in the working. However, an accountant is required to have relevant experience and a degree in accounting. Financial Details: Management of the financial information is normally not done in bookkeeping, however, the accountants are asked to manage and analyse the data to interpret it. Budget, management accounts, and financial statements are also the responsibility of the accountants. Responsibilities: The bookkeepers give you a surety of recording the required financial data and updated filing as well. The accountants on the other hand keep monitoring the broader financial health of the business and communicate it to the management. The Bottom Line Finally, the discussion of bookkeeping and accounting can be summed up by saying that the challenge for a business is to seek the right kind of bookkeeper or accountant to get the job done. The business owners should consider that there possibly can be many individuals who might claim to do the bookkeeping as well as the accounting job. However, hiring a bookkeeper and expecting him to make the financial statements is not a wise decision. We hope you have gathered enough information from this blog to make the right business choices. If you are still stuck with your accounts and seek professional help, get in your car and reach out for a meeting. We will love to hear out about your queries and offer instant help. Disclaimer: The information about the differences between bookkeeping and accounting explained in this blog is general in nature. It does not intend to disregard any of the professional advice.