As 2021 draws to a close, Davis Grant says business owners and management teams should focus on several critical steps in the new year.
The London-based accountancy firm appreciates the troubles and tribulations that have afflicted many businesses and feels that owners should bring order to their business with some resolutions for the next 12 months.
The additional uncertainty created by price inflation, labour shortages, the pandemic and Brexit, has made it more challenging to run a business, especially when it comes to keeping an eye on a company’s financial health.
Neil Driver, Director at Davis Grant explained that businesses can’t move forward confidently without getting a better idea of their current and forecasted finances.
“Most companies can’t strategise or adapt their business model without the right data to hand, “said Neil.
“Owners and managers need to understand their sales, profits and losses, which is only possible by conducting regular monthly management accounts, with the support of the latest cloud accounting software.
“Combined these can provide a business with important information in real-time that may make decision-making process faster, simpler and more informed.”
The integration of new online accounting systems will be essential in the new year as HM Revenue & Customs continues with its implementation of Making Tax Digital for VAT.
This initiative to digitise the UK tax system will require all VAT registered businesses, including those below the £85,000 turnover threshold, to report and record VAT digitally each quarter, using compliant software, from April 2022.
Neil said that while many businesses had already taken steps to get ready for this landmark change, many more are unprepared and need to act immediately or face potential penalties.
“This key change to taxation should be part of a business’s wider plans for tax next year, which should also include a full review of allowances and reliefs as we approach the end of the tax year on 5 April,” added Neil.
“Every year, millions of people and businesses miss out on easy opportunities to reduce their tax bill because they do not seek advice early enough.” Find out more about Davis Grant’s tax, accounting and business advisory services by contacting us.