This week we were discussing with one of our new agencies who had moved from having his own back office and accountants to the TBOS model his first set of management accounts.
One of the things we were discussing with him was some of the take on figures shown on his opening trial balance to get a further understanding and breakdown. One of the points in question was the breakdown of his Director’s loan figure which seemed quite high for an agency of his size.
When we got the breakdown of the figures we found that a large number of business expenses regarding travel, subsistence and entertainment had been put to the wrong place by his previous bookkeeper and were not being declared as overheads. It appeared that the previous accountant had not given advice on allowable expenses so they did not believe they could go through the books causing the agency to miss out on claiming some VAT and Corporation Tax relief for the past 2 years.
TBOS discussed all the allowable expenses that could be claimed through the business and on review we managed to reduce the director’s loan account figure by more than 50%.