Are you an accountant dealing with day-to-day accounting issues? Our business profits toolkit outlines some great benefits for small and medium-sized businesses. You’ll need the help of our high-end accounting software to save your business. Here are some common mistakes when calculating business profits you must avoid to overcome challenges as an accountant.
See Our Packages
Take Care of Your Books
Good record-keeping is essential to calculate business profits. That’s the area our QuickBooks accountants like to discuss. Poor records may result in inaccuracies in sales or allowable expenditures.
Record Your Business Income
The profit or loss will only be correct if you include all income. Include business income on an accrual basis to match the income to the period earned. Not all sources of business income will be immediately obvious. The income of the business includes scrap sales, contra sales, or barter arrangements. Some people even overlook cash sales.
Note All Your Allowable Expenses
Take care to include expenses at the correct value to ensure that the profit is not overstated. We note all allowable expenditures. Permit expenses for business purposes, but specific prohibitions deserve attention, such as those for business entertainment. Regularly review purchases and expenses.
Work on Your Complex Areas
Where the business holds stock, ensure it is valued at the lower of cost and net realizable value. Errors will arise if stock is overlooked or valued incorrectly.
Work-in-progress can be a complex area, and advice should be taken to ensure that the treatment is correct. Consider all the miscellaneous areas, including a review of post-balance sheet events and whether any adjustment to the accounts is required.
Staff costs should also be reviewed, and any amount unpaid nine months after the end of the period should be added back. For directors, consider the date on which amounts are credited to the director’s loan account.
Are you looking for professional tech-savvy tax advisors and accountants in the UK to guide you? Contact us now!
