By Ashley Preen
December 11, 2019
Very few people like to waste their time writing down records, looking for bills or matching numbers. However, this is necessary if you want a company to strive. The past accounting process for a creative agency determine its success or failure of the present and helps establish sales and marketing strategies for the future.
Also, keeping the accounts of an agency is a legal obligation. Can you imagine what would happen if you were summoned for an audit and your accounting books were a disaster?
Successful entrepreneurs recognized that the key to success has been to keep a thorough and detailed accounting system from the beginning. With the help of this data, you can know what is failing or improving in the business model and what steps must take to reduce costs or increase profits.
Accounting provides a small business owner with valuable information about the state and health of their business. Knowledge of accounting is more important for a small entrepreneur than for the owners of a large company.
The economic status of a company is more than knowing how much money is available in the bank. Many entrepreneurs make the mistake of assuming that the "total asset" numbers identify the health of their business, however, this is wrong.
Perhaps the most crucial aspect for the accounting of a small business is the liabilities section of the balance sheet. What you owe, in the short and long term. Many entrepreneurs fail because they have focused more on the final result than on the reduction of liabilities.
With accurate accounting, we can see items that involve expenditures which are not necessary for the company. And backwards. We can see that dedicating more resources to a business would be beneficial to growth.
The Accounting department helps small businesses overcome audits without worries. Having adequate knowledge of business operations and transactions will help pass inspections,l or in other words make you more prepared.
Proper accounting helps ensure compliance with all tax obligations. Failure or late payment of taxes come with severe penalties.
It also helps to take VAT it into account. You cannot count on the money charged from VAT because you have to pay it back quarterly. The VAT is not an income. It is the tax in which the employer acts as an intermediary between the Treasury and the final consumer.
Banks are more confident in dealing with business owners who have adequate documentation about their company's finances. It is easier to negotiate loans to grow if the accounts are clear.
It also helps in the creation and fulfilment of budgets. A budget is essential to start an entrepreneurial project since there are details of the necessary expenses to start our business.
Expenses include payment to employees, purchases, and marketing. A budget helps small businesses avoid unnecessary costs.
A business that does not generate profits, regardless of income, is heading towards failure, as there is no benefit to them in the long run.
Accounting is an essential means to determine the profitability of small businesses. Accounting also helps to meet business objectives and goals, by monitoring budgets income and tax costs.
Successful entrepreneurs have recognized that the key to success has been to keep thoroughly detailed accounting from the beginning.
Although it can be difficult, here are some tips to make it a smoother ride:
Depending on the size of your agency and the number of weekly or monthly operations, if you organize yourself well and have the necessary tools, you can keep your finances in check thanks to new technologies. Remember that this will take time away from your working day. Still, with an appropriate billing application, you can keep your company's accounting without having to use the services of an accountant.
Although accounting is all about numbers in general, it is better to use a computer program used by other companies in your sector. Creative agency business models aren't the same as that of companies in the hospitality industry. That is why you must choose to fit the services and products you offer.
If you also work with the international market, you should check the legality of your exports and imports very well so as not to incur high fines. In this case, perhaps hiring an accountant with experience in this area would save you time and headaches.
Knowing what your expenses and income are will help you establish better relations with clients. For example, you can focus only on the most profitable clients using ROI figures. This data will also help you know what expenses can be reduced in a real way to generate more benefits or use that money in more profitable areas.
If you are going to request a loan or an investment for your agency, the bank or investor will probably like to take a look at your accounting to see if you have enough monthly income to guarantee your payments. Remember that if you need money for your business, you can take a look at your local aid for new companies or think about mortgaging some company-related assets.
If, for work reasons your employees have to travel, you need to demand all bills related to transportation, food or accommodation. These invoices must also appear in your accounting books. To quickly and efficiently track your invoices, it is worth using a billing program. These can save you a lot of time, give storage space for your invoices and useful reports and statistics.
If after a while you feel that this task exceeds you since you do not have enough time or do not have the necessary computer skills to keep the accounting, do not hesitate to ask someone for help. Perhaps you can start by offering someone competent in your company this responsibility. But if you don't want to burden your employees with additional tasks, it is probably best to trust a professional accountant.
The Accounting department is only about numbers, but so many figures can end the tolerance of any person; especially if the numbers don't add up. Remember that the more you get frustrated if something goes wrong, the longer it will take you to solve it. So try to be patient and use the necessary breaks to perform this task with the best possible attitude.
Which is a common problem in small businesses, and many times there is no clear division between the income earned a business and your payroll.
And may end up affecting the financial balance of your business. So it is best to open an exclusive bank account for the company's operations. That way, you will be able to track the inflows and outflows of money better, and more efficiently manage the funds generated by your business.
A vital aspect of a company's basic accounting is to have a routine to record all movements, expenses and income, in detail. But at the same time, you should know how to manage your costs very well and differentiate those that are unnecessary from those that are essential for the profitability of the business.
External contracting means more costs, consider what activities or tasks you need to outsource to increase productivity or save money. Do the same with the suppliers. Remember that you must monitor the costs and take the necessary measures to improve the profitability of your business.
The cash flow is a crucial concept of basic accounting that you must take into account, as it will be critical to the viability of your company. Cash flow reflects real cash outflows and receipts, indicating the liquidity of the business. And to keep an exhaustive control of your company's finances, it is essential to monitor inflows and outflows of resources.
Many entrepreneurs tend to be topologists, in the spirit of having all the details under control; they absorb many more tasks than they can handle efficiently. The case of taxes is no exception, as there are even those who decide to keep their business accounts on their own without asking for advice. In the case of a business, it will always be better to have the support of an accountant to maximize tax advantages, since they know what the minimum procedures to start working are.
One of the first temptations that many entrepreneurs face in our country is informality, which is a false door that you should avoid opening at all costs. If you start on these terms, returning to legality will become difficult. Informality will take you away from what it is to be an entrepreneur, just as it will close all doors to the development and real potential of your business. Worse, it could become a law issue.
First-time entrepreneurs do this very often. They end up with a financial disorder at the end of the year because they hardly realise exactly how lucrative or viable their business was, which complicates all of their accounting. That can lead you to deduct less and therefore pay more taxes. The main factor for which many people do not deduct correctly is due to lack of control and order in expenses. The easiest way to avoid this is by having separate checking and Whatever your venture, you should approach new technologies to be able to carry out your processes in less time. With an Electronic Billing system, you can Create an Electronic Invoice in less than a minute. It also works to keep track of the tax receipts that you have generated. A creative agency should pay their due taxes on time. The period for taxes for the financial year are always available, and as a public responsibility, an agency should be proactive about this course of action. If an agency fails to pay all obligated taxes within the deadline, then HMRC will impose penalties, and there will be interest charged until you pay the tax. That will incur unnecessary costs on your company's overheads and will lead to budget constraints. Moreover, a creative agency's primary source of revenue is the service budget provided by its clients for marketing, designing, production, etc. Many lucrative clients are particular about who they like to be associated. Some of the biggest companies want to stay out of trouble and courtroom rituals, which is why they would always prefer agencies which are clean in records. That means any creative agency must file their taxes on time or risk losing partnership of critical clients. The domains of tax and accounting are essential for a creative agency in the UK. Many market players succumb to failure and are driven out of the market after they failed to streamline their tax strategies and conducted improper business accounting. Also, if your books are clean and well kept, you will avoid a great deal of unnecessary trouble with HMRC and lead a good reputation in the whole business hub.4. Adopt new technologies for your company
5. Do not miss important deadlines
6. Pay your taxes or risk having a bad reputation
In conclusion
We're glad our customers are happy with our products and services. Here's what some of them said about us...
Pearl Accountants are unique as you can get. They have a great one to one service and they always answer your queries in a fast and professional manner.
I find Pearl when I opened up my limited company. I was clueless, but Pearl Accountants kindly assisted me in the best way so I felt at ease and understood how the operation works.
Everything was explained clearly in detail and I could ask as many questions as I wanted. They were never rude or impatient, just happy to be there to help.
The client had previously missed a few deadlines with HMRC and Companies House and needed a hands on approach
Wanted to ensure they have a proactive team so that no deadlines were missed and full end to end bookkeeping carried out
Client was introduced to a dedicated accountant who filed all outstanding accounts and appealed for any penalties by HMRC
After being in business for years, I must admit that Pearl Accountants are far the best accountants I have worked with. They are helpful, friendly and trust worthy and most of all provide excellent tax advice.
They provide high-level client care. I would certainly recommend Pearl Accountants to all.
Invoice factoring complications led client to inaccurate bookkeeping and unclear of clear reporting requirements
Processing the invoicing system accurately with clear and transparent management reporting was key
Processing the invoicing system accurately with clear and transparent management reporting was key
Pearl Accountants have been my accountants for many years and have been a great asset to my businesses. They have a strong team and knowledge is second to none. Very happy with the service and professionalism from them. Will continue to recommend them to my network.
Paying huge taxes without any tax efficiency and lack of understanding on various VAT aspects.
Minimise tax bills and ensure the business was compliant with HMRC and Companies House
As a startup graphic design company, we ensured the client used tax allowances and efficient payroll structures to withdraw money
Holborn based laser hair removal company joined us with a view to expanding their business on a large scale. They undertook accounting and advisory services which helped them grow above their rivals.
Holborn based laser hair removal company joined us with a view to expanding their business on a large scale. They undertook accounting and advisory services which helped them grow above their rivals.
Achieve a national presence and grow organically through current business model
We came on board and advised client on tailor made business strategies to achieve their online and brick and mortar presence.
We have been using Pearl Accountants for over 10 years and developed a very good business relationship. Very clear instructions with easy to follow accountancy system in place. Great expertise in tax efficiency, as well as business, grow and development services. One of the best-chartered accountants in town.
We have already recommended your services and will share our good experience with others in future.
It is always someone available on the phone but if not available at the time your accountant will always call you back.
Complete peace of mind with prompt and clear communication so no deadline missed.
Very satisfied.
Client was growing very fast with inability to keep track of growth with no cloud accounting setup and no integrations
Time saving on bookkeeping and clear vision of profitability management reports. Setup with cloud integrations.
Recommended a online cloud solution with time saving applications and clear breakdown of monthly profitability.
We recently migrated to Pearl Accountants from large national accounting firm. Transfer was easy and faultless. Friendly staff at Pearl lead us through the process with ease. Initially we were drawn to their service because of their attractive pricing structure. However it quickly became apparent to us that we were getting a lot more for our money than we initially thought as they are happy to stretch the engagement to all sorts of additional advice. Thumbs up to Pearl Accountants.
No clear strategy for business growth or tax planning reduction techniques
To achieve business advisory, tax planning and accurate reporting requirements
Recommended a online cloud solution with time saving applications and clear breakdown of monthly profitability.
Our client, a well established practising solicitor in the UK required a headache free service to ensure their accounting requirements were met and cloud accounting solution setup
Too much time was being consumed in bookkeeping and previous accountants missed various deadlines
More time was needed to focus on the business and ensure a firm came on board to take full ownership.
Advised client to forward us everything in ‘shoe box’ style and provided full breakdown regularly to keep informed.
They make me feel that I am a valued customer and to me what makes Pearl accountants unique is their helpful team of dedicated staff members. Their response is always prompt and it makes the daunting task of accounting really easy for me. Pearl Accountants is really a five-star accountant company.
As a franchisee tuition business, the client did not have the right advise to reduce taxes or a proactive accountant to advise where needed
Reduction in taxes through governmental tax subsidiaries and requiring more time to focus on the business.
A dedicated accountant was assigned to ensure deadlines were not missed and review of tax strategies.
Our client was in need of a specialist contractor accountant to remain compliant and ensure they did not fall in IR35.
Client required advisory on payroll and VAT solutions and filing of accounts at year end.
No clear direction on IR35 nor guidance on allowable expenses that could be claimed.
Ensure the contractor company was compliant with HMRC and Companies House and advisory on saving taxes.
Provided a full explanation and review on IR35 and guidance provided on which expenses could be claimed to reduce taxes
Our client having a property portfolio in Switzerland required a specialist accountant that understood the UK tax legislation whilst having a thorough understanding of overseas tax implications.
Overseas and UK income not declared, needed tax returns filed for previous years and appeal to HMRC for outstanding penalty
Paying taxes in the UK and overseas, wanted help understanding the tax system so avoid paying taxes twice.
Appealed successfully for prior years penalties and filed all outstanding returns. Thorough review of all tax allowances available.
Our client joined us after losing track of their finances and needed someone they could turn to for help. We came on board and reviewed their internal bookkeeping arrangements and recommended efficiency to lower their input on areas which could be outsourced to us.
No real track of profitability or clear vision of expenditure along with weak internal processes.
To achieve a clear breakdown of expenditure and ensure the current setup for bookkeeping was run more efficiently.
Recommendation on reporting packs, internal processes and online applications to integrate for payment reconciliation.