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Why Simple?

Why Simple?

Simple Accounting Limited uses a United Ledger concept.  This means that the records that you keep to make your sales and chase your debts are also the records we use to produce your tax returns.  There is no secondary bookkeeping.

We generally use desktop software for our clients.  We tend to recommend Acclivity AccountEdge for PC or Mamut AccountEdge for Mac or sometimes Solar Accounts (either PC or Mac).  We have a limited number of smaller clients on cloud software where the automatic entry of transactions from the bank is a critical requirement.  We tend to recommend Freeagent CentralWave or Clearbooks. We have yet to find a nice Linux software.

Because we use the simplest software for smaller VAT registered businesses, we save them money and time.  Note that we pay for the software you need as part of your Business Companion Service.

Why do we only work with specific software?  Why do we hate ‘Sage’?

First consider how much your software costs you.

Does it just cost the licence price?  No- your software costs you much more than that.

OK , what if we add the cost of specialists to install it, plus the cost of training to use it? Now add the cost of updating the software plus the cost of licence renewal or helpline fees? Well the real cost is even more than that.

OK so lets add in the indirect costs charged by your external accountants running off their year end reports, plus the time spent by you and your senior colleagues running off the reports you need to manage your business? No-this is still not enough.

The key opportunity cost of any software is the time spent by your bookkeeping and admin staff in the day-to-day use of the program. Simple Accounting believes that getting the maximum productivity from your bookkeeping, sales and production staff on the system, is the key to getting the best value business management system.

This is an unusual point of view.  That is why we have an unusual list of criteria for testing the software we approve.

Is my system Simple?

Try these tests to see if your current system is simple.

  1. How much money are you owed by your customers? How many clicks does it take you to find out? With a Simple Accounting System it take just one click from the main welcome screen. With one mouse click you can see who owes you what and for how long. You can drill down to look at individual invoices. Can you?
  2. Do your Net Assets figures tie up? Have a look at your last set of formal year end accounts. At the bottom of the balance sheet will be a figure saying funds or capital. This is your investment in your business. It equals a figure just above it labelled ‘Net Assets’. This is the cash value of the assets in the business less its liabilities. Now have a look at your accounting system. Within four clicks of the main screen you should be able to see the same ‘Net Assets’ figure reflected in your books. Can you?
  3. Can you justify last year’s stated profit in detail? Have a look at your last set of formal year end accounts. At the bottom of the profit and loss will be a figure saying ‘Net profit after taxation’. Now have a look at your current accounting system. Within four clicks of the main screen you should be able to see the same ‘Net Profit’ figure reflected in your books. Can you?

If the answer is ‘no’ to any of these you need Simple Accounting!

Simpler Bookkeeping

The software we recommend has to have simplicity built in. Another feature we are keen to see is a ‘Bank Register’.  This allows you to see transactions in the bank account day-by-day.  The bank then reconciles itself.  See our list of recommended software.

Simpler Accounting

Another reason we are able to do more than most accountants is that we try to simplify your business’ tax affairs and its administration.  The easiest way to reduce your tax bill and the bureaucratic burden, is to make your affairs simple.  We try to avoid doing things that the HMRC do not like, where the bureaucracy is awkward and where the tax saved is marginal. We help you to put business costs which are not allowed for corporation tax returns or personal business tax returns into clearly separated nominal accounts.

Examples include:

  1. We repay any director’s overspent loans accounts. We do not leave any director’s loan balances in excess of £10,000 that would otherwise attract a section 455 withholding tax charge and a P11d Declaration.
  2. We recommend against Company cars unless they are extremely fuel efficient. Company cars  have become something of a tax liability in limited companies.
  3. We separate out Items charged on P11Ds.  We try to get as many of these covered by expenses dispensations as possible. The P11D alters the personal tax affairs of an employee and is therefore better to try to get recurring expenses covered under a PAYE settlement agreement.  This can also lead to a tax saving, where the benefit in question comes under Class 1a rather than Class 1 National Insurance.
  4. We help you avoid paying for fines for the late payment of tax and negotiate with the HMRC when you can best pay.
  5. We help you claim a proportion of those domestic costs (eg home mortgage interest, utilities) that can sometimes be legitimately reclaimed, and otherwise might get ignored.
  6. We move you onto VAT schemes that help save effort and cashflow.
  7. We exploit HMRC schemes that financially encourage research and development and purchase of businesses with goodwill.
  8. We separate out entertaining of customers and Christmas boxes for suppliers which otherwise leave you potentially liable were you to be investigated.

All this leaves the bookkeeping, the formal accounts and the tax accounts we produce fully in line. There is no secondary bookkeeping at our office. Simple.

It also leaves us more time to consider your overall tax position and business efficiencies we may help you achieve. Which makes the service more cost-effective for you.

Next Step:

Please contact us if you need further advice, have any questions about our services, or would like a free consultation or a fixed quote.