They contain key financial information about a business to show its performance.

Whilst these are not mandatory, using Management Accounts can allow for better-informed decision-making and closer monitoring of progress towards goals and targets.

What should a Management Account include?

For many businesses, Management Accounts will include the same things. However, depending on the size and complexity of your company, they can be customised to include the information that you need.

In general, Management Accounts should include:

• Profit and loss report detailing your company’s revenue, costs, and profits
• Balance sheet showing your company’s assets, liabilities, and equity
• Cashflow statement and forecast showing your company’s cashflow throughout the accounting period
• Key performance indicators (KPIs) measuring your company’s performance, including sales growth, profitability, and feedback
• Budget comparison that highlights your company’s performance against its budget
• Analysis and commentary that sums up the above information and highlights any trends and issues that need addressing.

Who are Management Accounts for?

There are no specific recipients for your Management Accounts. They are designed to be seen by those who need financial information about your business, but this will vary depending on the size and structure of your business.

In short, Management Accounts can be seen by anyone who has a stake or interest in the finances of your business. This includes but is not limited to:

• Owners
• Shareholders
• Board members
• Senior management
• Accountants
• Tax advisors
• Investors

These people will then be able to make decisions based on the information that they are presented with.

Why are Management Accounts so important?

Regularly collating and analysing financial data in these reports is an excellent tool for ensuring the right decisions are being made for your business.

Without Management Accounts, issues and trends within your company may go unnoticed for long periods. This could lead to a lack of growth and poor decision-making.

Having up-to-date and correct information on hand can help promote the growth of your business. Good, data-driven decisions can help skyrocket your business above your competitors.

Preparing Management Accounts

When it comes to preparing Management Accounts, having an accountant on hand can help you to simplify the process.

They can help you to gather the relevant information and help you to prepare your:

• Balance sheet
• Profit and loss report
• A cashflow statement
• An analysis of financial data

From here, you can take your Management Accounts to the relevant parties and relay the information.

An accountant will also be able to offer practical business advice and support, identifying your market trends and influencing key decisions.

Get in touch today to find out how we can help you prepare Management Accounts.

The post Why your business should be using Management Accounts appeared first on Grunberg & Co.

The adjusted net income threshold at which child benefit will begin to be withdrawn has been increased from £50,000 to £60,000.

The new threshold will come into effect from 6 April this year.

But how will this impact you?

Understand the ins and outs of the new threshold to ensure you remain compliant and receive the benefits you are entitled to.

The changes

The threshold has risen for the first time since 2013, meaning half a million families will receive more child benefit than they do now.

Child benefit is currently paid at £24 per week for one child but this will rise to £25.60 in April.

For each additional child, child benefit is paid at £15.90 per week however this will also rise to £16.95 from next month.

The rate of taper has also been halved in comparison with where it is now.

A benefit has previously been withdrawn on a tapered basis where an income band is between £50,000 and £60,000.

Under the new measure from Jeremy Hunt, this action will now only occur between £60,000 and £80,000.

If you are an individual with an income over £80,000, the tax charge will equal the amount of your child benefit payment.

For example, if you have an income between £60,000 and £80,000, then the rate at which HIBC is charged will be halved and will equal one per cent for every £200 of income that is more than £60,000.

What will this mean for you in the long-term?

Under the new rules, child benefit is withdrawn when one parent has an adjusted net income of £60,000 or more a year.

Adjusted net income relates to an individual’s total taxable income before any personal allowances and less certain tax reliefs.

These include pension contributions or trading losses (if you are self-employed).

For example, if you and your significant other earn £59,000 a year then you will receive the benefit in full despite earning a joint £108,000 – child benefit, however, is withdrawn when one parent earns over £60,000 even if the overall household earn is less.

It has been referred to as a ‘tax on children’ and previously resulted in many parents repaying some or all of the benefit.

But, under the new measure, 170,000 families will now avoid paying back any benefit in the 2024-25 year.

The Government estimates 485,000 families will gain an average of £1,260 in child benefit – and you could be one of them.

If you have two children, you might gain up to £2,212 a year so it is important you understand how the changes affect you and what you need to do to receive the new financial benefits.

Is there anything you need to do?

Overall, you need to be aware of and understand how to use HICBC as this is a policy that still impacts your tax if not correctly followed.

Complexities might still arise if your adjustable next income fluctuates or if your family circumstances change.

The changes that take place from 6 April should not affect how individuals who receive child benefit payments engage with HMRC.

If you have an income higher than the new HICBC threshold when it comes into effect, then you will continue to be required to complete a Self-Assessment tax return to pay HICBC.

You should know that new claims to child benefit will automatically be backdated by three months, or to your child’s date of birth (whichever is later).

For any claims made after 6 April this year, backdated payments will be treated for HICBC purposes as if the entitlement fell in the 2024-25 tax year.

This happens if the backdating would otherwise create a HICBC liability in the 2023-24 tax year.

The changes to HICBC can be tricky to navigate so you need to know the ins and outs of the new changes as well as seeking the advice of our expert accountants to ensure you remain compliant with your tax obligations and know how you might be affected.

If you would like to know how the new High Income Child Benefit Charge might impact you, please contact us today.

The post How will the new High Income Child Benefit Charge affect you? appeared first on Grunberg & Co.

Having an accountant on hand offers more than just someone to manage your taxes.

By having an expert on board to plan and monitor your finances, your start-up’s chance of success increases dramatically.

Expert advice

No matter how much research you have conducted before starting your business, there will always be holes in your planning.

An accountant can offer a critical eye to identify any pitfalls in your business plans.

You will also receive guidance on investment and growth decisions, such as where you can source funding and resource management.

Budgeting

Whilst it may sound simple, budgeting for your start-up takes careful consideration.

You must consider all your expenses. Depending on your business, these could include:

• Employing staff
• Marketing
• Materials
• Purchasing or upgrading equipment
• Rent and utilities

An accountant can help you identify which expenses are essential, and allocate a weekly, monthly, or quarterly budget.

Budgets can be difficult to stick to, particularly if you have set your own. However, when you have the aid of an accountant, you can rely on them to keep track of your business accounts and identify areas in which you could be reducing spending.

Saving you time

Time is precious, especially if you run a business.

Tasks such as managing your accounts, following your tax obligations, and managing your bookkeeping can be longwinded, time-consuming, and tedious.

Outsourcing these tasks to an accountant can buy you valuable time to invest back into your business.

Moreover, your accountant can ensure that everything is done correctly from the beginning, so you don’t have to waste time changing how you run your business.

Improved cash flow management

Cash flow management is a top priority for many business owners.

Even if your business is successful overall, with poor cash flow management you could find yourself in a financial predicament.

An accountant can analyse your business to help predict patterns of increased expenses and decreased profits. With this data, they will be able to ensure that your business always has enough money to cover all its expenses.

Ensured compliance

Being compliant is a vital aspect of a successful business.

Staying on top of your tax obligations, payroll, and expenses can be tough.

An accountant can help manage these for you. From keeping your accounts and financial data updated to staying on top of deadlines, your accountant can ensure that your business has nothing to worry about.

Hiring an accountant

It is best to get in contact with an accountant as soon as you set out on your business venture.

However, an accountant can come on board at any point in your start-up journey to provide advice and help with compliance.

If you would like to find out how an accountant can help your start-up, get in touch with our team today.

The post Starting a business – why your start-up needs an accountant appeared first on Grunberg & Co.

However, often their plans fail to consider the financial aspects of running a business – things we deal with daily.

Yes, a business plan is a roadmap for your business’s future, and it’s crucial for both planning and attracting investment, but to be properly effective it must consider the potential impact of tax.

Things like Income Tax, Corporation Tax, cash flow projections, debt, liabilities, funding, and investments are often ignored, but they should be included in your plans if you wish to succeed.

Tax planning

Effective tax planning is essential for any business if you want it to survive more than a year.

Understanding and planning for taxes like Inheritance Tax and Capital Gains Tax can significantly impact your profitability so if you fail to prepare for these liabilities, you are effectively operating blind.

You should at least know which taxes apply to your business and how to manage them properly.

In these issues, professional advice from an experienced accountant is your best bet for managing tax well.

Cash flow management

You might have already learned that cash flow is the lifeblood of any business.

In its simplest form, it’s a measure of the money coming in and out of your accounts.

By accurately forecasting your cash flow you can predict the best times to save and the best times to invest which goes a long way to maintaining a healthy balance.

It also ensures that you can meet your financial obligations while simultaneously growing your business.

Budgeting and financial projections

Budgeting is about making educated guesses on future income and expenses.

It’s a balancing act – overestimate your income, and you could run out of cash.

Underestimate your expenses, and you might face unexpected debts.

Financial projections are your business’s financial future on paper, vital for long-term planning and should be discussed at length with your accountant.

Funding and investment

Securing funding is a major hurdle for many start-ups.

Presenting a sound financial plan to potential investors is key but few will be willing to invest if it fails to represent your financial situation accurately and comprehensively.

To get funding, you’ll need to understand the different options and tailor your approach depending on which one is best for you.

But how do you know which funding option is best for you?

The first thing we would advise is to have an honest and open discussion of your finances with your accountant.

Please don’t hesitate to reach out to one of our team. We are excited to hear about your business plans and help you achieve your financial goals.

The post Ready to write your financial business plan for this year? appeared first on Grunberg & Co.

With the help of an accountant, you can accurately plan your business’s budget, ensuring that your finances are always in line.

So, how is it done?

Predict your expenses

The first stage of budgeting is collating all your predicted monthly business expenses.

This can be broken down into three parts:

• Fixed costs that stay the same each month, such as rent payments, certain bills, staff wages etc.
• Variable costs that change, including utility bills and supplies
• One-off expenses such as replacing broken equipment

By predicting your expenses, you begin to build a picture of your monthly outgoings.

Estimate your income

To balance your outgoings, it is time to figure out your income. This allows you to predict if you will be able to cover your expenses.

If you are an existing business, you can use previous data to help predict what your profits may be in the coming months. An accountant can help you to do this if you are unsure.

The process can be more complex if you are a new business.

It can be tempting to overestimate your profits, but this can set you up for failure. It is best to be conservative with your estimates, ensuring that you don’t spend more than you earn.

If you are unsure about this process, it is best to consult with an expert.

Predict your profit

From the above, you should be able to work out what your profits will be. The easiest way to do this is to take the expenses out of the income, to see what you have left.

If you are operating at a loss, it may be time to reevaluate your business plan.

You will need to either find a way to increase your income or decrease your outgoings by cutting expenses. If there are no clear ways to do this, it is best to get an accountant on board.

Whilst hiring an accountant may seem like an extra expense, they are trained to help find holes in your budgeting and business plan.

They will be able to help figure out where costs can be cut and direct you towards ways to increase your income.

If you would like help with your business budgeting, get in touch today.

The post Budgeting for small businesses – how to plan your financial success appeared first on Grunberg & Co.