Background
A business consultant in the UK started their venture in 2022, focusing on building their client base and establishing their business. However, like many new entrepreneurs, they found it challenging to keep their accounting up to date while managing day-to-day operations. By January 2024, they recognised the need for professional bookkeeping assistance and approached us to bring their accounts up to date and file overdue VAT returns.
Challenge
The client faced a significant backlog, with 18 months of bookkeeping that needed to be caught up. This included reconciling numerous transactions, ensuring all expenses and income were accurately recorded, and filing overdue VAT returns. The delay in bookkeeping also meant that their accountant couldn’t begin preparing the first set of year-end accounts, hindering any potential tax planning.
Approach
We adopted a structured approach to address the client’s needs efficiently:
1. Detailed Assessment: We conducted an initial assessment to understand the client’s financial activities and identify the volume and nature of transactions over the past 18 months.
2. Transaction Reconciliation: We meticulously reconciled all transactions, ensuring that every income and expense was accurately recorded. This process involved categorising each transaction correctly and verifying against bank statements and receipts.
3. VAT Compliance: Once the transactions were reconciled, we prioritised filing all overdue VAT returns. This was crucial for ensuring compliance with HMRC regulations and avoiding any penalties for late submission.
4. Preparation for Year-End Accounts: With the bookkeeping up to date, we prepared comprehensive financial records and handed them over to the client’s accountant. This enabled the accountant to start working on the first set of year-end accounts promptly.
Outcome
The results of our intervention were highly beneficial for the client:
- Up-to-date Bookkeeping: We successfully brought 18 months of bookkeeping up to date, providing a clear financial picture of the business.
- VAT Compliance: All overdue VAT returns were filed, ensuring the client was compliant with HMRC requirements.
- Foundation for Tax Planning: With accurate and current financial records, the client, in collaboration with their accountant, could engage in effective tax planning.
- Informed Decision-Making: Both the client and their accountant can now make sound financial decisions based on reliable and up-to-date records.
Conclusion
This case study illustrates the critical role of timely and accurate bookkeeping in the success of a business. By catching up on 18 months of financial records and ensuring VAT compliance, we enabled the business consultant to focus on their core activities with the confidence that their finances were in order. The client can now look forward to strategic tax planning and informed decision-making, laying a strong foundation for future growth.
If you are interested in finding out how we can help your business, please get in touch.