Don’t miss your December accounts filing deadline

With December being a short month due to the festive period, our attention is already on December filing deadlines.

Across the UK more than 25,000 companies missed their September accounts deadline and as a result, incurred late filing penalties (a further 643 were filed in the last hour). Companies House report that in total, 223,640 late filing penalties were handed out in 2018.It is important that company directors are aware of their responsibilities to file annual accounts with Companies House on time. Failure to do so will result in a late filing penalty – not something that anyone wants as a post-Christmas present!

Failing to deliver company accounts on time is a criminal offence. Fines start at £150 for accounts that are filed up to one month late, increasing to £1,500 for accounts that are 6 months late. These penalties double if accounts are filed late accounts two years in a row.

Preparation is key to avoid a last-minute rush to file accounts, and the sooner everything is filed, the quicker you can start looking forward to a relaxing Christmas. Work with your trusted advisers to ensure that your financial records are all ready for the swift preparation of those year-end accounts.

If you require our help to meet your statutory deadlines please get in touch via info@mooreandsmalley.co.uk and one of our corporate advisers will be happy to assist.

SRA Accounts Rules – clarification of the new rules on payments of residual balances

Ahead of the 25 November 2019 introduction of the new rules, the SRA have released in October 2019 additional documents on their website clarifying aspects of the new rules.

Payments of residual balances to charity

The SRA have issued further guidance regarding prescribed circumstances for the SRA authorising a withdrawal from the client account under new Rule 5.1(c). One such instance is the payment of client funds to charity, in the situation where the individual client matter balance is less than £500, and the firm has made a sufficient effort in order to trace the rightful recipient of these funds. This brings in line with the current Rule 20.2.

In their guidance note, the SRA have provided information regarding the steps it expects a firm to follow before paying these funds to a charity. These are:

  1. that the balance is paid to a charity of your choice;
  2. you have taken reasonable steps to return the money to the rightful owner. The reasonableness of such steps will depend on:
    • the age of the residual balance;
    • the amount of the residual balance;
    • if you have access to the client’s most up to date contact details;
    • if not, the costs associated with tracing your client;
  3. you record the steps taken to return the money to the rightful owner and retain those records, together with all relevant documentation for at least six years;
  4. you keep appropriate accounting records, including:
    • a central register which records the name of the rightful owner on whose behalf the money was held, the amount, name of the recipient charity (and their charity number) and the date of the payment; and
    • all receipts from the charity and confirmation of any indemnity provided against any legitimate claim subsequently made for the sum they have received; and
  5. you do not deduct from the residual balance any costs incurred in attempting to trace or communicate with the rightful owner.

As is currently the case, authority must be obtained from the SRA prior to the payment of an individual client matter balance in excess of £500 being paid to a charity.

In the above scenario, the guidance from the SRA follows the path the Rules have headed with less emphasis being placed on the detailed Rules themselves, and more on the internal controls the firm has in place to ensure compliance with the Rules. These controls will therefore increasingly be checked by your reporting accountant as part of your annual SRA Accounts Rules compliance review.

Should you have any questions regarding the above, or any aspects of the new SRA Accounts Rules, please do not hesitate to contact Sam Evans or any member of the Professional Practice team on 01772 821021.

Link:

https://www.sra.org.uk/solicitors/standards-regulations/withdraw-client-money/

Times are changing for my accounting records

June 1986, 9am a fresh-faced young man starts his first day in the accountancy profession.  After settling in he is handed a large carrier bag contacting crumpled up invoices, receipts and bank statements, “could you get all these summarised by the end of the day”. What to do?  Luckily, he is given a calculator, pens and a pad.  Crisis averted.

Over the course of the next twelve months this young trainee would spend the majority of his time adding up 80-page, 32 column Guildhall cashbooks all by hand with the help of his trusted add lister.

The next 30 years would see some considerable changes in the accountancy and bookkeeping world.  Computers would start to appear in offices and businesses.  People would move away from traditional manual bookkeeping and use software designed to replace the old cashbook and ledgers.  Not only could you analyse the transactions far easier and quicker, but you could also reconcile the bank and check your trading statements at any point, not just at the year end.

The original software was desktop based, tying you to the office in order to keep information up to date or to get any information out.  With the advent of cloud technology, storing your data offsite, this gave you the best of both worlds.  Most of the work can be done in the office, but with cloud technology this same information can be accessed to provide quick information whilst out on the road.

Accountancy software, in particular cloud based, isn’t just confined to the general accounts it can also help with automating the day to day tasks such as;

  • Scanning purchase invoices, reducing the need to manually enter each one
  • Emailing sales invoices letting you track when they were sent and when they have been viewed
  • Taking a photograph of receipts from mobile telephone or tablet and uploading directly into the software
  • Attaching copies of invoices and receipts to transactions, reducing the amount of paperwork needed to be filed
  • Cleared bank transactions being directly fed into the software, allowing them to be automatically matched or added

This new technology has changed how a business owner can use the basic financial information at their disposal.  With more up to date and accurate information they can try and spot trends or weaknesses in the business.

No two businesses are the same, even ones in the same industry, meaning people may want different information;

  • How much am I making?
  • Who is my top customer?
  • Did I make a profit on that job?

These sorts of questions can now be answered in an instant.

Technology can help speed up the process of putting together your accounting records, allowing you to concentrate on the main reason you started in business in the first place – we are yet to find anyone who thinks great I get to do my bookkeeping at the end of the week.

For more information on this subject please contact Nick Wetherall

Open Banking Changes within Quickbooks

Open Banking regulations have been introduced in the UK.

In line with these regulations, QuickBooks is upgrading its bank feeds. Existing connections will be switched off and replaced with a more stable process which will give you a better experience.

Once these new feeds are ready, we’ll ask you to log in into QuickBooks and authorise the new feeds. This will allow your data to keep flowing into QuickBooks without interruption.

The new feeds will give you more control, improving the process and making it more secure.

Please note, for security reasons, the connection will need to be re-authorised every 90 days. If you have further questions about Open Banking, you can find more information on this FAQ on the link HERE

Minimum Energy Efficiency Standards (MEES) and their impact on financial statements

In this video, Paul Williams, Partner at MHA Moore and Smalley talks about the impact Minimum Energy Efficiency Standards (MEES) have on financial statements for companies that own and let investment properties.

Paul gives an overview of the regulations, he describes which properties are affected and explains how and why this impacts the financial statements of a company.