What can an Accountant do for a small business?

WantToBeSE

cazziebo wrote: »

Looking at some of the OP's previous threads, it looks like this is a cleaning company. This suggests there are existing employees and contracts. There may be TUPE considerations, and there may be contract clauses which affect any change of ownership.

Specialist expert advice is needed.

Thanks Cazzie


yes its a VERY small cleaning company. Small means TINY in this case, its just me (self-employed) and 1 employee at the present time.


The lady who started the business (and currently runs it) is going over the basic stuff with me (showing me the books) and has already showed me the last 12 months accounts. It only makes a very small profit at the moment, mainly due to such little staff. It'll probably never be a huge business, just enough to employ 4 people. Nothing really very complicated involved.

WantToBeSE

pleasedelete wrote: »

If you are going for a personal mortgage etc in the future then you may need accountant verified accounts.

Thanks PD. No, I am not considering going for a personal mortgage any time soon.

weatherlobe

I can speak here with a certain amount of knowledge as I run a well established Accountancy Practice and my wife runs a Cleaning Business.


Over the years I have had to cast my eye over a number of similar businesses she thought of buying and there were snags with most of them.
Control is one matter - it is best that the prospective business is close to where the OP lives as staff control is a very important factor which is difficult to manage from afar as when the cats away the mice will play!
As someone has already said the staff have to be TUPED over (ie with the same Terms of Pay etc) and then managed in house. The same rule applies if you win a Cleaning Contract from a previous Contractor.
Again ensure the Staff are all on PAYE and given Holiday pay rights, the Company is VAT registered if over the appropriate turnover threshold etc as it has been my experience that many smaller Cleaning Companies pay scant regard to such matters often paying their workers cash in hand.

WantToBeSE

weatherlobe wrote: »

I can speak here with a certain amount of knowledge as I run a well established Accountancy Practice and my wife runs a Cleaning Business.


Over the years I have had to cast my eye over a number of similar businesses she thought of buying and there were snags with most of them.
Control is one matter - it is best that the prospective business is close to where the OP lives as staff control is a very important factor which is difficult to manage from afar as when the cats away the mice will play!
As someone has already said the staff have to be TUPED over (ie with the same Terms of Pay etc) and then managed in house. The same rule applies if you win a Cleaning Contract from a previous Contractor.
Again ensure the Staff are all on PAYE and given Holiday pay rights, the Company is VAT registered if over the appropriate turnover threshold etc as it has been my experience that many smaller Cleaning Companies pay scant regard to such matters often paying their workers cash in hand.

Thanks for that
The business premises will be a 20min drive from my house, but that lease is up just after Christmas so then I will be running it from my own house.
Yes, the 1 current employee will be TUPED over and I am aware that I'll need to pay holiday/sickness pay etc. The staff member is on PAYE and the company doesn't deal with cash in hand work.

Savvy_Sue

WantToBeSE wrote: »

Thanks for that
The business premises will be a 20min drive from my house, but that lease is up just after Christmas so then I will be running it from my own house.

Do make sure that the lease is properly ended by the previous owner and that no liability transfers to you with the business.

For example, if there's a clause in the lease to say that the tenant is responsible for leaving the premises in the same condition as when they moved in, you don't want a bill in a month's time asking you to pay for redecoration, repairs or new carpets.

Same with any contracts for utilities and especially waste disposal.

This is the kind of thing which can catch people out when taking over an established business, and is why we recommend professional advice so strongly.

Pennywise

Is the running being run as a sole trader or a limited company? If a limited company, are you buying the limited company or the business? If you're buying the limited company, you take over everything warts and all, so if the previous owner hasn't paid his tax or has made mistakes on his tax returns, you'd be liable once you own the limited company!

Are you taking over their HMRC employer's paye scheme or are you setting up a new scheme? Again, if you take over the old scheme, you become liable if anything was wrong.

Same with VAT, if you take over their VAT number, you take over their VAT history, so again, if VAT returns were wrong or weren't paid, you take over their liability and HMRC will come knocking on your door.

Looking forward, are you running it as a sole trader or limited company? Do you know the pros and cons of the differences?

Do you know your options for choice of your business year end - there are opportunities for a sole trader to save tax or defer tax by choosing a year end that doesn't coincide with 5th April or the anniversary of the business.

If you're paying for goodwill in the purchase price, do you know the difference in tax relief between whether you operate as a sole trader or as a limited company?

Those are just a few "bread and butter" topics that any decent accountant deals with day in and day out that could save you far more than they'd cost you!