General Business and Finance Blog

If you are in a small business then very often you may be requiring funds to meet various expenses. Keeping in view of growing needs of an upcoming business, the lenders have Small Business Finance for your specific requirements. However, before you apply for the loan, ensure that you are well prepared for borrowing funds in a beneficial way. You must first of all be precise on the purpose of the loan. This is essential as the lender will like to know about it along with all the details of your business.

You must take extensive financial history of your business to the lender. This should be done keeping the main aim of providing all the information which a lender may require for taking a timely decision on the loan. Go to the lender with a business plan that includes three years of financial statements. This will help the lender in assessing your repaying ability.

It is advisable that before approaching a lender for small business finance, you must check your credit rating. Take the copy of your credit report and ensure that it is free of any errors as any misrepresentation of your payment facts, may have wrong impression on the lender.

Then decide whether you need finance for long or shorter term. If you require greater funds then the lender will ask for collateral that consists of any residential or commercial property. Such a secured loan has the advantage of lower interest rate also. In case you need smaller finance for day to day running of the business, then the lenders should be asked for unsecured loans which come without collateral clause. Interest rate however will be higher and repayment duration shorter.

Business people with bad credit history should first make efforts to improve credit rating. But even if they have multiple problems like arrears, defaults, late payments, CCJs etc, still finding a lender is not difficult if your business has the capability to repay the loan in timely manner.

There are many online lenders in the field of small business finance. These lenders have competitive rate offers. Take their rate quotes for finding out a suitable deal for your business.

Ok so you’re either thinking about starting your own business or have already got it up and running and have managed for a while to get by managing your own books by yourself and are now finding all too much to keep on top of the paperwork.

It is an all too familiar position; most people have found that they keep telling themselves that they do it tomorrow or later or at the end of the week, and before you know it your deadline is upon you and your all stressed out to get it in on time, It’s time to get help!

Affordable professional help

Being a small and/or at home business owner are you tired of the lack of affordable professional help available?  So you need to find professional help whom are able to offer such things such as:

· Free and up to date accounting advice

· Realistic solutions to card payments and cash flow issues,

· A good supply of Bookkeeping/Accounting forms for the small business readily available

· Advice with managing online card merchant accounts.

· What sort of Accounting software is suitable to your type of business

· Tools & Resources helpful to your Business, those that are current and up to date, to know today, what others will find out tomorrow.

· Where you can access free spreadsheet bookkeeping templates

· Who run forums where Like Minded people, like you, can discuss online business issues that are not just financial issues?

· That have links to other useful sites

· Where you can also advertise your own business.

· The ability to Use the latest of modern technology to effectively manage your accounts from the other side of the country without massive Technical costs to your or themselves.

Certified And Accredited

Bookkeepers:

It is important that you find a bookkeeper that is certified and accredited Accounting technicians. There are many governing bodies but the two most, well known governing bodies are:

1. The AAT (association of accounting Technicians) 

o The Association of Accounting Technicians, or AAT, is an accountancy organisation with over 108,000 members worldwide. The AAT is a technician level qualification which entitles those who have completed the exams and obtained relevant supervised work experience to call themselves associate accounting technicians. The AAT is based in London but there are branches all over the UK and the rest of the world.

The body is sponsored by four of the UK chartered accountancy bodies. These are:

· The Chartered Institute of Management Accountants (CIMA);

· The Institute of Chartered Accountants in England and Wales (ICAEW);

· The Institute of Chartered Accountants of Scotland (ICAS); and

· The Chartered Institute of Public Finance and Accountancy (CIPFA).

· The one UK chartered accountancy body which does not sponsor the AAT is the Association of Chartered Certified Accountants (ACCA). This organisation used to be a sponsor of the AAT but broke away in order to form a rival body which offers the Certified Accounting Technician (CAT) qualification. The ACCA implemented this policy as it wanted a technician level qualification which followed the same business model which it did, ie. one with a global presence.

· Whilst the AAT is recognised as a professional qualification by the Department of Trade and Industry in the UK, the accountancy professions there, the USA and existing and former British Commonwealth countries, CAT is not. CAT is a professional academic qualification within the ACCA examination structure. AAT is both a recognised academic and vocational qualification in its own right.

2. The ICB (Institute of Certified bookkeepers)



The Institute of Certified Bookkeepers (“ICB”) is a not for profit organisation that promotes and maintains the standards of bookkeeping as a profession, through the establishment of a series of relevant qualifications and the award of grades of membership that recognise academic attainment, working experience and competence.

Started in the United Kingdom in 1996 the ICB has grown rapidly and now has a world wide presence in over 50 countries.

· to promote bookkeeping as a profession

· to enable bookkeeping to gain recognition as an integral part of the financial profession

· to promote training in the principles of bookkeeping

· to develop personal study skills and improve confidence of those persons who undertake a course in bookkeeping

· to enable the achievement of a qualification, which may be used to enhance prospects for progression into higher levels of study

· to improve the career prospects of its members

The ICB is the largest bookkeeping body in the world, with over 150,000 members and students. By offering career advice and support to bookkeepers the ICB has helped many throughout the world set up a successful practice.

You cannot buy your way into any of these associations, like most trade governing bodies, but have to take stringent examinations and also to keep memberships you must also keep up your CPD (Continual Professional Development), and also have current professional and Indemnity Insurances.

A professional Bookkeeper should be able to answer most of your day to day financial questions, before you need to start thinking about a Chartered Accountant, which is when the price will jump up dramatically. They should be able to process personal tax returns and give you basic help with corporation tax calculations.

In most cases a Bookkeeper should, if unable to answer your questions, then know exactly where to find the answer or to put you in touch with the right person.

Accountants:

Now be careful here as there are many people out there that can call themselves an accountant, but what you are really looking for is a chartered accountant. There is often some misconception as to the type of accountant needed, or indeed that there are more than one type and below are just two of the main types of Chartered accountants there are:

1. The Association of Chartered Certified Accountants (ACCA) is a British chartered accountancy body with a global presence that offers the Chartered Certified Accountant (Designatory letters ACCA or FCCA) qualification worldwide. Since Chartered Certified Accountant is a legally protected term, individuals who describe themselves as Chartered Certified Accountants must be members of ACCA and, if they carry out public practice engagements, must comply with additional regulations such as holding a practising certificate, being insured against any possible liability claims and submitting to inspections.

2. The Chartered Institute of Management Accountants (CIMA) is a UK based professional body offering training and qualification in management accountancy and related subjects, focused on accounting for business; together with ongoing support for members. CIMA has two grades of full membership:

o Associate – designated by the letters ACMA

o Fellow – designated by the letters FCMA

To be admitted as an associate a candidate must have:

o completed a period of qualifying practice of at least three years, documented and signed by appropriate witnesses

o passed the institute’s 15 qualifying examinations

o Been proposed and seconded for membership by two individuals who have direct experience of the candidate’s work experience but who do not need to be members of CIMA or even accountants.

To become a Fellow a candidate ACMA must, in addition, have appropriate experience at a senior level.

Summary

It is very important when you look at any of these professionals to view their portfolio and testimonials to see what experience they have in what industries. For example a bookkeeper or an Accountant may have worked primarily for manufacturing companies and yours is an online business. Although they will understand the principles, it will take them a lot longer to understand your business and also may not have the contacts and resources easily available to hand that is relevant to your business.

So before you go head long into picking that all important Professional help, take the time to interview & research them just like you would with an employee or a supplier and ask for some testimonials from their current customers that are of a similar industry to yourself. Try to get it right 1st time. But don’t worry if you don’t, because you can always change!

Author: Monique Davis MICB CB Cert. MAAT & CIMA Student

Website: http://www.davisbusinesspro.co.uk Helping Your Business Grow!

Accounting software can vary from multi million pound solutions for major public companies to simple managed lists of income and expenses. Simple accounting solutions are most suitable for small business.

The most comprehensive financial accounting packages incorporate financial reporting information and managed by teams of qualified accountants supported by accounts clerks, bookkeepers and substantial input from automated data sources. At the other end of the scale a self employed sole trader might use accounting software themselves and produce a set of financial accounts for the year in an afternoon.

Different accounting standards are required from accounting software dependent upon the fitness for purpose and client needs. Double entry bookkeeping automated through a database system and probably arranged in financial modules would normally be the choice of the majority of public companies. Single entry bookkeeping would not be an acceptable accounting solution for a limited company due to audit requirements and statutory obligations.

Single entry bookkeeping does however have its place in the market place for the smaller less complex businesses who maintain financial control through a close intimate knowledge of every financial transaction. The main objective of a sole trader is more likely to be the production of the tax accounts and complete the periodic and annual tax return forms.

The most sophisticated level of accounting software in the largest companies mirrors the accounting functions in those organisations with various financial modules for accounts receivable, accounts payable, stock control, general ledger and fixed assets. These accounting modules may also be integrated with non accounting functions such as production and dispatch functions and also divided into separate modules within the accounting function.

In larger companies the sales daybook and data entry of sales turnover would often be the responsibility of one department while the accounts receivable function might be split with a specialist credit control function within that accounting module. A further division may also include sales administration and customer records. Accounts payable would normally be multi functional of the purchasing department, purchase invoice accounts department and a legal function for overdue payments.

Accounting software for smaller companies and organisations is commonly a system of data entry of prime transactions which include sales income, purchase expenses and cash and bank transactions. The prime entry of these documents being to a database which automates the double entry accounting principles and produces both accounts receivable, accounts payable and general ledger databases.

Some accounting knowledge is usually required tom operate a database accounting software system and that financial knowledge is usually available within the company as most companies that use database accounting software also employ a bookkeeper or accounts clerks to input data and in slightly larger small companies also qualified accountants to manage the accounting function.

The need for accounting knowledge in a database system is partially to understand the data entry principles and the relevancy of the rules that need to be followed but essentially understanding of accounting principles is required to understand what is happening ton the information after input. And most important, a qualified accountant has the financial knowledge, training and experience to know what the system should be producing and how to query the database to retrieve that information.

A database accounting software system not only produces high quality financial records but offfers numerous financial control alternatives for both junior and senior business management. The accounting function also has the security of producing trial balances, periodic profit and loss accounts, balance sheets and other financial and statements for tax and control purposes.

Accounting solutions requiring little bookkeeping or accounting knowledge are available usually based uponh spreadsheets as this is the most transparent method of viewing the accounts.

Small limited companies must obtain accounting software based upon double entry accounting principles as in addition to producing a profit and loss account and a trial balance to demonstrate accuracy and integrity of the financial records plus a balance sheet is required for reporting purposes. Accounting standards require the limited company to have a system of financial control and accounting software is an essential tool in achieving this.

Some accounting knowledge either from the management or outsourcing the bookkeeping services is usually required with even the simplest database accounting solutions eve3n if this requires the understanding of what accounts receivable ledgers, accounts payable ledger and control accounts mean.

There are other possibilities and those businesses with a minimum of accounting knowledge can consider spreadsheet based accounting software. Accounting software compiled from spreadsheets is less flexible and often does not have the range of options a database system has due to the lack of database queries available. These disadvantages of flexibility being compensated by the fact that all entries are visible, transparent and changes can be made more easily.

Financially at the sole trader and self employed end of the business spectrum then the requirements from accounting software may be completely different. Gone are the sophistications of control accounts, trial balances and many aspects of financial control. The most important aspect of self employed accounting software is often to produce a set of accounts for tax purposes.

Self employed small business that do not require a balance sheet can use accounting software based upon single entry bookkeeping rather than double entry and with the reduced requirement for financial control then less financial queries to the system are required. In these respects the simpler an accounting solution the better and in this market an accounting solution written on spreadsheets that can produce the net taxable profit would meet the requirements.