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Preparing for your accountant

Thank you for allow­ing us, at Rus­sell & Rus­sell, to pro­vide you with a ser­vice in the Lanark­shire area. Whether we are pro­duc­ing your accounts or car­ry­ing out tax com­pli­ance work, being pre­pared for us will ensure our work is car­ried out smooth­ly and effi­cient­ly and with the min­i­mum dis­rup­tion to your­selves.

You may also be able to help by prepar­ing some of the rou­tine sched­ules for us. This will mean our time can be bet­ter spent advis­ing you on the run­ning of your busi­ness.

Below we high­light some of the ways in which you can pre­pare.

It is how­ev­er impor­tant for you to dis­cuss these ideas with us since all of the sug­ges­tions may not be applic­a­ble in every case.

Setting the scene

Keeping us informed

We will be bet­ter pre­pared if we know of any changes in your busi­ness that could affect our work. These could include changes to:

  • prod­uct or mar­ket
  • busi­ness strat­e­gy (e.g. pric­ing pol­i­cy)
  • book­keep­ing sys­tem
  • key per­son­nel.

If you main­tain min­utes of any man­age­ment meet­ings that you hold pro­vid­ing us with copies of these can be a very help­ful way for us to gain an under­stand­ing of the key events that you have faced over the course of the year.

Also, as part of our work it is like­ly that we will ask you whether there have been any instances of non-com­pli­ance with the legal and reg­u­la­to­ry frame­work in which your busi­ness oper­ates, includ­ing whether there has been any fraud­u­lent activ­i­ty that you are aware of. This rep­re­sents part of our oblig­a­tions that we are required to per­form as your pro­fes­sion­al advis­er and is not meant to imply that we believe that you may have com­mit­ted any wrong­do­ing.

What we need

If you know what infor­ma­tion we need to be able to com­plete our work you can make sure it is avail­able.

We can decide togeth­er what you can pre­pare for us and what we will need to pre­pare for our­selves.

Bet­ter com­mu­ni­ca­tion between us will help to min­imise mis­un­der­stand­ings and avoid unnec­es­sary work.

Timetable

We need to agree a suit­able timetable in advance. This gives us both a chance to be prop­er­ly pre­pared.

How­ev­er, if you find your­self behind sched­ule, let us know as soon as pos­si­ble so that the timetable can be rearranged if nec­es­sary.

How you can help

Books and records

Set­ting up and main­tain­ing your books in an organ­ised man­ner will help us to extract quick­ly and eas­i­ly the infor­ma­tion need­ed to pre­pare or audit your accounts. It will also enable you to see at a glance the state of your busi­ness.

Con­sid­er­a­tion of the fol­low­ing points may improve the organ­i­sa­tion of your records:

  • totalling and bal­anc­ing your books at reg­u­lar inter­vals will help you spot and cor­rect any mis­takes
  • analysing your pay­ments and receipts so that infor­ma­tion can be eas­i­ly extract­ed
  • fil­ing your invoic­es in a log­i­cal order (numer­i­cal, alpha­bet­i­cal or date) to make it easy to find any one of them.

Procedures

By estab­lish­ing and main­tain­ing cer­tain pro­ce­dures you will be able to keep a bet­ter con­trol over your records and your busi­ness. It will also mean we can cut down on the work we need to do which may save you some mon­ey.

We can help you set up these pro­ce­dures ini­tial­ly and, once estab­lished, you will be able to car­ry them out your­self. These pro­ce­dures will include con­trol accounts, rec­on­cil­i­a­tions and stock­tak­ing.

Control accounts

Con­trol accounts record the move­ments of cash, debtors and cred­i­tors by using the month­ly totals from your cash book and sales and pur­chas­es sum­maries.

The cash con­trol account will show how much cash the busi­ness has at the end of each month.

The debtors or sales ledger con­trol account will show how much your cus­tomers owe you at the end of each month.

The cred­i­tors or pur­chase ledger con­trol account will show how much you owe your sup­pli­ers at the end of each month.

Reconciliations

Rec­on­cil­i­a­tions help to ensure that the fig­ures in your books are com­plete and accu­rate. There­fore if pro­duced on a reg­u­lar basis, they will help you spot any errors which can then be cor­rect­ed before we exam­ine your records. Some of the records which will need rec­on­cil­ing are:

  • bank accounts
  • con­trol accounts
  • sup­pli­ers’ state­ments.

Stocktake

If your busi­ness car­ries any stock, you will need to count it at least once a year. To ensure that the count is car­ried out effi­cient­ly and accu­rate­ly you should con­sid­er the fol­low­ing points:

  • stock items should be stored neat­ly and log­i­cal­ly to make count­ing eas­i­er
  • all staff involved in count­ing should be giv­en clear instruc­tions
  • try to min­imise the move­ment of stock dur­ing the count. If pos­si­ble, deliv­er­ies in and out should be with­held until the count­ing has fin­ished
  • spot checks should be per­formed dur­ing the count.

If you hold large amounts of stock, we may need to attend the stock­take and per­form our own checks.

Schedules

There are a num­ber of sched­ules which have to be pro­duced in order that the accounts can be pre­pared and/or audit­ed. We can pre­pare all of these sched­ules our­selves but, obvi­ous­ly, if you were to pro­duce them it would save time and mon­ey.

You may wish to con­sid­er the prepa­ra­tion of some of the fol­low­ing sched­ules:

  • a detailed list of addi­tions and dis­pos­als of fixed assets with a copy of the appro­pri­ate sales and pur­chase invoic­es attached
  • sched­ules show­ing each item of stock held, the quan­ti­ty, unit val­ue and total val­ue — indi­cate any stock items which are old or dam­aged
  • a list of your debtors at the year end includ­ing how much they owe you and how long they have been out­stand­ing — indi­cate any which are unlike­ly to pay you
  • a sched­ule of all bank and cash bal­ances at the year end, togeth­er with all the bank state­ments for each bank account
  • a list of cred­i­tors, which should include HMRC as well as the usu­al busi­ness sup­pli­ers.
  • sup­port­ing work­ings for dis­clo­sures that need to be includ­ed in your accounts, such as aver­age employ­ee num­bers, oper­at­ing lease com­mit­ments or direc­tors’ remu­ner­a­tion (required for com­pa­nies only).

Not all of these sched­ules will be applic­a­ble to your busi­ness and, there­fore, before doing any­thing you may wish to dis­cuss this with us.

Other issues

Oth­er issues that need to be con­sid­ered include:

Narrative reports

Larg­er busi­ness­es may be required to include some form of nar­ra­tive report­ing that accom­pa­nies the accounts such as a strate­gic report. This is your oppor­tu­ni­ty to pro­vide addi­tion­al infor­ma­tion that can sup­port the users of your accounts’ under­stand­ing of your busi­ness and its per­for­mance. If this is the case, we will dis­cuss these require­ments with you so that you can pro­duce the word­ing of any nec­es­sary reports.

Future plans

As part of the accounts pro­duc­tion process you are required to con­sid­er the busi­ness’ going con­cern posi­tion to ensure that you are con­fi­dent that it will have suf­fi­cient resources to remain in busi­ness for a min­i­mum peri­od of 12 months from the date that the accounts are approved. In addi­tion, you are also required to con­sid­er whether there is any evi­dence that the val­ue of your assets has been impaired, for exam­ple as a result of obso­les­cence caused by changes in the mar­ket or tech­no­log­i­cal devel­op­ments.

If there is any uncer­tain­ty regard­ing the busi­ness’ future per­for­mance, we may ask you to pro­vide evi­dence in sup­port of your going con­cern assess­ment. This could include fore­cast results and cash flow pro­jec­tions, sales orders received or details of new sources of fund­ing. Pro­vid­ing these at the ear­li­est oppor­tu­ni­ty will ensure that our work can be com­plet­ed as quick­ly and effi­cient­ly as pos­si­ble.

How we can help

There are undoubt­ed­ly many advan­tages to be gained if you are bet­ter pre­pared before we com­mence our work.

We will be able to com­plete our work in less time. This will mean less dis­rup­tion to you and your staff. In addi­tion, we will be bet­ter placed to pro­vide you with use­ful and con­struc­tive advice regard­ing the devel­op­ment of your busi­ness.

How­ev­er, per­haps the most reward­ing of all these advan­tages will be the fact that your books and records will pro­vide you with more use­ful infor­ma­tion which will help you to make bet­ter informed busi­ness deci­sions.

If your busi­ness is in the Lanark­shire area and you would like to dis­cuss these pro­ce­dures any fur­ther or would like us to pro­vide fur­ther assis­tance with your month­ly or quar­ter­ly accounts, please con­tact us at Rus­sell & Rus­sell.