Whether you’re an SME, limited company, or sole trader, the preparation of annual business accounts is a legally required administrative burden that most people find daunting and complicated to wrap their heads around.
And because complying with this requirement is often postponed time and time again, the resulting delay comes to harm businesses in the long term.
As it turns out, there are several reasons why getting your accounts done early may prove highly beneficial to you and your business. Companies like GGM accountancy can assist you with this so that you don’t have to worry about it.
So, if you’re tired of dreading when the time comes to prepare your business accounts and want to improve your business practices alongside your understanding of the value of getting ready in advance, this article has got you covered.
Staying on top of your tax liability: bid uncertainty farewell
Preparing your accounts in advance places you in a much stronger position by keeping you in the know.
When you get your accounts done early, you gain the advantage of knowing the extent of your tax liability. Timely account preparation provides you with certainty in knowing just how much you owe in tax, preventing any unwanted surprises when it may be too late to mitigate your liability better.
Benefit from better budgeting
Because you’re well-informed about your tax liability, you can use this knowledge to your advantage by sharpening your planning, budgeting, and being better prepared for the future.
Preparing your business accounts ahead of time means that you can plan towards spreading your tax liability out over cash inflows, or incrementally save as you go. Being prepared in advance will allow you to pay what you owe on time without the need to file for an extension.
Improve your ability to forecast & plan strategically
Timely preparation can also prove beneficial when it comes to having a better overview of your business assets and liabilities, allowing you to forecast based on accurate accounts so that the decisions you make for your business help you grow.
By knowing the full extent of your liability, you can even devise strategic planning initiatives to save beyond your tax, so you can be prepared for taking out that expansion loan!
Increase your chances of being approved for finance
Another reason to consider getting your accounts done early is that you will put yourself in a much better position if you want to apply for corporate financing. Up-to-date accounts are a must for approval.
Mitigate trading losses & benefit from tax remuneration
If the pandemic has negatively affected you due to decreased consumer spending and you incurred trading losses, preparing your accounts early will enable you to carry your losses back against more profitable timespans.
Not only can early preparation serve with mitigating losses, but also provide you with a safety blanket. When you pay off tax liability in advance, you become entitled to tax remuneration, helping you fill any monetary gaps and continue to grow as a business.
