Category: Resources

Cloud Accounting and Bookkeeping

Cloud Accounting is a term used to describe the use of cloud-based software to manage financial operations. This can include bookkeeping, invoicing, tax preparation, and other accounting tasks. Cloud Accounting offers numerous advantages over traditional desktop-based accounting software, including: anytime and anywhere access and automatic updates. In addition, Cloud Accounting is often more affordable than desktop software, as it is subscription-based and requires no upfront investment. Perhaps most importantly, Cloud Accounting helps businesses to save time and money by streamlining financial operations.
While desktop-based accounting software has its advantages, there are also some significant drawbacks. One of the biggest issues is that it can be slow, especially when dealing with large amounts of data. When you are trying to get work done, the last thing you want is for your software to slow you down. Another downside is that it can be expensive to purchase and maintain, especially if you require multiple licences. Finally, desktop-based accounting software is particularly vulnerable to data loss in the event of a hard drive failure or other mishap. The way to mitigate these risks is using cloud-based backups. For businesses that need to keep track of their finances, desktop-based accounting software may not be the best solution.
Cloud accounting software provides small businesses with a number of advantages over traditional desktop-based solutions.
The ability to view detailed reports in real-time, perhaps the most important benefit. This gives business owners a much better understanding of their financial situation and allows them to make informed decisions about where to allocate resources.
Online payment options, it helps simplify the process of billing and collecting payments from customers.
Allows for team collaboration, which is extremely useful for businesses that have more than one role in the accounts department and working from different locations.
There are a number of different Cloud Accounting software solutions on the market, including Sage, Xero, QuickBooks, and FreeAgent. Each platform has its own unique set of features, so it is important to choose one that meets the specific needs of your business.

We are Xero Certified Advisors and joined Xero Partner Programme. We highly recommend that Xero is one of the top cloud-based accounting software in the market and they are continuously developing to make their software works harder for businesses in the UK.

However, we understand the pain of switching software sometimes so we are also familiar with other accounting software that we are happy to work with you.

Paperless Working Environment

In today’s business world, paperless accounting is becoming more and more popular. Cloud storage has been widely adopted and computerised filing systems have made it easier than ever to go digital. Electronic filing systems offer a number of advantages over paper-based alternatives, including reduced clutter, improved organisation and quicker retrieval times.

There are many advantages to paperless bookkeeping:
Reduced storage costs, improved security, and easier compliance with regulatory requirements.
Much easier to organise, and keep track of, than paper records.
Easier to share paperless records with others, such as your Accountant or business partners.
More secure than paper records, which can be easily lost or stolen.
Can help to save time and money by reducing the need for paper processing and mailing.

Perhaps the most important benefit of paperless accounting is that it can help businesses to go green. By eliminating paper use, businesses can save trees and reduce their environmental impact. As businesses increasingly adopt paperless accounting systems, it is clear that this trend is here to stay.

Digitising your files can help to reduce your environmental impact by reducing paper consumption. However, some people remain reluctant to switch to a digital filing system, citing concerns about data security and the learning curve associated with new technology. While these are valid concerns, the benefits of digital filing are hard to ignore. With a little time and effort, anyone can learn to use an electronic filing system, and the rewards are well worth the investment.

We have now helped many businesses to work out a bookkeeping process that allows all information to be captured and matched exactly to their business activities. No more paper in the office because the entire filing system is online and can be viewed on one screen. With the online filing, we can find everything quickly with just a keyword, date or amount of the transaction.
There is no need for keeping piles of expense receipts anymore. Whenever a staff member has some expenses to claim, all they need to do is use their smartphone to capture a photo of the receipts, as they are incurred, and send them to the relevant destination and it will be processed accordingly. This smooths out the expenses claim process and reduces the struggle of looking for those tiny receipts or to run the risk of losing them.
The precise bookkeeping process depends on each business’s operation model and needs.There are many different ways or different software that can help the business to go paperless.

Making Tax Digital

To make it easier for individuals and businesses to get their tax returns right and to help businesses keep on top of their affairs, HMRC has been working hard to move towards a modern, digital tax service fit for the 21st century. Making Tax Digital (MTD) is the new requirement from HMRC. We will enable you to follow the Making Tax Digital rules by keeping digital records and using software to submit your tax returns.

MTD requires all VAT registered businesses to keep records digitally and file their VAT Returns using software and is now also applicable to Income Tax Returns which will affect many individual taxpayers too.

For small or start-up businesses, hiring an Accountant could be expensive, especially before the business starts to make profit. It’s not fun to have big bills coming through your door or to worry about debt. But it doesn’t have to be that way!

We are well aware of the HMRC requirements and we are willing to work with start-up or small businesses to support you as you are building up your business. We will help you with your bookkeeping, submit all your tax returns using our compatible software to make sure your accounts are compliant.

We are an AAT and ATT qualified practice. Our area of expertise is helping businesses design the best financial processes that suit their business, so that they can always see their business performance in an appropriate and timely fashion.  We will maintain all of our clients’ bookkeeping processes in a state of completion from the onset to avoid any year-end stress during the tax filing process!

Please contact us with your specific request. We also offer a free 30-min free non-obligation consultation so you can discuss and ask any questions you may have.  

Sage accounting is an all-inclusive software solution that helps small businesses and freelancers keep their accounts organized. It offers robust features such as income/expense tracking in multiple currencies, inventory management, invoice creation and integration with third party applications to streamline business operations.

Originally created for large industrial organizations needing data processing capacity, Sage now provides a simplified version tailored specifically to microbusinesses’ needs giving them easier access to the same powerful tools used by trained accountants and bookkeepers worldwide.

Sage has been a trusted ally for British accountants, with an impressive 90% recognising the Sage format. They’ve devoted themselves to ensuring their users benefit from innovative solutions and features tailored specifically to meet small-to-medium sized business needs – establishing lasting loyalty along the way.

Sage Accounting Software has easy-to-use interface that provides:

• Desktop and cloud-based options.
  Manage incomes and expenses.
• Producing finance reports such as P/L, Balance Sheet etc.
• Automatically calculate and submit VAT returns to HMRC.
• The ability to invoice customers using tailored invoices.

Sage accounting allows seamless integration with third-party apps to enable smooth business operations.

Sage can take your business operations to the next level – its customer services are unparalleled and flexible features make it an ideal choice for businesses of all sizes. We offer dedicated migration support, so you won’t have any data loss when transitioning over from other systems. Let us help you get started today!

Bookkeeping for Mechanical Garages

If you have a mechanics or garage business, you must be aware of the common problems that arise when it comes to accounting and bookkeeping. It’s still largely a paper-based industry and most purchases are cash based . The manual nature of keeping track of expenses and revenue often makes it challenging to keep track of costs, vital for tracing and accounting profitability accurately .

What is bookkeeping for mechanics and garages all about?

Bookkeeping for mechanics and garages involves tracking financial transactions such as income from repairs and sales, expenses for parts and labour, and payments to suppliers. This information is typically recorded in a manual ledger or computerised accounting software. It can be used to generate financial statements, such as profit and loss reports and balance sheets. This can help the business owner make informed decisions about their operations’ progress.

It is also important to keep track of inventory, customer information, and employee records. As such, it is recommended to hire a professional bookkeeper or outsource a bookkeeping subcontractor to keep track of finances, ensure compliance with tax laws and update financial records accurately.

Key bookkeeping challenges faced by mechanics and garage businesses

There are several key challenges that mechanics and garages may face when it comes to bookkeeping:

Keeping accurate records: Recording financial transactions can be time-consuming and requires attention to detail. It can be difficult to keep up with the volume of transactions that occur in a busy garage.

Managing inventory: Keeping track of inventory can be challenging, particularly for garages that sell a wide range of parts and supplies.

Staying compliant with tax laws: Mechanics and garages must comply with relevant tax laws and regulations, which can be complex and time-consuming.

Keeping up with changes in technology: The rapid pace of technological change in the automotive industry can make it difficult for mechanics and garages to stay up-to-date with new tools and equipment.

Cash flow: Cash flow can be a challenge for any business, and mechanics and garages are no exception. Many customers pay after the service is done. As such, the garage may have to pay bills before they are paid, which can put a strain on cash flow.

Managing employees: Managing employees can be a challenge, particularly when it comes to tracking hours worked, overtime pay, and compliance with labour laws.

Lack of expertise: Small businesses may not have the expertise to handle bookkeeping and accounting, it may be difficult but vital to ensure that financial records are accurate and up-to-date.

How can a professional bookkeeping subcontractor help mechanics and garages?

By hiring a professional bookkeeper or accountant, your mechanics and garages business can overcome these challenges and better manage their finances.

Keeping track of finances and inventory: A bookkeeping subcontractor can help  your businesses keep accurate records of all financial transactions, including income, expenses, and payments. This can help the business owner generate financial statements such as profit and loss reports and balance sheets. With their guidance and assistance, you can better understand your inventory levels, manage your inventory effectively, and make informed decisions about purchasing.

Improve your compliance and employee management: A bookkeeping subcontractor can help mechanics and garages businesses ensure compliance with all applicable tax laws and regulations. This can help the business avoid penalties and fines for non-compliance. Furthermore, the professional can help the business manage employees by tracking hours worked, overtime pay, and compliance with labour laws.

Improve cashflow management: A bookkeeping subcontractor can help  your business manage cash flow by creating a budget, forecasting future financial performance, and monitoring accounts payable and receivable. These professionals have expertise in bookkeeping and accounting, so they can provide the business with the knowledge and skills needed to keep financial records accurate and up-to-date.

Overall, a professional bookkeeping subcontractor can help your business better manage its finances, stay compliant with tax laws, and make informed decisions about your operations. Such professionals can provide valuable advice to the business owners on financial decisions, such as investments, loans, and other financial matters. They can also assist in creating a budget and forecasting future financial performance.

Penny’s Bookkeeping Services have worked with mechanics and garages, we have the experience in terms of what types of challenges this business sector may encounter and can help you to work out an economic way to handle the bookkeeping for you, so you can just focus on running your garages or workshops successfully. Contact us now for any queries you have for your business finance process. We are offering 20-min free consultation, we are happy to answer any questions or challenges you are facing at your business. 

Management Accounts for Transportation Business

Bookkeeping for the transportation industry encompasses keeping track of financial transactions related to the operation of a transportation business. This can include expenses such as fuel costs, vehicle maintenance, and employee salaries, as well as revenue from the transportation of goods or passengers.

It is important to accurately record and track financial transactions to maintain financial stability and make informed business decisions, keeping your company profitable. Many transportation businesses use specialised software or hire bookkeepers with experience in the industry to manage their bookkeeping.

When thinking about bookkeeping, transportation companies may either choose to outsource the function or hire an in-house professional to perform the function; both approaches have their own pros and cons. In either case, costs and revenue of a transportation company should match up and it may be necessary to process large numbers of time sheets of jobs to obtain meaningful management accounts.

Features of bookkeeping for the transportation industry

The features of bookkeeping for the transportation industry typically include:

Integration with transportation management software: Many transportation businesses use software to manage operations, and bookkeeping software can integrate with these systems to import data and automate the process.

Invoicing and billing: The ability to generate invoices and bills for customers, and track payments received.

Fuel tracking: Tracking fuel consumption and costs, to generate reports to analyse fuel efficiency.

Asset management: Tracking the purchase and maintenance of vehicles and other assets, and generate reports to track depreciation and asset utilisation.

Payroll management: The ability to manage employee payroll and taxes, including calculating and tracking employee pay, benefits, and deductions.

Financial reporting: To generate financial statements and reports, such as balance sheets, income statements, and cash flow statements.

Tax compliance: Generating reports and tax filing necessary for tax compliance, such as sales tax reports and tax returns.

Accessibility: Accessing and updating financial information from anywhere, through desktop or mobile devices.

Key bookkeeping challenges faced by the transportation industry

1. Managing costs: Transportation companies usually would have a small admin team, but probably a much larger front line temporary staff team as drivers. So, managing costs and wages of the drivers is always the biggest challenge. To stay compliant with employment laws, every member of staff, permanent or temporary, need to be paid. It is a challenge to produce meaningful management accounts reports needing to match the direct costs of drivers’ wages, and the transportation job from clients.
2. Managing cashflow: Getting paid by clients and managing the cash flow can also be a challenge. Clients may have 30-day payment terms as is the normal business practice here in the UK, but temporary staff, including drivers, would have to be paid weekly. As such, managing cash flows can be challenging for transportation companies.
3. Maintaining accurate records: The workload involved when following the rules of a transportation business; getting all drivers trained properly and staying on top of driver’s licenses etc. could mean a business needs more professional admin workers. Even if there is a large admin team to manage purchases and the sales ledger, it can be challenging to record transactions accurately and on time.
4. System integration and security: Integration with other systems, such as transportation management software, can be complex and time-consuming. But it can also provide significant benefits in terms of automation and accuracy. Also. storing sensitive financial information, such as employee payroll information, can be a challenge for transportation companies. At the same time, it is important to ensure that data is secure and protected from cyber threats.
5. Time management: Bookkeeping can be time-consuming and can take away from other important tasks related to running a business. It is important to prioritise bookkeeping tasks and allocate sufficient resources to ensure that tasks are completed accurately and on time.

Fraud protection: Fraud can be a significant risk for transportation businesses, and it is important to have systems and controls in place to detect and prevent issues. This may include implementing internal controls, such as segregation of duties, and conducting regular audits.

Closing lines

It is important for transportation companies to have accurate and up-to-date bookkeeping records to make informed financial decisions, comply with tax laws, and ensure the long-term financial success of the business.

Penny’s Bookkeeping Services has great experience working with transportation industries and we can help you to design your own bespoke financial process that works for you. You’ll have access to accurate and timely financial data as you need it.

In-House vs Outsource Bookkeeping Roles

There must be someone who oversees a company’s accounting functions, regardless of its size. Bookkeeping was traditionally handled internally; indeed, it is still held in-house by many companies worldwide. But has it always been the best option, and is it the best option for your company? What if you could outsource all your accounting work to a bookkeeping subcontractor – a company with the expertise to manage your company’s finances efficiently? That’s exactly what smart companies are doing today. Are you unsure about what is best for your business? Here’s a breakdown of the differences between outsourcing and in-house bookkeeping – which is better, and why – so you can make more informed business decisions.

In-house bookkeeping

The Pros

A full-time employee who knows your business: An in-house bookkeeper is normally a full-time employee. That gives them first-hand knowledge of your company and how it operates. Large corporations have the resources and enough accounting work to justify hiring a full-time bookkeeper.

The Cons

Hiring in-house is difficult: Finding a qualified and experienced bookkeeper is not easy. These people are in demand, and finding the right person takes time. If you don’t know the credentials or experience to look for, the person you end up hiring might not be able to meet your business standards or needs.

Hiring in-house is expensive: You could also hire someone without prior experience. Finding the right person for this job and then hiring, training, and onboarding them will take time and money that you may not have.

A full-time bookkeeper can be a waste of precious resources: As a startup, you may not have enough business to hire a full-time employee. Even for small businesses, hiring a part-time employee is impractical due to the minimum wage requirements.

Your bookkeeping team lacks expertise: Accounting and bookkeeping are incredibly complex tasks that require in-depth industry knowledge and experience for optimal efficiency. A tall task if you have one person or possibly even a small team to manage your business in-house.

Outsourcing Bookkeeping

The Pros

Trained professionals at your service: Dedicated outsourcing accounting or bookkeeping firms have teams of trained and experienced bookkeepers who, over the years, have worked with various businesses. When you hire a bookkeeping subcontractor, you have access to their teams and expertise.

Pay less for highly experienced services: When you outsource, you only pay for the services you avail. Employee costs such as pensions and NI, office equipment, office space, time off, and insurance are not incurred. You pay less; the individual who conducts the work for you may have much more experience than the price paid for their expertise.

A further benefit – outsourcing to a bookkeeping subcontractor allows you to scale up and use more services just-in-time, either when your business grows or if it’s scaling down during a slump.

Access to a wealth of knowledge dedicated to your business needs: Using a bookkeeping subcontractor, you can work with a company that provides financial services across industries. It brings a wealth of experience, the industry’s best practices, and specialised knowledge, ensuring you receive excellent industry-specific services. Along side that, you can be sure that your books are always up-to-date and strictly compliant.

Access to accounting tools and systems: You don’t simply pay for a professional service when you outsource. You get a team that uses advanced accounting system and tools – at no extra cost to your bottom line – to ensure your business needs are met. If you hire an in-house team, these tools and systems, and training your team to use them, will be an additional cost.

Final thoughts

Bookkeeping shouldn’t be taken lightly; from ensuring your books are straight, to the day-to-day recording of all your financial information; from filing taxes and returns to managing audits; from payroll support to managing accounts and providing insights into your business’s financial performance. There’s a lot that is involved in bookkeeping. For startups and small businesses, all this is managed on a smaller scale, but it’s still difficult to be managed by an in-house bookkeeper. Hiring a bookkeeping subcontractor ensures an expert team takes care of all your bookkeeping and accounting chores. You also get access to accounting and finance expertise and a host of cost and time-saving benefits that safeguard that your business needs are met.

Do you need a dedicated bookkeeper to oversee your company’s finances? With Penny’s Booking Services, you get more than a dedicated team to manage your bookkeeping activities. You also get a high level of experience and professionalism. Get in touch with us today to find out how we can help you.

Xero’s online accounting software is a great solution for small business owners who want to stay connected with their numbers, bank, and advisors. With free and unlimited customer support, switching your existing data to Xero is simple and easy. You can even convert up to 24 months of your accounts for free – a saving of £180. Xero integrates with over 800+ third party solutions, making it the most versatile accounting platform on the market. Daily online backups protect your data, so you can rest assured knowing that your information is safe and secure. Ultimately, Xero provides peace of mind so you can focus on running your business.

Xero is a versatile accounting program that gives you the tools to manage your finances from anywhere. You can process sales invoices, reconcile bank with tax feeds and attach all necessary documents for year-end auditing through this irresistible service! It also provides solutions in Making Tax Digital which allows users to submit their taxes easily through its digital filing system directly at HMRC without worrying about compliance issues or back-end settings not being up to date as per requests made by the tax authority.

The cloud storage system ensures security, giving peace-of-mind knowing all data will be saved even when offline or if there’s an accident with the device on which it resides! You can access Xero easily from any device as long as you are connected to the internet. You do not need to back up the software, everything is stored in the cloud and securely backed up.

Xero runs daily online backups of your business information. Your data is encrypted, safe, and secure, giving you the ultimate peace of mind. Plus, with Xero Payroll and Xero Expense integrated into the software, you can manage all aspects of your business finances in one place. And with Xero Tax, you can easily file your taxes online.

We are Xero Certified Advisors and Xero Partners. We have worked with many clients using Xero Accounting Packaging to help organise their accounts.

We are experienced at setting up new clients on the software, helping them set balances so their accounts continue smoothly running in it.

We are also Xero Payroll Certified and Xero Tax Specialists. This means if you are already using Xero, or if you choose to use Xero as your bookkeeping software, we will be able to help you to set up and make Xero work for your accounts to its maximum extense.

Bookkeeping with Quickbooks

Maintaining financial accounts manually can be a challenge, particularly for small businesses. It is tedious, and time-consuming and can cause accountants to make human errors leading to inaccurate financial records. When records are maintained in paper format, there’s a high chance of misplacing documents. So, what’s the alternative? As a small business owner, you can use software that automates accounting tasks and provides you with important company information and time to concentrate on the other aspects of your business. A great software solution is QuickBooks.

What is QuickBooks?

Quickbooks is one of the most popular accounting software for small businesses. The software is easy to use and automates many of the accounting tasks such as VAT tax management, invoicing, budgeting, inventory management, time tracking, and many more features and benefits. By automating accounting tasks, you eliminate manual data entry and free-up time that can be spent on growing your business.

Let’s have a look at how QuickBooks can help businesses like yours.

How Can QuickBooks Help Businesses with Accounting?

Connects Seamlessly With Various Banks

QuickBooks connects with your bank accounts, and as a result, you will get a complete picture of all your finances and cash flow. You don’t need to juggle between different bank applications to check the status of your finances, QuickBooks has everything you need in one location.

Helps In Creating Invoices Instantly

As a small business, you require invoices to be generated instantly so that you can received owed monies, paid quickly, from your customers. Even with a slight delay, your financial accounts can suffer. QuickBooks shines in this regard. With QuickBooks, you can generate personalised and professional invoices instantly and keep your cashflow flowing. It also allows you to track invoices so you can easily send reminders to customers to settle monies owed.

Automates Expenses

QuickBooks automatically organises your receipts and bills in one place. All that is needed is take a photo of the receipts or bills and the app automatically arranges and stores them in one place. This is a great time saver, which is just not possible with manual data entry.

Assists In Making Tax Digital

You may have heard of “Making Tax Digital” (if not, you can click the link). It has been introduced by HMRC to help businesses and individuals report tax easily. In the UK, Making Tax Digital is about submitting VAT returns. In the future, it will include Income Tax and Corporation Tax as well.

Currently, QuickBooks assists in submitting only VAT returns to HMRC. It collects the data for VAT returns, and once approved by you, Quickbooks submits the returns to HMRC directly from the app.

It helps In Payroll Management

QuickBooks makes it easy to calculate pay for you and your employees. Payslips are automatically generated and can be shared with your employees.

Generates Accounting Reports

QuickBooks generates accounting reports enabling you to assess your business financial performance over any given period so that you know where the costs are and where your business is making money. Aside from reporting, you can also access cash flow statements, profit and loss statements, and many other useful features too.

QuickBooks Pros And Cons

Pros

• Easy to use software application.
• Integrates with third-party applications.
• Can be accessed from any device.

Cons

• Access is limited to a certain number of users.
• Lack of invoicing design tools.

QuickBooks Offers Different Pricing Plans

QuickBooks offers varying pricing plans for businesses like Simple Start, Essentials, Plus, and Advanced.

To summaries, QuickBooks simplifies the accounting process and makes it much easier to manage your company’s finances. Its robust features, easy-to-use interface, and security features make QuickBooks a must-have piece of software for businesses of any size.

Penny’s Bookkeeping is very well versed with Quickbooks, and if you are looking to use Quickbooks, we can help you to set up the software and getting started, so that you can manage your accounts efficiently.

Bookkeeping Services for Salon Businesses

Businesses like nail or hair salons, massage parlours are based on appointments taken. Today’s technology also allows appointments to be booked or purchased online with third party online booking systems. It is a great tool to take the appointments and achieving sales, however recording them accurately for your finance book could be challenging.

Many salons who process online booking appointments, also offer discounts and vouchers adding to the complexity of the basic bookkeeping tasks. If your business is VAT registered, are you aware of your VAT obligation when selling and redeeming these vouchers and discounts?

Accounting information can be invaluable to identify how popular products and services are, as well as to manage staffing and scheduling efficiently. It is also very important for salon owners to track their cash flow; the movement of money in and out of the business. This can help identify potential cash flow issues, such as not having enough funds to pay bills, and so enable steps to be taken to address these issues quickly.

How can salon owners keep on top of  bookkeeping challenges?

Record-keeping: Salon owners may have a hard time keeping accurate records of financial transactions, leading to errors in the business financial statements. By using accounting software, salon owners can automate many of the bookkeeping tasks, such as invoicing customers, reconciling bank and credit card statements, and creating financial statements. This saves time and reduces risks of errors.

Inventory management: Salons often sell retail products, so accurate tracking of inventory levels means efficient reordering of products as needed. This can be a challenge if there is a very manual system in place to track inventory. By using inventory management software or features within accounting software, salon owners can track inventory levels in real-time and reorder products just in time, easing cash flow, or as and when needed.

Cashflow management: Salons may struggle with managing cash flow due to the fluctuation of revenue throughout the month. By creating a cash flow forecast, salon owners can anticipate when there may be cash flow issues and take steps to address this before they become a problem.

Tax compliance: Salon owners may have a hard time understanding the tax laws and regulations that apply to their business. This can lead to errors in tax returns and result in potential penalties. To stay compliant with tax laws and regulations, salon owners can seek the help of a professional bookkeeping subcontractor.

Payroll management: Salons have to pay their staff and this can be a challenge when staff are on commission, are part-time or on different pay rates. By using accounting software to manage payroll, salon owners can automate the process of calculating pay, taxes, and benefits. Payroll management can save time and reduce the risk of errors.

In Conclusion

Bookkeeping is an important aspect of running a successful salon. Accurate and timely financial record-keeping can help salon owners make informed decisions, stay compliant with tax laws, and secure funding for growth and expansion. By implementing these basic strategies, salon owners can improve the efficiency and accuracy of their bookkeeping, stay compliant with tax laws and regulations.

Penny’s Bookkeeping Services have worked with a number of clients in this area and has experience in handling the bookkeeping process for any appointments-based service industry.

Please contact us for any support needed or any queries you may have.