Accounting

Bookkeeping refers to the recording of the basic transactions undertaken by a business, which will typically be the sales and purchases of the business. An important part of bookkeeping is the reconciliation process to ensure that entries have been made correctly and that items are recorded in the corrected way, and for the correct amounts.

More recently we have seen a big rise in online bookkeeping solutions. These have several advantages over traditional bookkeeping systems including the following:

• allows for greater collaboration between the accountant, bookkeeper and the client. It means that the accountant can "log in" and check the status of the bookkeeping at any point in time and not only once a year at the accountants preparation stage.
• it is an automatic disaster recovery solution, as the information will be held remotely and often with a firm which is keeping constant back ups of data
• it allows for easier transfer to another bookkeeper as the information does not need to be "handed over".

We have worked with a number of online bookkeeping software providers and our preferred bookkeeping solutions would be:

• Kashflow
• Freeagent (by Iris)
• Xero

These 3 systems have many clients between them and there has been substantial investment in each of these systems.

If you require assistance with selecting a bookkeeping package, or if you would like to outsource bookkeeping to MG Group, we would be delighted to complete this for you, and can provide you with a quote for the services. Typically the quote can be based on the number of transactions so you know that it does not depend on the speed of the bookkeeper!

Please contact your usual MG Group contact for further information on this.

Management accounts are a key tool in the decision making process for a business. Accurate and timely management accounts allow a business to identify where problems lie in the business and will allow for remedial action to be undertaken.

We provide a number of our clients with either monthly or quarterly management accounts, and will generally also have a quarterly management meeting to go with these accounts. We will try to identify key management information with our clients so that we can ensure that the key financials are being reviewed and necessary actions are being taken.

We have many years' experience in the preparation of financial statements for reporting of results to key stakeholders. The financial statements will be prepared for the shareholders of the business so that they can see how well their investment is performing. In many cases, our clients will also be involved in management of the business as well as owning shares.

One of our main deliverables each year for clients is the provision of financial statements - these form the basis of calculating the corporation tax due on the profits of the business, and also are used by banks when deciding on how much to lend a business - perhaps because the business is looking for further expansion. A number of our engineering client businesses require accounts to be prepared that meet the requirements for taking out hire purchase on heavy capital machinery used in the business.

Financial reporting is very much a case of looking back the past performance and seeing how the business has performed. This contrasts with management reporting (which is more current and forward looking). Both financial accounts and management accounts are key deliverables that we produce to the highest quality for our clients.

This is where we begin to really add value! The key to success in the early days of business is to ensure that the business does not "overtrade" and therefore ensuring that enough cash remains within the business to allow it to operate properly without overstretching the business financially. A key component in ensuring that the business does not overtrade is to complete a cash flow forecast for the business - this is a very useful exercise as it forces the managers/owners and the accountant to critically think about cash issues such as:

• debtors - what are typical credit terms for the industry, do we charge interest on late debts?, should we consider using a factoring company?, how can we reduce debtors, what should the billing and collection strategy be for the business? should we offer a prompt payment discount?
• creditors - how can we improve the credit terms that we have in the business?, should we work with certain suppliers so that we can negotiate better terms
• what are the highs and lows in terms of sales, and when do we need to make our purchases?

For our target client sectors we can provide great insights into the area of cash management and profit forecasting and can provide benchmarking analysis to our clients so that you can compare your business to others.

Please contact your usual MG Group contact for further information on our cash flow/profit projection services.