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A bank deposit involves placing money into an account with a banking institution. Depositing a cheque is one way to make a deposit. You can also deposit cash or make a funds transfer.
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What are Accruals?
Accruals refer to revenue that have been earned, or expenses that have been incurred but aren't yet recorded in a company's accounts.
Examples of accrued expenses include wages payable, bonuses, interest on loan and goods received.
One example of accrued revenue is accrued interest.
On the balance sheet, accrued expenses are recorded under the current liabilities section, while accrued revenue are recorded under the current assets section.
The best business bank account: Tide, Revolut, Starling or Metro?
We road tested the best business bank accounts out there so you do not have to.
Starting with the four contenders with the best features and costs on paper, we put them through their paces testing usability, ease of sign-up, response times and the day to day banking experience.
The full details are below, so you can experience what each one is like from the inside, without having to go to all the trouble of opening accounts with each of them.
It's a long article, so let's get to the conclusion and summary first for those who just want to see the results.
At the end of the day, different businesses have different needs and there isn't a one-size-fits-all bank account.
Freelancers and contractors have two strong options: I personally recommend you to go with Starling given its ease of use and low fees.
However if you are more of a traditionalist and like the support that a physical branch provides, go with Metro Bank.
For a small business, Revolut is the clear winner.
UK Spring Budget 2021: 19 Things You Need to Know About the Budget
1. Furlough scheme extended to September 2021
The government has committed to continue paying 80% of employees' wages when they are unable to work, with employers not having to make any contributions until July 2021.
2. Support for the self-employed extended to September 2021
As part of the covid support package from the government, the the Chancellor confirmed that he will extend the self employed income support scheme with those submitting a self assessment tax return before midnight 2nd March being eligible.
3. Universal Credit uplift to stay for 6 months
The £20 weekly uplift in Universal Credit has been extended for a further 6 months, with Working Tax Credit claimants being eligible for a £500 one-off payment.
Your Balance Sheet and Profit & Loss explained
Here's where our article comes in, so you can quickly get a grip on the basics.
Small Business Guide to Debits and Credits
As accountants who specialise in small business needs, we're familiar with the challenges that you face-and have put together a series of articles to help you easily understand the basics of accounting.
What are BACS and CHAPS payments?
CHAPS-an abbreviation for Clearing House Automated Payment System-is a same-day bank-to-bank payment system. It is typically used for large, one-time payments, as the transfers are relatively expensive to process. There are no upper or lower limits to the amount that can be transferred.
BACS, or Bankers' Automated Clearing Services enables payments to be made electronically from one bank to another. The transfer method handles all debit and credit card transactions, has an upper limit of £250,000 per transfer and is mainly used for low-value transactions. BACS payments take three working days to clear.
What is an Annual Return?
An annual return (AR01) is a document that all businesses are required to submit to Companies House each year. It details general information about a company, such as its ownership, capital position and management. The annual return has been replaced by the confirmation statement (CS01) since 30 June 2016.
What should I consider when choosing a business bank account?
For small business owners, freelancers or contractors, there are four important factors you need to consider when choosing a business bank account: features vs cost, sign up process, day-to-day banking experience and customer service.
How do I transfer/ change a business bank account?
Switching business bank accounts can be a tedious and time-consuming task.
But if you're a small business with less than 50 employees and an annual turnover of less than £6.5 million, you'll benefit from a simpler and quicker process-by using the Current Account Switch Service. This free-to-use service is part of Pay UK, and enables the transfer to be completed within seven days.
You'll need to take the following steps:
- Check that your bank or building society is participating in the scheme
- Get your paperwork sorted out. Use this resource to obtain a checklist of the documents you need.
- Apply for a new business bank account. After the security checks have been completed, you'll be able to choose a switch date.
- You'll be able to use the services on your present bank account as usual until the switch date-after which you can then begin using your new account.
What are Written Down Values?
Written-down value, otherwise known as the book value or net book value is the value of an asset after accounting for depreciation or amortisation. It represents the present worth of an asset from an accounting perspective.
What are Money Transfers?
Retained profits, or retained earnings are profits that a firm has earned to date (after deducting dividends or other distributions paid out to investors) and are retained in the company's accounts. In a balance sheet, retained profits are included under the owner's equity section.
What is a Profit & Loss Account?
The profit and loss account (P&L) is a financial report that shows the revenue, expenses and profit or loss of your company over a specific accounting period.
This period can be a month, a quarter or a year. A P&L is also commonly referred to by other terms, such as the income statement, statement of operations, financial results statement and earnings statement.
What are benefits in kind?
For self-employed persons or employers, it can be challenging trying to understand the rules surrounding benefits in kind. These can be complicated; some benefits are taxable while others aren't, and it gets tricky figuring out which rules apply to your situation.
To make things a little easier to understand, we've written up a quick guide below. After reading our guide, you'll understand what benefits in kind are, have a clearer idea of which ones are taxable (and which ones aren't), and get an overview of what you need to do when it comes to reporting and paying taxes on benefits in kind.
Do keep in mind that this isn't a definitive guide, as HMRC's decision to impose a tax varies by situation. If you need specific advice, doconsult our specialist accountants at Forma.