It’s that time of the year again, when your accountant knocks on your door but you pretend you aren’t in. That guilty feeling kicks in like those times when you forgot to do your homework at school. Unfortunately, the consequences of not having your books balanced and accounts up to date can be much worse than an hour detention.
Nobody enjoys doing the accounts, it can be easy to find an excuse to avoid them. Business owners everywhere promise to do the accounts each month but when it comes round to it there is something slightly less tedious which ‘needs’ to be done instead. Before you know it, what once was an easily manageable task now has a daunting back-log and it gets overwhelming.
Why Is It So Painful?
As a property manager you probably didn’t start your company to sit at your desk with financials, you wanted the exciting, glamourous parts of the business, winning clients, looking after your portfolio and tenants. Unfortunately you can’t have all the fun, without managing financials carefully your hard work can be struggling to keep afloat on a sinking ship. By doing it on a regular basis managing your accounts will make preparing for the year end easier as well as budgeting throughout the year can be done more accurately.
The End Goal and Everything In-between
Deadlines are approaching. Are you ready? Are you nervous? Don’t act surprised! It comes around every year and it’s essential that it is done correctly, for your businesses sake, your livelihood!
April 6th is, confusing the date when the financial year begins in the UK (compared to most countries which work January to December, but hey, we’re British, we like to be a little different…). It isn’t very far away.
What You Need To Do
Get your accounts up to date and send full statutory Annual Accounts to Company House, this might need to be audited if your company is large. These document, which should be created by your accountant will show you how much tax you need to pay for the year too. This will help with the next process, sending the Company Tax Return to HMRC and pay any owed Corporation Tax.
When Do These Need To Be Done
This is where it gets complicated, especially when you don’t keep on top of your accounts where filing historic transactions, details can get easily lost, misplaced or damaged.
Companies House don’t need your Annual Accounts until 9 months after your financial year ends, owed Corporation Tax doesn’t need to be paid until 9 months and 1 day after your financial year ends and the HMRC don’t need your Company Tax Return until 12 months after the year end.
If you are like the majority, you see that deadline and you make the most of it but leaving it to the last minute doesn’t benefit anybody.
How Can You Do This Without The Trauma
Leaving your workload to build up throughout the year will not only make it a lot more stressful, you will have the deadline for filing your Company Tax Return at the same time you will be snowed under with accounts, leaving you to struggle to find time to run your business. March tends to be a particularly busy period for property management following the post-Christmas lull, do you really want another addition to your workload?
By simply keeping on top of your accounts throughout the year, scheduling in time each month makes it more manageable and you won’t have the feeling of something coming back to haunt you every March. This is made a lot easier when using an accountancy software package such as Sage. The whole process will be simplified, including reconciliation, one of the major challenges if left until the deadline. Sage include a guide to preparing for the Year End with step-by-step processes and video tutorials to ensure you get the most from your accountant.
The Benefits Of Having Your Accounts Updated Throughout The Year
Being able to see the financial situation of your business is beneficial in numerous ways.
- Manage your business without having to worry about your cash flow
- Plan ahead and grow
- Budget your spending
- See what areas in your portfolio are most profitable and which are draining your resources
It also allows you to take advantage of claiming assets, claiming tax relief with the Annual Investment Allowance. This covers a wide range of stock including office equipment and computers. Selling assets to raise revenue can work better or worse for Capital Gains Tax when this is done before or after the Year End to make the most from your annual exemptions. This will depend on your financial situation which will only be clarified if accounts are up to date.
What Your Accountant Needs
Your accountant or bookkeeper will take your ‘books’ and prepare them in an end-of-year summary for Companies House. Accountants don’t come cheap so it is important that you use their time wisely.
Sage is the number one accounting solution in the UK, from launching in 1981 the Gateshead-based company have evolved with time and technology, allowing them to keep loyal clients as well as entice new ones. As Sage were early adaptors of developing software for businesses they have continued to be the go-to package despite cheaper and more user-friendly products available. Because they are the market leaders the majority (over 90%) of accountants use, or have used the software in the past which makes it more cost-effective if you can provide your books to your accountant in the Sage format so that they don’t need to speed time understanding other formats or your Excel sheets
Why Use An Accountant?
It isn’t easy, especially when it comes to tax and it is essential that it is done correctly, mistakes can be easily made for those who aren’t experts and errors can be costly. This is what accountants train for, it’s their profession so you can trust them rather than waste your own time stressing over something you don’t understand.
How Can This Be Adapted For Property Managers?
Managing properties is the same as any other business, the same rules apply and the same hurdles are there to be jumped over. To ensure that you do this correctly set some time aside each week/month to update your accounts, keep receipts for all your purchases and sales throughout the year, create a list (known as a ledgers) relating to each type of transaction. The legers can be used for profit and loss reports, budgeting and cash flow throughout the year as well as the Year End reports.
What About Using Property Management Software?
There are many property management software solutions available, they come in different shapes and sizes to suit different requirements but the majority of these packages focus on managing properties and tenants. Some of these are just solutions for managing properties, some come with built-in accounting engines which, when the data is exported, comes in a format unfamiliar with your accountant and others link with stand-alone packages.
Decorus for Sage
Decorus is a fully equipped high-end property management software solution with tools suitable for landlords and letting agents. The desktop-based package can be hosted in the cloud for user convenience whilst it streamlines the workload for businesses as administrative tasks are minimised. What makes Decorus stand out from the other software packages is its integration with Sage. This true 2-way feature takes financial information entered into Decorus feed through to Sage in real-time and vice-versa, cutting out a lot of the manual work, allowing profit and loss reports to be generated instantly, invoices can be created with ease and your books will be in the Sage format so your accountant won’t have trouble understanding them.
Are You Interested In Property Management Software That Looks After Your Financials And Your Portfolio?
Request more information today so that you won’t find yourself stressing of your Year End reports again!