With all the online systems available today to manage a business there is no excuse for any business not to know accurately the basic costs of the business. Too many breweries do not really have an accurate monthly profitability analysis or understanding of the costs and only discover the true level of the business’s profitability, some months after the Year End when their accountants have done the annual accounts for HMRC, or when they need to generate some numbers for the bank.
These days with systems like Xero & Kashflow it is easy to record and log all your data. If you link that to a proactive accountant, who supports these online systems and who can access the data to monitor and provide advice on a regular timely basis, you then have the right combination :
- Accurate timely financial information
- Proactive accountant to ensure that the business can go forward in a structured basis, making the correct decisions.
We recommend that every drinks business, large or small, growing or struggling, should look for a proactive accountant who supports their on-line accountancy package and should generate accurate up-to-date monthly management accounts which clearly show the key financial performance indicators ie. profit/loss at the month end and, equally, an aged list of creditors and debtors.
All of this information should also be accessible at the click of a button at any time.
And all of this does not need to cost the earth.
Software - Online web based accounting software with a linked bank feed to assist in reconciling the statements costs from around £25 a month
Accountant - A good accountant should cost no more than £3000 a year for a £1/2 Million a year business, for a £1 Million business around £5000
Book keeping – Up to the £1/2 Million most breweries usually do the book keeping in house, when it goes above that level the business should look to employ a part time bookkeeper or start to use a third party book keeping service (quite a few accountants also provide a book keeping service). It is a false economy to try to cover the increasing amount of time that the book keeping function takes up by parceling it out amongst the regular staff. Accept that as it grows into a significant amount of work, it should be done by a dedicated resource.
A good accountant is key to the whole activity and they should be working with the business on a regular basis. All web-based accounting software allows your accountant to look in and, if needs be, correct any erroneous data entry.
Four key areas where you want your accountant to interface with your business:
1. Assist you in ensuring timely & accurate book keeping
2. Assist you to realise meaningful reports from the system to help with the running of the business - Profit & Loss, Debtors, Creditors, Cashflow etc
3. Telephone support on your online accounts system
4. Accounting and tax covering all the various legal issues associated with running a business
· Corporation tax computations and returns
· P11d’s (benefits returns)
· Company secretarial filing and returns
· Correspondence with HMRC
Using your accountant simply to fulfil your HMRC requirements, is in this day and age a false economy. Modern business needs up-to-date, real time information in order to make the decisions required to compete in the current competitive market place. To keep ahead in the brewery business, we highly recommend you enlist the support of a proactive accountant.