Your business will have various running costs and some of these can be deducted from your taxable profit as long as they are allowable expenses. You will be responsible for charging the right amount of VAT, paying VAT due to HMRC, submitting returns and keeping VAT records and a VAT account. You’ll also need to register your business with HMRC is your VAT taxable turnover is more than £85,000. Legal compliance is key so that your business stays compliant with relevant financial laws. Evasion of tax is illegal and there are tough penalties so you will need your tax department to make sure laws are complied with. Funds need to be available to pay HMRC at the right time. All decisions made by your business will have tax implications which will need to be identified and incorporated into financial planning and decision-making processes. If you have a large company, you will need a taxation department. Your accounts department will prepare end of year financial statements and reports to include balance sheet, income statement and cash flow. This allows companies to make more informed business decisions, forecasts and prepare budgets. Systematic records must be kept of your company’s financial transactions and here accounting software is used which could include QuickBooks, Xero, Sage or other customised systems.įinancial information is collected in order to prepare accurate financial statements and reports. This means that someone else will be chasing those outstanding invoices. Nobody really likes asking for money so you need an accounts department that will set up a smooth credit control process. Monies coming in are essential for a healthy cash flow, but getting your customers and clients to pay on time is a challenge. Our recent article about using a payroll specialist will give a lot more information on this topic. Another key function is recording employees’ time off from work, holidays and sick pay. It will include commissions, bonuses and benefits that are due to them. This will ensure your employees are paid accurately and on time. It is often referred to as ‘balancing the books’. This is key to calculate the profit or loss your company is making and should trigger opportunities to improve on the situation. Credit Control – to include cash flow and use of accounting softwareĪccounts Payable (AP) are payments to outside partners for goods or services whereas Accounts receivable track monies coming into your business for goods and services from clients and customers.Payroll – to include bonuses, benefits, sick leave and time off.Accounts Payable and Accounts Receivable.What does an accounts department deal with? The department in a company or organisation that prepares its financial information. The head of the accounting department often has the title of controller.Īccounting and Bookkeeping – the section of a company that deals with the accounts. Part of a company’s administration that is responsible for preparing the financial statements, maintaining the general ledger, paying bills, billing customers, payroll, cost accounting, financial analysis, and more. We also discuss why using Team 4 Solutions could be the perfect answer for small business accounting and bookkeeping. Our latest article looks at the definition of an accounts department and what it deals with. However, all of the elements that an accounts department handles could be applicable in a smaller way. When you set up in business, you may find that initially you do not require a whole department. It’s impossible for a large business to operate efficiently and more importantly profitably without one being in place. In fact, all financial aspects of your business. These include accounts payable and receivable, inventory, managing payroll, data input and credit control. It can be internal or external and is responsible for a wide range of things. An accounts department, sometimes referred to as the finance department provides accounting services and financial support to specific businesses.
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