Q. What is accounts receivable?

A. The balance (amount) of money due to a business for goods or services provided or used, but not yet paid for by customers; is known as Accounts Receivable.

A nice, easy question on this week’s Ask the Accountant.

Q. What is accounts payable?

A. It’s an accounting term that means a company’s obligation to pay off its short term debts to suppliers and/or creditors.

In very basic terms, it’s what your business owes out within a specified period.

You may hear the term ‘accounts payable’ also used to refer to a department within a business. This is the team that takes care of making payments owed by the business to its creditors and suppliers.

This week’s Ask the Accountant question is,

“How did you become a Chartered Accountant?”

It all began when Chris left school at 16; his mum agreed he could have 6 months off, then it was time to get a job (other than his paper round!).

The Job Centre signed Chris up on to a Youth Training Scheme (also known as YTS) and placed him to work in Quarrier’s finance office.

It turned out that Chris was rather good at finance. A successful YTS story, he stayed at the charity for 10 years; during which time he decided he’d like to be an accountant.

He knew that university wasn’t for him, so he undertook the Association of Chartered Certified Accountants (ACCA) exams via self-funding and determination.

The rest, as they say, is history!

Having been a member of the association and meeting their CPD requirements for more than 5 continuous years, Chris is now a Fellow of ACCA. Well done – it was obviously fate.

Being biased, we would always say yes. But there is a catch – you need a good accountant. Not just someone who will sign off your accounts/submit your self-assessment, every 12 months, without ever meeting you.

A good accountant is in our eyes, someone who has a wide variety of clients, so that they have experience in your field of business. Don’t be a guinea pig for anyone – you’ve worked hard to get to where you are, your business is not an experiment to be toyed with.

A good accountant should also be someone who is willing to communicate with you on a regular basis, so you know the health of your business going forward, not looking back. There are benefits of reviewing the past 12-24 months, however, reviewing in real time means you can make any adjustments that can assist your profit/expenditure now. This really could be the make or break of your business.

Having a proactive accountant from the off, means that you should hopefully remove the likelihood of problems because they can offer sound advice on how to implement robust procedures that will ensure your business grows successfully.

It’s best to get an accountant in right at the beginning – so it’s important to remember when you’re looking for finance for your start-up; to budget in accountancy fees in your proposal. However, don’t fret if you’ve overlooked the assistance of an accountant and certainly don’t be put off asking for help for the future!

We know that fees are an important factor in using an accountant and that’s why we allow our clients to pay these over a 12 month period. We find that this works well for people because they can budget better, but it also benefits our cash flow and reserves – so it’s positive for both parties!

I feel that the best way to highlight the importance of hiring a good, reliable accountant is: if given the money to self build your dream home, would you do so without employing the services of the best professionals? E.g. architect, surveyor, builders, electricians, plumbers – the list goes on. Yes, you may be able to decorate the house to make it a home, but the foundations need to be laid by someone in the know!

Ultimately you are the expert of your own venture, but it is absolutely beneficial to call on the services of professionals for the areas you don’t have experience/expertise in.

Have a great weekend if you’ve read this far!

Why would you pay your fees via our pay monthly packages?

Firstly, as with any bill, wouldn’t it be great to split the payment over a period of time? In this instance, it is 12 months, so even better than most deals.

Secondly, once your final accounts are to be produced, they are already paid for – so you avoid a bill from us when you potentially have to pay taxes to HMRC.

Our packages also include the option to speak to one of the team once a month (or unlimited for our Enhanced/Large packages) – so you’ll always be in the know!

We believe that support and communication is the key to having healthy business finances – if you agree, get in touch to discuss joining the C Allan & Son family.

T: 0141 816 9750 E: info@caas.org.uk

Q. – I don’t understand how to run the finance side of my business, can you help me?

A. – We are huge advocates of helping our clients understand exactly what the numbers mean, and how to organise the financial side of your business, so that you understand if you’re making money.

We believe it is beneficial to know how your business is performing throughout the year, rather than just at year end.

Having regular financial check ups allows for immediate intervention, if your profit isn’t what it needs to be.

We also feel that using accountancy software, such as Quickbooks, is the best option for keeping track of things, since the information is presented in real time and in a simple manner.

Through our monthly payment plans, we offer clients the opportunity to get in touch to discuss any issues or ideas that they may have – just one of the ways in which we differ from other accountancy practices.

If yes; who?

 

A: We belong to the Association of Chartered Certified Accountants.

 

We must pay an annual membership fee to ACCA along with purchasing a practising certificate – this allows us to state that we are indeed chartered and have the right to run an accountancy practice.

Why is this so important?

For a start, being chartered means our clients benefit from a professionally qualified accountant who is bound by a code of ethics and professional standards. We are dealing with your personal and business finance – we must be professional, discreet and trustworthy.

By belonging to ACCA, the practice must have certain policies and procedures in place. These include having professional indemnity insurance, complaints and disciplinary procedures and we also undergo monitoring of compliance and quality reviews of our professional practice. Members of ACCA (and other regulated accountancy bodies) must comply with professional development to ensure their knowledge and skills are always relevant.

Chris is actually a Fellow (FCCA). As the Association state, “This is a major milestone as it highlights five-years’ continuous membership and compliance with ACCA’s CPD scheme. Fellowship demonstrates to employers and clients that you have extensive experience; and signifies that you’ve made a long-term commitment to professionalism and ethics”.

Did you know that unless chartered or qualified with another professional accountancy body, anyone can call themselves an accountant – even without professional training or qualifications to back it up.

What happens if something goes wrong? Not very much if they are unregulated.

Qualifications go hand in hand with experience. To qualify as chartered, an accountant must work for a breadth of different clients across a range of industries.

We have experience across several sectors both nationally and internationally. These include e-commerce, charitable, aviation, marine, generation and supply, outsourcing, local government, civil service, health and beauty, automotive, professional services, construction and IT.

All in all? You’re in good hands with C Allan & Son Accountancy Services.

A: No one likes waiting 3 weeks to get an answer from their accountant – we realised this when we sat down and curated our list of ‘what is wrong within the accounting industry’, prior to setting up C Allan & Son. So, we have written into our key performance indicators that all staff should aim to respond to emails within 72 hours.

Of course for technical questions or liaising with outside agencies such as HMRC or Companies House, things may take a little longer to investigate, therefore this should be highlighted to the client, with a realistic time frame specified.

We answer the telephone if we are present in the office – which is from 9.30am to 5 pm, with an hour for lunch (normally between 12 noon and 1 pm; however, this does vary). We do not employ a virtual office assistant to answer our calls, as we feel this is impersonal. Most of our clients tend to email, and this is our preferred method of contact because it creates a natural paper trail and a record of agreed work and timescales.

Initially, clients should email info@caas.org for any enquiries. Thereafter they will be allocated to a member of staff, who will provide their own work email address for correspondence.

We guarantee that you will always receive a response from C Allan & Son!

Q: Can you provide references?

A: Yes, absolutely. Our testimonials are our references, and they are available to view on our website and our business Facebook page.

As with every other professional you employ to carry out work on your behalf, if the accountant doesn’t have references then you should steer clear.

Ideally, you should hear from similar companies to your own – this means the accountant will have experience in your field of business and knows the challenges you face.

Q: “How do you calculate your fees?”

A: “We offer fixed-fee, pay monthly packages for Sole Traders and Limited Companies.