In these recessionary times small businesses are looking  to cut costs, one area they are looking at is their accountancy fees. It is important to understand that accountants fees are based on time and skill involved in doing your work.  One key way you can reduce your accountancy fees is for you do  the bookkeeping on a computerised bookkeeping software.

It would be best if you use the same software as your accountant. This will reduce his/her time even further on producing  your accounts. You should go as far as asking your accountant to train you how to ensure your bookkeeping is up to the required standard making his/her life a lot easier. The other advantage of this is you will be able to see how your business is doing throughout the year- are you making a profit? You will be able to take action if your profits are not in line with your plans.

The bookkeeping software packages available now are very easy to use. They are designed to be used by non accountants. They are in plain English, some even have videos explaining how to use the software. Here are some the computerised bookkeeping  packages:

Software not (online)

• Cashflow Manager
• Quickbooks SimpleStart
• Sage Instant Accounts
• Tas FirstBooks
• VT Transaction+
  

Online sofware

• Arithmo
• Kashflow
• Liberty
• Liquid Accounts

Other areas you need to ensure are:

• Have a separate business account and make sure only business transactions go through this account. Do not have your personal expenses/income go through your business account.
• Keep all your paperwork in good order. Make it easier for your accountant to track your paperwork from the entries you have made on the computer.
• Make sure you pass to your accountant all the bank statements. If they are any missing order copies from your bank.
• Once the accountant has finsihed with your books, ask him/her what else you can do to help him reduce his time on bookkeeping even further.

Since your accountant will not be using up his/her time on very basic work, it will give him/her to think about tax savings and suggesting some tax saving areas for you.

On a buy to let mortgage you get tax relief on the interest on this mortgage and not on the capital repayment part.

With a repayment mortgage, the interest element decreases over the period of the loan as more of the mortgage is repaid. This means the amount of interest you can offset against your rental income decreases and your tax bill rises.

The solution  may be to take out an interest only mortgage…

• Repayments would be less each month and the mortgage would not reduce so the interest would  remain high.

• The saving on the lower mortgage payments can be  added to the repayments on say your normal home mortgage and so repay this off quicker instead.

By organising  your mortgage in this way, you ensure your tax on the rental income is minimised. What you are doing is paying less interest on your residential mortgage which is not tax deducible and more interest on your buy to let mortgage which is!

http://www.southsideaccountants.co.uk/promises.html