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The Construction Industry Scheme (CIS) sets out the rules for how payments and taxes to subcontractors for work in the construction industry must be handled. As a contractor, you must: register for CIS with HMRC. check that your subcontractors are registered with HMRC. pay subcontractors accordingly; Their Invoice value less CIS Tax. submit monthly CIS returns to HMRC. pay CIS to HMRC monthly (You are collector of the CIS for HMRC). As a Subcontractor, you must: register with HMRC; a simple online application as self-employed. if you are not registered, contractors have to deduct the higher 30% rate instead of the registered 20% rate off your invoices. Running a Limited Company under CIS You can offset your CIS deductions Taken/Suffered from payments received against the following: any PAYE payments due to HMRC your National Insurance contributions CIS deductions the company has made from its subcontractors HMRC will repay any deductions that the company is not able to offset against its PAYE liabilities. Offsetting your Monthly CIS liabilities to HMRC You can offset your CIS liabilities against your PAYE/NI payments each month. This will either reduce your CIS payments or eliminate them! CIS Record Keeping You must record all the amounts taxed. Sign up for CIS To sign up for the Construction Industry Scheme, please login into HMRC online service to register – https://online.hmrc.gov.uk/login HMRC have a dedicated helpline 0845 366 7899 if you get stuck. Reverse Charge VAT for Contractors Domestic Reverse Charge came in in Mar 2021 and applies to VAT-registered Contractors and VAT registered Intermediary Customers. This means you don’t need to charge VAT on to your Customer if they are not the End-user. Your Invoice will not show VAT but has to say “Reverse-Charge Supplies You can get more information about the Construction Industry Scheme at www.gov.uk/what-is-the-construction-industry-scheme

Bookkeeping Jargon can be daunting for many business owners. With a plethora of financial terminology, it’s easy to feel overwhelmed. However, understanding key bookkeeping Jargon is essential for managing your business finances effectively. We believe that knowledge is power and being familiar with these terms can empower you to make informed financial decisions. This guide’s aim is to cover some of the essential bookkeeping jargon every business owner should know. Account Receivable Accounts receivable refers to the money word to your business by customers for goods or services provided on credit. It’s crucial to keep track of these amounts, as they represent future cash inflows. Monitoring accounts receivable helps ensure that your business maintains healthy cash flow. Accounts Payable On the flip side, an account payable is the money your business owes to suppliers or vendors for purchases made on credit. Managing accounts payable effectively is vital for maintaining good relationships with suppliers and ensuring that your business can operate smoothly without cash flow decisions. Assets Assets are resources owned by your business that have economic value. They can be tangible, like equipment and inventory or intangible, like patents and trademarks. Understanding your assets is essential for assessing your business’s financial health and making strategic decisions. Balance Sheet A balance sheet is a financial statement that provides a snapshot of your business’s financial position at a specific point in time. It lists your assets, liabilities and equity allowing you to see what your business owns and owes. Regularly reviewing your balance sheet can help you understand your financial stability and make informed decisions. Cash Flow Cash flow refers to the movement of money in and out of your business. Positive cash flow indicates that your business is generating more money that it is spending, which is crucial for sustainability. Monitoring cash flow helps you anticipate financial challenges and plan for future expenses. Double-Entry Bookkeeping Double-entry bookkeeping is an accounting method that records each transaction in two accounts; a debit and a credit. This system helps ensure accuracy and provides a complete picture of your financial situation. Understanding this method can enhance your bookkeeping practice and reduce errors. General Ledger The general ledger is a comprehensive record of all financial transactions within your business. It serves as the foundation for your financial statements and provides detailed information about your accounts. Keeping an accurate general ledger is essential bookkeeping and financial reporting. Profit and Loss Statement Also known as an income statement, a profit and loss statement summarises your business’s revenues, costs and expenses over a specific period. THis statement helps you assess your business’s profitability and make informed decisions about budgeting and spending. Reconciliation Reconciliation is the process of comparing two sets of records to ensure they match. For example, reconciling your bank statements with your accounting records helps identify discrepancies and ensures accuracy in your financial decisions. Tax Liability Tax liability refers to the total amount of tax your business owes to the government. Understanding your tax liability is crucial for compliance and financial planning. Keeping accurate records can help you prepare for tax season and penalties. Familiarising yourself with these essential bookkeeping terms can significantly enhance your understanding of your business’s financial heath. At CPL accounts we are dedicated to helping business owners navigate the complexities of bookkeeping and accounting. If you need assistance or have any questions about financial management, don’t hesitate to reach out.

We know that running a small business is no small feat. From managing day-to-day operations to strategic planning, there’s an endless list of tasks that demand your attention. Amidst these challenges, keeping track of financial transactions and maintaining accurate books often fall by the wayside. Even though they are, debatably one of the most important parts of running a business. That’s where a bookkeeper comes in. If you hire a bookkeeper to work full time for you, it can truly be a game changer. But isn’t cheap. There are a variety of options available to you when it comes time to look for a bookkeeper. From freelance, to high quality outsourced bookkeeping services like CPL accounts. We always recommend looking into the options available to your business, and what you’re able to afford. For small to medium businesses, who don’t require daily bookkeeping work, we recommend looking at outsourcing your bookkeeping rather than hiring an internal bookkeeper. And we’ll delve into all the benefits of outsourcing your bookkeeping in this blog. Understanding the Role of a Bookkeeper A bookkeeper is a professional who records and organizes a company’s financial transactions. Meticulously recording all income and expenses, ensure bills are paid on time, invoices are sent promptly, and financial records are accurate and up-to-date. A bookkeeper can also assist with payroll, bank reconciliation, and preparing financial statements. An outsourced bookkeeper takes care of these tasks as and when you need them. At CPL Accounts we offer a variety of different services depending on the level of bookkeeping your business requires and what you can afford. Reasons Why a Small Business Should have a Bookkeeper Time and Efficiency: As a small business owner, your time is best spent on core business activities, not on managing books. When you hire a bookkeeper, they can take over the time-consuming task of record-keeping, freeing up your time to focus on growing your business. When it comes to outsourcing, bookkeepers are there when you need them, giving you a quick turnaround for tasks that require their services. Financial Accuracy: Mistakes in bookkeeping can lead to financial implications, including inaccurate tax filings and over or under-statement of income. A professional bookkeeper, whether hired internally or outsourced, with their expertise and attention to detail, can significantly reduce the risk of errors. Cash Flow Management: Effective cash flow management is crucial for the survival and growth of any business. A bookkeeper can help monitor cash flow, enabling you to identify trends, plan for the future, and make informed business decisions. Regulatory Compliance: Businesses are required to adhere to various financial regulations. These may include tax laws, employment regulations, and reporting requirements. When you hire or outsource a bookkeeper, they can help ensure your business is compliant, reducing the risk of financial penalties or legal issues. Financial Analysis and Insights: A bookkeeper doesn’t just record transactions; they can also provide valuable financial insights. Regular financial reports can help you understand your business’s financial health, identify opportunities for growth, and spot potential issues before they become serious problems. Peace of Mind: Knowing your financial records are in the hands of a professional can give you peace of mind. You can rest assured that bills are being paid, receivables are being tracked, and all transactions are being accurately recorded. Making the Decision While hiring a bookkeeper is an additional expense, the benefits they bring in terms of time savings, financial accuracy, and business insights often outweigh the cost. Using an outsourced service like CPL Accounts rather than hiring a full time bookkeeper as part of your team, not only gives you access to experienced professionals, but also allows you to save on monthly costs. Good bookkeeping is not just about compliance; it’s also a critical tool for business success. By providing a clear picture of your business’s financial health, a bookkeeper can help set your business on a path of sustainable growth and profitability.

You may or may not have heard of a post balance sheet event before but in the world of finance and bookkeeping, it is a fairly common occurrence. To understand what a post balance sheet event is, you first need to understand what a balance sheet is. A balance sheet is a financial statement that provides a snapshot of a company’s financial condition at a specific point in time. It records all of the ingoing’s and outgoings of a business to give an accurate financial analysis and help ensure that the correct amounts of tax are paid by a business each year. A post balance sheet event, also known as a subsequent event, refers to an event or transaction that occurs after the balance sheet date but before the financial statements are finalised and approved for issue. These events can provide additional information about conditions that existed at the end of the reporting period (balance sheet date) or those that arose subsequent to it. Essentially it’s a financial event that will effect a business for their tax returns and financial reporting, but missed the deadline to be added to the balance sheet. This can be for a number of reasons as we discuss below. How Does a Post Balance Sheet Event Work? Post balance sheet events are typically divided into two categories: Adjusting Events: These events provide additional evidence about conditions that existed at the balance sheet date. For instance, if a lawsuit was filed against the company before the balance sheet date, but the outcome was decided after the balance sheet date, it would be an adjusting event. In such cases, the financial statements must be adjusted to reflect the new information. Non-Adjusting Events: These events pertain to conditions that did not exist at the balance sheet date but arose subsequent to it. For example, if a natural disaster damaged company property after the balance sheet date, this would be a non-adjusting event. Such events aren’t reflected in the financial statements; however, if the event is significant, it should be disclosed in the notes accompanying the financial statements to keep the users informed about the event and its potential financial impact. Why are Post Balance Sheet Events Important? Accuracy of Financial Statements: These events can have a significant impact on the company’s financial statements. Adjusting events can alter the figures in the statements, while non-adjusting events, although not affecting the figures, require disclosure to provide a complete picture of the company’s financial health. Investor Insights: Post balance sheet events can give investors and other stakeholders significant insights into events that may affect the company’s future financial position. Regulatory Compliance: Accounting standards such as International Accounting Standard (IAS) 10, ‘Events after the Reporting Period’, provide specific guidance on how to account for and disclose such events, making their understanding essential for regulatory compliance. In conclusion, understanding what a post balance sheet event is and how it works is crucial to ensure the accuracy of financial statements and compliance with accounting standards. It also provides valuable insights into the company’s financial position post the reporting period, aiding stakeholders in making informed decisions. Remember, a clear understanding of these financial nuances is what enables a company to navigate the business landscape successfully. For more information and assistance with your bookkeeping needs, get in touch with CPL Accounts.

So, what is a finance manager and how can outsourcing this role benefit your SME? As an SME (small to medium-sized enterprise), you’re probably used to juggling a multitude of tasks, from marketing and sales to operations and finance. But as your business grows, so does the complexity of managing your finances. Here at CPL Accounts, we offer a variety of different bookkeeping-related services, with different levels of care. One of our newest services includes a finance manager who is there to support your business growth. Learn more about what a finance manager is and how they can help support your business in this blog. What is a Finance Manager? A finance manager is a professional who oversees the financial health of an organisation. They take the reigns of financial planning, management of financial risks, record-keeping, and financial reporting. Their expertise extends to budget planning, maximising profits, and making strategic investment decisions to drive financial growth. The finance manager is critical in ensuring compliance with regulations and offering strategic insights based on financial data. Large businesses will hire a finance director to work within the business. But the need just isn’t there for SMEs to have a full-time member of staff around taking on this role. The Benefits of Outsourcing Access to Expertise: Essentially, a finance manager is an expert in their field and is there to help you manage your finances and make informed financial decisions. Outsourcing this role gives you access to a pool of experienced professionals who have honed their skills across various industries and businesses. They bring a wealth of knowledge to the table, helping you make informed decisions that can significantly impact your company’s financial health. Cost-effectiveness: Employing an in-house finance manager comes with associated costs like salaries, benefits, and recruitment expenses. Outsourcing allows you to only pay for the services you need, when you need them, making it a more cost-effective solution. Flexibility: Outsourced finance managers can provide varying levels of service to suit your needs. Whether it’s part-time, project-based, or on a retainer, you have the flexibility to scale up or down as required. Time-saving: Outsourcing frees up your time so you can focus on what you do best – running your business. You leave the financial management in capable hands, allowing you to concentrate on growth and innovation. The Convenience of Having a Finance Manager for SMEs Having a finance manager, particularly an outsourced one, provides immense convenience for SMEs. They can provide real-time financial insights, help streamline processes, and make adjustments to improve profitability. Finance managers can also help with strategic planning, leveraging their expertise to guide your business decisions and ensure your company’s financial stability. They play a vital role in managing cash flow, setting budgets and forecasts, and ensuring your business is financially sound, all of which are paramount for the success of your SME. In conclusion, understanding what a finance manager is, and the value they bring can be a turning point for your SME. Outsourcing this role affords you the convenience and flexibility to manage your finances effectively and strategically, setting your business on the path to sustainable growth. If you’d like to find out more about outsourcing a finance manager or are interested in any of our other services please get in touch, we’d love to hear from you.

As a small business owner, you wear many hats from marketing to customer service and of course, managing finances. While it’s essential to focus on growth and operations, bookkeeping often takes a backseat. However, maintaining accurate financial records is crucial for the success of your business. Unfortunately, many small business owners fall into common bookkeeping mistakes that can lead to financial headaches down the line. In this guide, we’ll explore the top five bookkeeping mistakes and how to avoid them. Neglecting to Keep Accurate Records One of the most critical aspects of bookkeeping is maintaining accurate and up-to-date records. Failing to do so can create chaos during tax season or when seeking financing. Without precise records, you might miss out on potential deductions or face unnecessary audits. Tip: Implement a consistent system for recording transactions. Use accounting software that allows you to track income and expenses in real-time, ensuring that you always have an accurate financial picture. Mixing Personal and Business Finances Many small business owners make the mistake of mixing personal and business finances. This can lead to confusion and complicate your bookkeeping process. It becomes challenging to determine which expenses are business-related and it may raise red flags during tax audits. Tip: Open a dedicated business bank account and use a separate credit card for business expenses. This practice simplifies tracking and ensures clear financial records. Overlooking Important Deadlines Missing important deadlines, such as tax filing dates or payment schedules, can result in penalties and interest fees. Many small business owners underestimate the importance of staying on top of these dates, which can lead to unnecessary stress and financial loss. Tip: Create a calendar that outlines key financial deadlines, including tax payments, invoices and payroll. Set reminders to ensure you never miss a deadline again. Ignoring Reconciliation Regularly reconciling your accounts is vital for ensuring your financial records are accurate. Failing to reconcile can lead to discrepancies between your books and bank statements, making it difficult to identify errors or fraudulent activities. Tip: Schedule monthly reconciliation sessions. Compare your bank statements with your bookkeeping records to catch any inconsistencies early on. This practice will help you maintain accurate financial information. Neglecting Professional Help Many small business owners try to handle their bookkeeping independently, thinking they can save money by doing it themselves. While it’s possible to manage your own books, this approach can lead to costly mistakes and inefficiencies, especially if you lack the necessary expertise. Tip: Consider hiring a professional bookkeeper or accounting service. An expert can provide valuable insights, ensure compliance with tax laws and save you time that you can reinvest in growing your business. Avoiding these common bookkeeping mistakes can save you time, money and stress in the long run. As a small business owner, it’s essential to prioritise accurate financial management to support your business’s growth and success. If you find yourself struggling with bookkeeping or simply want to ensure everything is in order, don’t hesitate to reach out for professional assistance. Ready to take control of your finances? Contact us today for a consultation and let our team of expert bookkeepers help you streamline your financial processes and avoid costly mistakes. Your business deserves the best financial support, let’s work together to achieve it!

Starting a business can be an exhilarating adventure filled with possibilities, but it also comes with its fair share of challenges. One of the most critical aspects of running a startup is maintaining accurate and organised financial records. Effective bookkeeping lays the foundation for your business’s financial health and success. Here are some essential bookkeeping tips for startups to help you get started on the right foot. Choose the Right Accounting Method Start by deciding between cash basis and accrual basis accounting. Cash basis accounting records income and expenses when they are actually received and paid, making it simpler for small businesses. On the other hand, accrual accounting records income and expenses when they are incurred, providing a more accurate picture of your financial situation. Choose the method that fits your business needs and aligns with your future goals. Invest in Bookkeeping for Startups Software Utilising bookkeeping software can greatly simplify your financial management process. Tools like Quickbooks, Xero or Freshbooks help you to automate tasks, track expenses, manage invoices and generate financial reports. Investing in the right software can save you time and reduce risk of errors in your financial records. Keep Personal and Business Finances Separate One of the most crucial tips we can give startups is to separate your personal and business finances. Open a dedicated business bank account and use it exclusively for business transactions. This separation simplifies bookkeeping, makes it easier to track expenses and provides a clear view of your business’s financial health. Stay Organised with Record Keeping Establish a system for organising your financial documents such as receipts, invoices and bank statements. Consider using cloud storage solutions or document management software to keep everything accessible and secure. Regularly updating your records ensures that you won’t scramble to find important documents during tax season or audits. Regularly Reconcile your Accounts Schedule time each month to sit down and reconcile your accounts. This process involves comparing your financial records with your bank statements to ensure everything matches. Regular reconciliation helps you catch discrepancies early, prevents accounting errors and keeps financial data accurate. Maintain a Budget and Track Expenses Creating a budget is vital for managing your startup’s finances. Establish monthly budgets for various expenses and monitor your actual spending against these budgets. Tracking expenses not only helps you stay within your financial limits but will also assist in helping you identify where you can cut costs and improve profitability. Bookkeeping for Startups includes Understanding your Tax Obligations Ensure that you familiarise yourself with your tax obligations as a startup. This includes understanding what taxes you need to pay, filing deadlines and potential deductions. Consider consulting with a tax professional to ensure that you are compliant and to help you take advantage of any available tax benefits. Consult Professional Bookkeeping for Startups If bookkeeping feels overwhelming, consider hiring a professional bookkeeper. They can help you set up your financial systems, manage your day-to-day bookkeeping tasks and provide valuable financial insights, allowing you to focus on growing your business. Effective bookkeeping is essential for the success of any startup. By following these tips, you’ll be better equipped to manage your finances, make informed decisions and set your business on the path for growth. The earlier you establish sound bookkeeping practices the easier it will be to manage your startup’s finances in the long run. If you’re looking for expert bookkeeping support we can support you. Contact us today to learn more and allow your new business to thrive!

Accurate financial management is the key to success and longevity. This is where a bookkeeper comes into play. Often overlooked, a bookkeeper’s role is critical in maintaining the financial health of a business. Let’s delve into the roles and benefits of a bookkeeper and why your business might just need one. The Role of a Bookkeeper: More Than Just Numbers A bookkeeper is much more than a number cruncher. They are the custodians of a business’s financial data, ensuring every financial transaction is recorded accurately and categorised correctly. Keeping Track of Transactions One of the primary duties of a bookkeeper is to record and categorise all financial transactions. This includes sales, purchases, income and payments. By accurately logging these transactions, a bookkeeper lays the groundwork for the financial management of a business. Managing Accounts Payable and Receivable A bookkeeper manages the accounts payable and receivable. This involves sending invoices, ensuring timely payments and keeping track of any outstanding debts. On the flip side, they also manage payments for expenses incurred by the business, ensuring bills are paid on time and logged correctly. Preparing Financial Statements Bookkeepers play a crucial role in preparing financial statements. These statements, including income statements, balance sheets and cash flow statements, provide a snapshot of the financial health of the business. The Benefits of a Bookkeeper Now that we understand the roles of a bookkeeper, let’s explore the benefits they bring to a business. Accurate Financial Data Having a bookkeeper ensures that your financial data is accurate and up-to-date. This is crucial for making informed business decisions. Whether you’re considering a new investment or planning for the future, you can rely on your bookkeeper’s records. Time-Saving Bookkeeping can be a time-consuming task, especially for small business owners who wear many hats. Having a dedicated bookkeeper saves you time that you can spend on other aspects of your business. Compliance and Peace of Mind A bookkeeper ensures you’re compliant with tax laws and other financial regulations. They keep track of deadlines, prepare required documentation and make sure your financial activities are above board. This peace of mind alone is worth its weight in gold! Financial Analysis and Advice While it’s not their primary role, some bookkeepers may also provide basic financial analysis and advice. They can help you understand your cash flow, profit margins and other financial metrics, which can steer your business in the right direction. Cost Savings Believe it or not, a good bookkeeper can save your business money. By keeping track of invoices and expenses, they can help manage cash flow and avoid late fees. They may also spot areas where you could cut costs. The role of a bookkeeper extends beyond mere number crunching. They accurately record and manage financial data, prepare financial statements and ensure compliance with financial regulations. The benefits they bring to a business – accurate financial data, time-saving, compliance, financial advice and cost savings – make them an invaluable asset. If you’re ready to reap these benefits, consider hiring a bookkeeper for your business. It’s not just an expense; it’s an investment in your business’s financial health and success. Contact us today to find out how our bookkeeping services can help you grow your business. Remember, behind every successful business is a dedicated bookkeeper!

As the end of the financial year approaches, the looming tax season can bring a mix of anxiety and dread for many small business owners. However, with proper preparation, you can simplify the process and ensure that your business is ready to tackle tax season head-on. A well-organised approach not only helps you meet deadlines but also maximises potential deductions and minimises stress. To help you navigate this crucial time, we’ve put together a comprehensive checklist to prepare for tax season. Organise Financial Records for Tax Season Start by gathering all financial documents from the past year. This includes bank statements, invoices, receipts, and any other relevant paperwork. Organising these documents early on will save you time and effort later. Consider categorising them by month or type (income, expenses, etc.) for easy access. Review Income and Expenses Analyse your income and expenses for the year. Ensure that all transactions have been accurately recorded in your bookkeeping system. This review allows you to spot discrepancies or missing entries that need to be addressed before filing your taxes. Reconcile Accounts Ahead of Tax Season Reconciliation is a crucial step in ensuring that your financial records are accurate. Compare your bank statements with your bookkeeping records to identify any inconsistencies. This process will help you catch potential errors and confirm that your financial statements reflect your business’s true standing. Prepare Financial Statements Compile your financial statements, including the income statement, balance sheet, and cash flow statement. These documents provide a clear picture of your business’s financial health and are often required for tax filings and loan applications. If you’re not familiar with creating these statements, now is a great time to consult your bookkeeper for assistance. Gather Tax Documents Collect all necessary tax documents, such as W-2s, 1099s, and any other forms relevant to your business. Ensure that you have all the necessary paperwork to support your income and deductions. If you have employees, make sure to include payroll records and any employee benefits documentation. Review Deductions and Credits Take the time to review potential deductions and tax credits available to your business. This may include expenses related to home office deductions, business travel, equipment purchases, and more. Understanding what you can deduct will help you minimise your taxable income and maximise your refund. Consult a Tax Professional to Support you this Tax Season While preparing your taxes can be a manageable task, consulting with a tax professional or accountant can provide invaluable insights. They can help ensure that you’re taking advantage of all available deductions and credits and guide you through the complexities of tax law. Create a Tax Timeline Establish a timeline with key tax deadlines, including when to file your taxes, when to make estimated payments, and when to send out tax documents to employees or contractors. Having a clear plan will help you stay on track and avoid last-minute panic. Preparing for tax season doesn’t have to be overwhelming. By following this checklist, you can ensure that your business is ready to tackle tax season with confidence. Proper organisation and planning will not only make the filing process smoother but can also lead to significant savings. If you’re feeling overwhelmed by tax season or need assistance ensuring your financial records are in order, don’t hesitate to reach out! Contact us today to schedule a consultation with our expert bookkeeping team. Let us help you navigate tax season with ease, so you can focus on what you do best, growing your business!