December 2014

All posts from December 2014

Storing your documents safely and securely

by George Granville on December 12, 2014

Each time we update your accounting data we upload the latest management accounts and reports to our secure online document storage. There is also the facility for you to upload some or all of your accounting data and documents for Drummond to process. You can access your accounting information, payroll documents and correspondence with Drummond 24 hours a day 7 days a week, wherever you are in the world, when you log on to our online server.

The secure document exchange is password controlled and permission based. There is no limit to the number of employees who can have access rights and all permissions are controlled by you. You can regulate specific access restrictions in terms of which content is viewable by each user and who can upload and download files.

There are no limits on file size, so you can save, upload, download and send files of any size without any interruptions or hesitations. You can also save your own internal files and either share them with Drummond or just simply store them online and have access to them whenever and wherever you want.

Whether you’re abroad or in your office as long as you have an internet connection on your computer or phone you can access all of your business’s important documents quickly and safely.

read more
George GranvilleStoring your documents safely and securely

How our accounting software works

by George Granville on December 12, 2014

At Drummond we maintain your company accounts on our multi company version of Sage Line 50. We make sure all of your data is securely stored and backed up on a regular basis.

Drummond is a member of the Sage Accountants Club and we automatically receive the latest software updates as well as well as specialist support reserved for accountants from Sage.

For our clients this means that there are no accounting software acquisition costs and software updates or support issues to consider. Your business will also benefit from not having the requirement to directly employ staff with the necessary accounting skills. By outsourcing to Drummond your business you will no longer have to arrange for sickness or holiday cover neither will you have to consider staff development and training.

Drummond can work with you if you would prefer to process and maintain your accounts on your own server, using your own copy of Sage software. By utilising Sage Accountant’s Link we can work remotely on your accounting data from our own office in Plymouth. Accountant’s Link is designed to allow our clients to continue working with their copy of Sage Line 50 at the same time as we are processing your accounting data and updating your management accounts.

At Drummond we are not restricted to working with Sage Accounting software – if you would prefer to work with different accounting software provider please get in touch.

read more
George GranvilleHow our accounting software works

Seven key accounting ratios for your business

by George Granville on December 12, 2014

The best way to analyse accounting information and comparing it over different time periods or with different businesses is to use an array of accounting ratios. These are used as a way of highlighting the relationship that exists between figures in a set of accounts as an aid to evaluating business performance and predicting future trends.

There are seven key ratios for your business:-

Gross Profit Ratio is the most commonly used ratio where gross profit is measured as a percentage of sales.

Net Profit Ratio is similar to the gross profit ratio but looks at net profit as a percentage of turnover.

Current Ratio reflects the balance sheet relationship between current assets and current liabilities. It is a useful indicator of a business’s ability to meet its liabilities as they fall due.

Liquid Ratio or Acid Test is the same as the Current Ratio except only liquid assets ie cash and other assets capable of being quickly converted into cash are included as well as all the current liabilities.

Debtors Ratio indicates the average length of time customers are taking to pay the invoices.

Creditors Ratio indicates the average length time the business is taking its suppliers. It tends to be more useful when you are looking at taking on a customer as it will give an idea on their speed of payment.

Gearing Ratio indicates the proportion of long term liabilities to the total capital of the business.

Return on Capital Employed measures the net profit as a percentage of the net worth of the business. The net profits are shown on a balance sheet and are calculated as total assets less liabilities. This represents the amount of capital that has been invested in the business.

If you would like more information on the application of forecasting and on using financial ratios to analyse your business please contact Drummond to arrange for more in depth information.

read more
George GranvilleSeven key accounting ratios for your business

Forecasting and Management Accounts

by George Granville on December 12, 2014

Forecasts are an essential part of the financial planning for your business. Drummond can work with you to prepare forecasts that run over the next one to three years. We will include in these forecasts as much detail as is appropriate to where you are in the business cycle and the complexity of your business.

Sales forecasts will largely be prepared by you the business operator. However we will review these with you and make sure the timings are realistic and that suitable provision has been made for slippage and sales falling away

Drummond can prepare Cash-flow statements showing your cash balance and cash-flow patterns for the following 12 to 18 months. The cash-flow statement will identify whether you will have sufficient working capital and will take into consideration key factors such as the timing of income and outgoings such as salaries, VAT and PAYE and loan repayments.

We can incorporate ‘what-if’ scenarios into the cash-flow to demonstrate the effects of over or under achieving on your sales targets or what happens to your working capital requirements should you increase the size of your payroll for example in order to meet those targets.

Working with the information from the Sales and Cash-flow forecasts Drummond can provide you with projected Profit and Loss Statements and Balance Sheets. Alternative Projections for the same point in time can be prepared using the different scenarios allowed for in your cash-flow forecasts.

Drummond’s financial forecast looks at where a business will be in the short to medium term against a given set of scenarios. These different scenarios may include any combination of an increase or decrease in sales as well as increases or decreases in overheads or costs of goods sold.

Using cash flow forecasts, projected profit and loss statements and balance sheet projections can be prepared. By utilising these reports your business will be equipped for more detailed projections on further specific areas of the business.

Drummond can formulate these forecasts for your business so that you are able to plan and prepare for future possible outcomes. With this information you will be in a position to get your business financial requirements in place in advance, before you have cash flow shortages.

read more
George GranvilleForecasting and Management Accounts

Looking for Multi Currency Bookkeeping? Drummond has the answer

by George Granville on December 12, 2014

Drummond provides bookkeeping and management reporting for business using foreign currency bank accounts including PayPal.

We can support as many different currencies as you would like and we can account for trades using sterling exchange rates as well as trades between foreign currencies themselves.

All accounting operations revert back to GBP, the base currency for your accounts, and exchange rate differences are recorded in your Profit and Loss statement. Your non sterling bank accounts are re-valued monthly as part of the month end routine.

Drummond can issue your sales invoices in the currency of your choice for your overseas customers. These sales invoices are entered into your accounts in GBP, your ‘base’ currency, using the most up to date HMRC exchange rates at time of issue to make sure you are VAT compliant.

read more
George GranvilleLooking for Multi Currency Bookkeeping? Drummond has the answer