Role Of Financial Accounting In Decision Making Process

 

While it might sound exhausting or obscure, Financial Accounting or Bookkeeping playing a key role that permits organizations to monitor all their monetary exchanges. It is the cycle where organizations record and report the bits of financial information that go all through their business activities that permit both organization managers and outside investors and analysts to comprehend the organization's wellbeing and settle on informed choices.

Guidelines and Best Practices

 

There are a series of bookkeeping rules that organizations should stick to in their Financial Accounting. Most traded on open market organizations in the United States follow the proper accounting rules (GAAP), a typical arrangement of principles and best practices that bookkeepers follow when they do the math and complete monetary statements.

Organizations outside the U.S. for the most part adhere to other worldwide principles that change by area and nation. In any case, paying little mind to which set of guidelines is followed. there are three fundamental zones where Financial Accounting assists with dynamic:

 

1.      It gives investors a benchmark of examination for—and the correlation between—the financial health of securities-issuing enterprises.

 

2.      It assists creditors to assess with evaluating the dissolvability, liquidity, and financial soundness of organizations.

 

3.      Alongside its cousin, managerial accounting, it assists organizations with settling on choices about how to dispense scant assets.

 

Investing Decisions

 

Fundamental Analysis relies vigorously upon the Accounting data that is recorded on an organization's fiscal reports, including the balance sheets , income statements, and cash flow statements. Every one of the budget summaries for traded on open market organizations are made and answered by the monetary accounting norms set out by the Financial Accounting Standard Board (FASB) and submitted to the Securities and Exchange Commission.

 

Investors and investigators utilize the data from financial statements to settle on choices about the valuation and reliability of an organization, permitting them to set value targets and decide whether a stock's cost is genuinely esteemed or not. Without the data gave by financial accounting, investors would have less understanding about the chronicled, current, and forthcoming monetary strength of stock and bond backers. The prerequisites set out by the FASB make consistency in the circumstance and style of monetary records, which implies speculators are less inclined to be liable to bookkeeping data that has been separated dependent on an association's current condition.

 

 

 

 

Loaning Decisions

 

Financial Accounting by Accountants in Ireland is likewise a key for loan bosses, from banks to bondholders. Since financial statements outline each one of its resources just as the short-and long haul obligation, banks improve the feeling of an organization's creditworthiness. 

 

Various normal accounting ratios lenders depend on, for example, the debt-to-equity ratio (D/E) and times interest earned ratio are gotten totally from an organization's budget reports. In any event, for exclusive organizations that don't follow the necessities of the FASB, no loaning foundation expects the risk of enormous business credit without basic data gave by monetary bookkeeping procedures.

 

At last, a loan specialist truly needs to realize exactly how much danger is included when lending company money, which can be dictated by auditing the organization's financial accounting. When this degree of danger is resolved, the bank will likewise have the option to plot precisely the amount to loan and at what interest rates through the cycle of Underwriting the loan.

 

Corporate Governance

 

Reliable Accounting like Accountancy services in Ireland serves a reasonable capacity for outside investors and moneylenders as well as for the inside functions of the organizations themselves. 

 

The most evident advantage for organizations to allude to their financial accounting is to meet the lawful and administrative commitments delineated for (public) firms. Organizations should be straightforward and straightforward about their monetary exercises and the data reported should be precise and routinely refreshed.

Beyond the administrative and consistence obstacles financial accounting also assists organizations with streamlining their everyday tasks and distinguish the sorts of undertakings that could give development openings later on. financial accounting assists managers with making spending plans, comprehend public insight, track proficiency, investigate product performance, and grow short-and long term techniques, among a few different choices helped by accounting figures.

 

The Bottom Line

 

financial accounting is a route for organizations to monitor their activities, yet in addition to giving a depiction of their monetary wellbeing. By giving information through an assortment of explanations including the financial statements and balance sheets, an organization can give investors and moneylenders more influence in their dynamic.

 

KEY TAKEAWAYS

 

Financial Accounting includes recording, summing up, and reporting the surge of exchanges and financial action coming about because of business tasks throughout some period.

Administered by a standard arrangement of practices, Financial Accounting's final result is a bunch of true organization budget reports including the balance sheet and income statement.

 

These budget reports are then utilized by organization directors, Contractors, financial specialists, analysts, banks, and different partners to settle on educated choices.

 

How to do your own End of Year Review as a Contractor

 

How to do your own End of Year Review as a Contractor

As an employee an inevitable part of the working year is the end of year review. The purpose of a year-end review is for you to reflect on your achievements, learnings and take some time to recognise what went right and wrong as you plan & set goals for the coming year.

As a self-employed contractor taking time to conduct a self-assessment is often overlooked, however we are here to tell you to pen in time now to grab a coffee & look back through your year as well as forward to where your career & personal path is headed in 2021.

Taking time to do a self-assessment means you will be entering 2021 in a ‘woke’, rather than autopilot headspace, with control of where you are steering your future based on where you have come from.  

Importantly it gives you the chance to see if the destination you are headed towards is out of kilter versus your long term goals, or maybe it’s perfectly on track!

Here is how to assess your year & start to plan for the next:

-  Thinking about the last 12 months what goals did you set out coming into 2020 and what were your 3-5 biggest achievements in that period. Reflect on these and try to understand how you can bring the learnings and skills from these achievements into 2021. Maybe you took on a new project in your role, maybe you mentored a new staff member or changed industry – what do your biggest achievements tell you about what success means to you and how can you build that into your 2021 goals?

-  How is your contracting role fitting in with your personal goals – maybe that is work life balance, income, job satisfaction, time management etc. What has this year contracting taught you about how it fits into your values & personal goals? Is there anything that needs to change in 2021 or that you would like to build into your goals for the year based on the wider ecosystem of your contracting role and your life?

-  Identify one time when your working contribution contributed to success for a company or project you have worked on. We can often forget significant contributions we have made to company success (as we rush onto the next task) that are highly valuable in negotiating contract renewals or adding to our CV for future role applications. Note your successes when they happen with some top line details and then at the end of the year pick your most notable & impressive ones!

-  Think of some challenges you faced this year (2020 certainly gave us a few of them!) and how you overcame them – this shows both your personal & professional self your ability to bounce back without the all too often modesty we afford to overcoming struggles. It demonstrates your resilience and determination even in difficult times. So often we plough through the year and forget the mountains we have overcome that can give us confidence the next time we face a hurdle and recount how we handled the last! Step back, reflect and pat yourself on the back!

-  Think about any skills/ topics/opportunities that came up this year within your contracting role in the last 12 months that you didn’t feel 100% confident in to pursue. What would like to improve and build on in the coming year?

-  Thinking about the future plan & what will help you to get there – is there a course that might help you, a mentor you could chat with, research you need to do- what is your first stepping stone to your 2021 goals? This one takes time to think through …is there something you want to work towards- a promotion, a company, a move to a new country or a totally new start in a new role – what is the first thing you can do to get started – now is the time to plan & set your 2021 vision!

We spend so much time ‘busy’ in the day to day that taking the time to review can seem impossible to fit in but, in reality it’s crucial, and it’s massively valuable especially when self-employed to stay on track and focused.

Taking the time to assess your journey so far means you have time to check you are on the right road, maybe even on the right map as you steer into your future and a brand new year!

As an independently employed contractor setting aside some effort to direct a self-evaluation is frequently ignored, anyway we at icon accounting, our Accountants in Ireland are here to advise you for Accountancy Services for Contractors to pen in time presently to get an espresso and think back during your time just as forward to where your vocation and individual way is going in 2021. https://www.iconaccounting.ie/blog/how-to-do-your-own-end-of-year-review-as-a-contractor

Brexit - Importing & Exporting post 31st December 2020

This will be a very steep learning curve for many businesses no matter how well prepared they happen to be. I am sure the new systems will be second nature after a few months, however, getting to this point will be challenging and not without its stumbles.

To quote TB or Brendan Behan, whichever you favour…“Every cripple has his own way of walking”

In other words, we will find many paths and many more solutions to the issues we face, but ultimately, we will overcome these. Some suggest specialist “businesses” might smuggle, though their expertise may very well already be in place for this!

On a more serious note for businesses, please ensure your VAT number is EORI registered, this can be completed on Revenue’s online Service ROS. Failure to enable this number may result in your goods being held by customs

Just a few quick points on importing and exporting:

Importing

From 1 January 2021, Irish businesses that currently buy goods from the UK will be met with additional tariffs and admin work to ensure their compliant import. EU customs rules will apply to all goods which are brought into the EU from the United Kingdom; familiarise yourself with those that apply to those products that you import. You may need to arrange your own customs clearance agent, or for smaller items, the transport company will be able to handle this at an additional fee.

If you buy goods for resale, which UK authorities have issued marketing authorisations, approvals or certifications, next year these will not be sufficient when placing products for sale in EU.

Act in good time to transfer certificates and authorisations from any UK-based body or authority to one based in the EU, or to seek new ones within the EU. Markings or labelling of goods referring to statutory bodies or persons in the United Kingdom will not comply with EU labelling requirements after Brexit. Make sure the goods you import from the UK can be distributed the way that you intend.

Exporting

As of 1 January 2021, if you export goods to the United Kingdom, you will become an exporter of goods, subject to the UK laws applicable to importers of those products. Even if a deal can be reached on tariffs and quotas on products traded between the EU and the United Kingdom, goods will be subject to any applicable UK regulatory and compliance requirements for goods sold in the UK. In certain key areas the UK has already indicated an intention to adopt a different approach to the EU on checks, controls and requirements on imports, including for safety, health and other regulatory or public policy purposes. Make sure you keep track on how new UK laws impact on your exports to the UK and how they differ from your EU sales.

Free movement of goods and road transport operators across UK borders with the EU will become more complicated. From the beginning of 2021 UK road transport operators will no longer have automatic access rights to the EU and will need to comply with formalities when crossing the UK-EU border. Consider longer delivery times and factor in any additional formalities to be completed when updating your supply chain and logistics commitments to take account of Brexit. to know more click here. https://www.iconaccounting.ie/services/switching-accountants

Why Upskilling Matters More than Ever

 Over the past months at Icon Accounting we have noted a continued upward trend in contracting roles available, new contractors starting for the first time as well as contract renewals for our existing contractor community.

This is incredibly positive news for the contracting industry overall showing it remains robust & more than that it is in real positive growth!

With this positive news comes the reality that as a sector it is becoming more competitive than ever, and standing out as a professional contractor is crucial to land and keep the best roles.

There are lots of ways to stand out as a professional contractor and at Icon we are always looking at ways we can help YOU to stand out!

One of the best ways to differentiate yourself is through continuous professional upskilling, ensuring your skills & qualifications remain fresh, relevant & in date in a fast changing world!

At Icon we have recently launched iPerks a contractor platform giving you access to a multitude of benefits, one of which is upskilling through a range of courses with globally accredited colleges ensuring you can upskill in your role without spending a penny!

What Is Upskilling?

Upskilling is the process of learning new skills that will aid in ones work or personal development.

Why Does It Matter?

The Covid -19 pandemic has shown us how rapidly the work of work can change & how quickly we can be forced to adapt our skill set to new realities. The business world is changing at a faster pace than ever before.  Remote working has been accelerated into a necessary reality for many sectors, as has automation of many previously manual tasks with improved technology systems often even removing the need for headcount across many functions.  In reality this means that we are now competing with a global workforce rather than a local workforce & being forced to pivot & grow our skillset to stay relevant in pretty much every sector of business.

How Can It Benefit Me?

Upskilling should be looked at as a real benefit for both your career & personal progression. As well as coming with the often added benefit of increasing your chances of promotion within your role or company & opening up lots of new opportunities in your career it is likely to benefit your confidence as well as your income!

Where To Start?

This is the really important part – for many the idea of upskilling feels too big or daunting to explore and so they stop before they have started- unsure of where to even begin, often intimidated by the thoughts of a return to learning. Our advice - start at the beginning!

What do we mean here?

Think with the end goal in mind. Do you want to change professional path? Are you looking for a promotion? Is there a certain company or role you have your eye on?

Getting the goal in mind you can then begin to see what you options are to start on the path to upskilling in that direction.

- Use your professional network to link in for virtual coffees to explore options with people who have the roles you would love or are in companies you would love to get into- find out how they went about their career path – you might be inspired!

- Review your CV to see where the gaps might be in relation to your career goals.

- Research your industry and see what roles are trending, popular & offer competitive earning potential

- Reflect on the parts of your current career your enjoy and where you would like to grow more – this might be people management, professional skills, upgrading an existing qualification or even taking a short specialist course in a niche area

Through Icon you also have exclusive access to our iPerks platform offering hundreds of accredited courses across many sectors to help you add real qualifications to your CV without a hefty price tag!

Conclusion

Staying one step ahead is the key to career success no matter what your sector, upskilling is one of the best ways to get there!

Not yet contracting with Icon? Talk to our team today to see how you could benefit from becoming a professional contractor with us & how we can help you upskill along the way!

Info@iconaccounting.ie

5 Key Learning Points from LinkedIn’s Marion Markey

 We are always looking to add more value to our existing clients and are very thankful to Marion Markey from LinkedIn who took the time out to give us all some tips on how to get the most from our LinkedIn profiles!

Be Visible

There are over 660 million members, 20 million jobs and 30 million employers on the platform making it the largest professional network by far.
If you are not on LinkedIn already, it should be a priority to create a profile in 2021. Connect with peers and expand your network to ensure that you not only stay up to date with the latest market trends but also future opportunities.
85% of jobs are filled through peer referrals making it the number one source of recruitment.

Detail your work experience!

If you add details to your work experience whether it be details about the project, the contribution you made, key learning points and any challenges faced. By doing so, you are 5 times more likely to receive connection requests, 8 times more profile views and 10-fold the number of messages received.
If searching for opportunities, you can also edit your experience and skills to appear in the order of relevance – ensuring that potential employers see the parts of your profile that you want them to!

Add examples of your work!

You can and should upload videos, presentations, and videos of previous projects that you have worked on. This is an ideal tool for making sure your profile visitors get a complete picture of your professional accomplishments to date.
Giving a dynamic, visually appealing representation of your professional story can make you stand out from a very competitive labour market.

Activity is still underrated

Adding your own skills, endorsing other’s skills, and sharing status updates are all tried and tested ways of increasing profile engagement. Endorsing others on top of the fact that if you endorse a colleague or peer, they are likely to return the favour.

Plus, members who add skills generally see 17 times more visitors to their profile than those who do not.

Best practices for sharing updates for those less comfortable or familiar with LinkedIn below:

- Share your authentic voice

- Post frequently

- Start a conversation or share your point of view

- Include rich media to increase engagement

- Create an opportunity for reciprocity

To be successful in Contracting, you need to be an expert in your field – do not be afraid to share that expertise.  Publishing content is a separate feature to sharing a status update and one that is often associated with expert level opinions.  As a successful independent professional, you are an expert in your field – show that to your entire network by publishing content. 

Create a headline that captures attention, include a photo to stand out and think about your audience when deciding on article length.

Most importantly, be yourself and always remember that line between LinkedIn and Facebook or Twitter, your opinions should be professional, never personal, political, or otherwise.
With the world working remotely and with social interaction limited with Covid-19, having a digital footprint and a LinkedIn profile is more important than ever before.

Thanks again to Marion Markey from LinkedIn for joining us and for offering to assist any of our contractors should they have any queries, you can contact Marion at mmarkey@linkedin.com or as always you can get in touch with any of the team at Icon Accounting by calling 01 – 8077106 or by emailing info@iconaccounting.ie

LinkedIn has always been the greatest source of knowledge. We at Icon accounting, one of the best accountancy firms in Ireland always seeking good knowledge that can help our business to grow. This type from Marion Markey we got the opportunity to learn some tips on how to get the most from our LinkedIn profiles which include; Be visible, Detail your work experience, add examples to your work, add your skills set, endorse other profiles, most importantly know the difference between Facebook, LinkedIn, and other social platforms. As we are having the team of best accountant in Ireland these tips will surely be going to help our accountants.

Covid Restrictions Support Scheme ("CRSS")

As some businesses face into their third week of lockdown, Revenue have just released details on the operation of the Covid Restrictions Support Scheme (we'll call it CRSS from here on!)

CRSS has been introduced to assist businesses that have been significantly impacted by localised and national lockdowns

Successful applicants will receive cash payments from Revenue known as an Advance Credit for Trading Expenses (“ACTE”).

The scheme will operate from 13 October 2020 to 31 March 2021.

Who can apply for CRSS

- Companies

- Self-Employed Individuals

- Partnerships

Conditions to qualify for CRSS

- Must be trading in a location that where restrictions are imposed.

- The public are prohibited or significantly restricted from accessing your business premises. For the majority of businesses this means restrictions at Level 3 or higher. 

- Existing business - the income (excluding VAT) does not exceed 25% of an amount equal to the average weekly turnover of the business in 2019 multiplied by the number of weeks in the claim period.

- New business – the income (excluding VAT) does not exceed 25%% of an amount equal to the average weekly turnover of the business in 2020 multiplied by the number of weeks in the claim period.

- Tax Clearance Certificate is available.

- VAT obligations are up to date.

- You will resume trading once restricted are lifted.

Determining a Claim Period

Covid Restriction Period - A claim period will commence on the day the Covid restrictions are applied and will end when the Covid restrictions are due to end (based at the time the restrictions are introduced).

Covid Restriction Extended Period - If the restriction is extended this will constitute a new claim period from the date the restriction was due to end initially and will end on the date the extended period is due to end (based at the time the period is extended).

Example

On 13^th October Level 3 restriction in Dublin was set until 28^th October. Therefore 13^th – 28^th October is a Covid Restriction Period.

On 22^nd October further restrictions were implemented until which are due to end 1^st December. Therefore 29^th – 1^st December is a Covid Restriction Extended Period i.e. this is a new claim period.

ACTE Amount that can be Claimed

ACTE will be determined by the business’s prior turnover with a maximum weekly payment available capped at €5,000.

ACTE will be based on the turnover from 1 January 2019 to 31 December 2019:

- 10% average weekly turnover for 2019 up to €20,000

- 5% average weekly turnover for 2019 exceeding €20,000

*For new businesses established between 26 December 2019 to October 2020, ACTE will be based on turnover from date business commenced to 12 October 2020.

Example

Joe Bloggs turnover from his business in 2019 was €663,000 (exclusive of VAT). Assuming claim period is for 7 weeks.

- Average weekly turnover for 2019 - €663,000 / 52 = €12,750

- 10% of €12,750 = €1,275

- Multiplied by number of full weeks in claim period €1,275 x 7 = €8,925 ACTE

How is ACTE treated for tax purposes?

The ACTE payments receivable from Revenue must be reported in the tax return when preparing the taxable profit by reducing the amount of deductible expenditure.

How to Claim

The claim process is available on Revenue Online Services under the e-Repayments. This will be a 2-step process:

1) First register for CRSS on ROS, and

2) Complete a claim in respect of a claim period/s.

If you have a tax agent, they can access this using their agent ROS account.

If you have any queries you can visit Icon Accounting or email is at info@iconaccounting.ie and one of our members will be in touch in no time. We are one of the best Accountancy services in Dublin, Ireland.

Good try, But no you definitely can't claim that…

 Expenses – What you Can’t Claim as a Contractor (& some of the strangest requests we have had!)

Whether you are new to contracting or a seasoned contractor the topic of claimable expenses remains cloudy for many…

At Icon we have created videos & blogs covering general expenses and frequently requested topics like ‘home office expenses’ but we understand there are always more questions and always some remaining grey areas of what counts as a claimable business expense.

We have compiled the most frequent (an unusual) expenses queries we get at Icon Accounting of expenses you CANNOT claim. So, before you buy that golf membership or upgrade the kitchen table to serve as your new desk make sure you read this…

Holidays

Sorry your trip to sunnier climates does not count as an allowable business expense- though we wish it did too!

We have clients who try to claim holidays abroad, justifying it as a business trip,  in one case we had a client who tried to expense a trip to Maldives…justification was that he chose to go there with the other director in order to hold the AGM of the company….Co-incidentally himself and the other director only got married the week before… a curious coincidence !

Entertainment

A night out with your friends is not an allowable business expense. We had one former client who spent a large sum of money in a “gentlemans club” – apparently, he was trying to get his contract extended and brought the Project Manager on a night out

I hope he got a rate rise in next renewal; we definitely won’t be explaining that one to the Revenue auditor!

Golf

Golf clubs, Golf club membership, Golf trips. Golf is a common thread with our clients, unfortunately it’s not possible to claim this as a business expense. While it’s a great way to network & do business it’s difficult to justify the wholly, exclusively for business needs and necessary test with Revenue. So, you will have to work on the handicap outside of business hours on this one!

Home improvements

Whilst improvements to a home office can be deemed allowable in certain circumstances, the purchase of fridge/freezers, wine cooler and a €3,000 kitchen table would certainly not be allowed by our friends in Dublin Castle- yep people have asked us! though we do like the idea of a wine cooler in the office!

Children’s Gifts

We have had some strange requests over the years, particularly at Christmas, these include Kids bicycles, PlayStation, Lego, and dollhouses…

Tax tip for Xmas, do not buy I pads, children’s bikes under the bike to work scheme, a 2nd I-phone or jewellery for your partner. If it’s not for the business, it’s not an allowable expense believe us!

Valentine’s Day

 Every year we have client’s going on “business trips” around the 14th of February, usually for the weekend to a conference. This is a big NO NO as it is something Revenue always looks out for!

TV’s

A curved TV… back when they cost €2k and certainly did not make the cut when described as a 2nd monitor for the laptop…. hmmm

Pet Food

Pet food for the company “guard dog”... That happens to be a whippet. We’re afraid that Fido’s dinner will have to come from your pocket instead

Teeth Whitening

Yepee have been asked! While your teeth will look beautiful on zoom, I doubt the taxman cares much for your pearly whites

(Very) Personal Subscriptions

When we say ‘subscriptions’ can be expensed we are talking about your Zoom subscription or professional body annual membership fees. Plenty of Fish & Grindr don’t count sorry folks and make for awkward conversations with your account manager – trust us!

Stay tuned for new updates and we will back with all new features again shortly. Icon Accounting the best Accountancy firms in Ireland