It might seem obvious, but in managing a business, it is important to understand how the business makes a profit. A company needs a good business model and a good profit model. A business sells products or services and earns a certain amount of margin on each unit sold. The number of units sold is the sales volume during the reporting period. The business subtracts the amount of fixed expenses for the period, which gives them the operating profit before interest and income tax. Profit equals sales revenue minus expenses.

Budgeting provides important advantages, like understanding the profit dynamics and the financial structure of the business. A well-designed management profit and loss report provides the essential framework for budgeting profit. It's always a good idea to look ahead to the coming year. Plugging the numbers in the profit report for sales volume, sales prices, product costs and other expenses, projects the profit for the coming year. Accounting has been defined as, by Professor of Accounting at the University of Michigan William A Paton as having one basic function: "facilitating the administration of economic activity”. According to him, this function has two closely related phases:

1) Measuring and arraying economic data.

2) Communicating the results of this process to interested parties.

Much of accounting though is also concerned with basic bookkeeping. This is the process that records every transaction. But the owners of the company, which can be individual owners or millions of shareholders, are most concerned with the summaries of these transactions, contained in the financial statement. The financial statement summarizes a company's assets. A value of an asset is what it cost when it was first acquired. The financial statement also records what the sources of the assets were. Some assets are in the form of loans that have to be paid back. Profits are also an asset of the business. Therefore, irrespective of the size of company, you need to prepare annual accounts. Accounts need to be submitted to the Inland Revenue and companies house nine months after the year end. Failure on this matter leads to fines, penalties and interest on late tax. It may also lead to criminal prosecution by companies’ house.

Any company accounts are typically 12-15 pages long and depending on the size of business must disclose certain information by law. They are prepared based on historical cost convention utilizing accruals and prepayments. The Tax is calculated differently and therefore it is essential you have a working knowledge of what is tax deductible and what isn’t. Assets are also treated differently and allowances and more favourable in the 1st year.

Costs typically depends on the size of Business or condition of the records however at NVK Group Ltd we are offering a fixed price deal on businesses with a turnover of £250,000 or less at 45.00 per month. This type of deal is unique to NVK Group Ltd and cannot be found anywhere else in the UK . Universal accounts package suits all users! The Accounts package takes care of the following:

• Accounts prepared

• Submitted to HM Revenue & Customs

• Company tax return prepared

• Tax advice to minimise tax

• Adjustments given back for year end

• All reconciled and go into no further detail

This package is ideal for many small businesses, an efficient effective service at an economic price. So no matter what type of company you run from a shop, to a firm of consultants this package could ideally suit you. Please contact us to see testimonials from many of our satisfied clients already saving on accountancy fees. Our package is based on the basic accounting equation:

Assets = liabilities + owner's equity.

Here, the assets are the balance sheets accounts that represent the things of value owned by the company; liabilities are what the company owes the creditors; and the equity is the net worth of the company. Equity is also called owner's equity or capital. Equity comes from investment in the business by the owners, plus accumulated net profits of the business that have not been paid out to the owners. It essentially represents amounts owed to the owners. Equity accounts are balance sheet accounts.

The financial statement called the balance sheet is based on the "accounting equation."