Are you getting value from your accounts?

Whether you are thinking about buying a new computer, employing a member of staff or acquiring another company your accounts can be used to see if your business can support the investment, or if it needs the investment.

Having accounts prepared can seem like a costly necessity. However, all businesses require some form of accounts, and you should try to get as much use from them as you can.

"Accounts" can mean annual accounts, management accounts, statutory accounts – all of which should have some use to the business owner. The extent of this use can depend on how quickly the accounts are prepared after the period to which they relate, this can be key as “old” accounts may not reflect the current position of the business.

Here are some ways in which you could utilise your accounts:

Set levels of bonuses, dividends or drawings for the coming year

Your historic accounts show the results of your business to date. This will enable you to decide what amount can be taken out of the business

With a good business plan in place also, you will be able to address targets and goals.

Planning for tax liabilities

It is inevitable that the performance of your business will have a major impact on the level of your upcoming tax payments.

Although it may not be possible to reduce the tax liability, timely accounts can provide you with the ability to plan for the resultant cashflow.

Assessing an investment decision

Whether you are thinking about buying a new computer, employing a member of staff or acquiring another company your accounts can be used to see if your business can support the investment, or if it needs the investment.

Perhaps you are looking to sell your business, in which case the accounts will be extremely useful for a potential purchaser.

Comparing your feelings of the performance of your business to the reality:

This can have extremely interesting results but will ultimately provide you with a better understanding of the key performance indicators