Explore the importance of keeping up-to-date books and records within your business
Our accountants in Worcester have been sharing with you some of the success we’ve had (and our clients too!) by working with our clients to support them and their businesses and today we’d thought we’d share another around the importance of having accurate books and records.
We began working with a client in the construction industry some time ago and his business had grown significantly from just him as a sole trader, to him engaging around 10/12 subcontractors per month.
Our client loves what he does for a living and doesn’t have any interest in the paperwork side of it. His records were a mess! Every quarter he would arrive at the office with a bag of invoices, bank statements etc and we would have to go through it all to prepare his VAT returns.
At the end of the year, he always wanted his accounts prepared early as he needed the refund he would receive from HMRC from all of the CIS he had had deducted, but he didn’t make sure he had the CIS certificates each month and some were missing. We knew he had had the CIS deducted based on his invoices and the amount he had received.
When his accounts were submitted, HMRC queried the amount of the refund as the amount of CIS he had had deducted didn’t match their records and as a consequence, we had to provide evidence of the invoices and the bank payments received. It was a nightmare and extremely time consuming! We also discovered that whilst he was having CIS deducted, not every contractor was reporting it to HMRC.
Our professional accountants explained to the client the importance of keeping good books and records and put together a process for them to follow. We put Xero into place for him and trained him on how to issue invoices; we set up Dext Prepare and showed him how to make sure that we received all of his purchase invoices and receipts and we told him that he was to insist upon CIS payment certificates from every contractor every time they paid him.
The result…we have a client who can focus on what he does best and doesn’t have to worry about when his VAT quarter ends, or his year end as it’s all taken care of. All of his subcontractors receive their CIS payment certificates every month as we email them directly to them. We submit his self assessment return and HMRC pay out without any questions as all of the records tie up!
We have an extremely happy client who knows that he can rely on his numbers, has no more worries about HMRC and knows that he can rely upon us to get everything sorted for him.
If you know someone who you feel could benefit from our bookkeeping services or any other accountancy support, or if you would like to learn more, please drop me an email email@example.com, or give me a call on 01905 828262