Businesses must provide records of their accounts by law. It is a requirement for companies to report their financial performance to the market systematically, informatively and consistently. These rules are instigated so that business performance can be compared in an unbiased way across the market. Because business is about balance in relation to all other businesses, inaccurate or misleading financial information about one company could have a domino effect on the market-place. According to a survey by Accounting Age, one in 10 accounts filed to Companies House is rejected due to mistakes. Mistakes, such as miscalculations on crucial figures, can result in business having to pay more tax than they really owe. There are numerous tax deadlines throughout the financial year that, if missed, will result in a penalty. One error or a single delay could result in businesses having to pay interest on top of late fees. It may be worthy to note, however, that the HMRC reward good organisation skills. If you are prepared to pay your tax early, then you could earn interest. It takes a lot of time, patience and a certain amount of mathematical ability to produce good account records. Managing accounts for limited companies can be particularly complicated. HM Revenue and Customs suggest that Limited Companies seek a solicitor or accountant for help with Corporation Tax.
Accurate accounting is not only a legal requirement, it is essential for the proper functioning of the business world. Experts commonly refer to accounting as the "language of business". Just as language constitutes the framework of civilization, accounting constitutes the main driving force behind commerce. Accounting is the bridge, the method of communication between business and market. A single bad business decision is often enough to secure your business's failure. In order to make a good business decision, you will need to have a detailed knowledge of your business's financial history, current state and future forecast - otherwise your business could end up losing more than it could ever hope to make. An accountant will use this information to predict the most profitable path to take, potentially determining the success of your business.
When it comes to paying less, many accountants know certain 'tricks of the trade'. These are all entirely legitimate ways in which businesses can keep their tax rates as low as possible. Many businesses pay more than they need to, simply because they don't know about certain government schemes and initiatives, flat rate schemes or certain expense claims that can end up saving thousands. Accountant know how to make cost-effective business decisions, and they also know how to avoid hidden costs. All of this information can be found across our accounting services pages.