An uncomfortable silence spread through the board room as the directors mulled over the presented year end financials until the managing director spoke up with a strong rhetorical question… “Why have we produced a seventy thousand euro loss?”
About fourteen months previously the company had some cash flow problems and thought the best way to deal with them was to cut back on their overheads or as we refer to in the business, non-value adding activities and unfortunately for this company, that included the management accounting & reporting!
Obviously, the reduced overheads left the company in a better position but they weren’t able to tell because they didn’t have up-to-date management reports. Now, don’t get me wrong on this, the client were by no means stupid. They were senior qualified professionals with multiple years of business experience behind them but this doesn’t mean that they were management accounting experts!
After finishing the meeting I felt compelled to write this article as it really brought home to me the value of the management accounting and management reporting work that I do. The non-value adding activities have some value after all!
The point is that year end financial statements are produced months after the end of the financial year. Therefore, the reports produced are history. The value of the information from them will only cause heart ache or vanity from a director’s point of view. If the company had continued to invest in their management accounting and management reporting structure, they could have tackled the problems within days of them happening. If corrective action was taken, they would have reduced the loss and possibly produced a profit. After all, isn’t that what they are employed to do?!
Revenue has issued a further warning to taxpayers to be vigilant of individuals claiming to be Revenue officials and seeking personal information (e.g. PPSN numbers or addresses, details of earnings) and/or demanding payment of tax. Readers are advised that, if they receive a telephone call purporting to be from Revenue, or receive an email or other contact demanding payment, of about which they have doubts, they should contact their local Revenue Office or Revenue’s Collector General’s Division.
October 31st 2010 is the deadline for the self employed, Directors and people declaring other forms of income outside of PAYE, for example, Investment rental properties!
The reason why I’m writing this article is as follows, I have been a practicing accountant for over eight years and every year I am baffled by the amount of people that come to me in a panic on or around the 31st Oct, needing to complete their tax returns from the previous year. Yes, you read correctly, from the previous year!
This means that the 31st Oct 2010 is the deadline for all worldwide incomes to be declared to the Revenue Commissioners for the year ending 31st December 2009. Therefore, you have ten months to get your act together.
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Posted in Advices
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Tagged accountant, budget, income tax, income tax deadline, incomes, oct 31st, rental properties, revenue commissioners, tax, tax adviser, tax planning, tax return, tax returns
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The phone call
One lunch time while sitting down to have a well deserved cup of freshly ground coffee, my phone rang. I answered it and I started a conversation with a young man who was obliviously uncomfortable with the whole idea of dealing with a tax advisor. Let’s call him ‘M’!
M had come to me as a referral from existing income tax client. He owned an investment property and didn’t know how to deal with the tax situation. He searched on the internet and visited all the chat rooms and got a list of different answers as long as his arm. The pinnacle came when a colleague from work, some years older than himself heard about his situation and informed him that, “he’d have to pay a bucket load of tax…” Of course, this response led him to a number of sleepless nights until a friend (my client) gave him my number and told him to go and have a chat with me.
The above is a classic situation of numerous phone calls that I receive. Where people have worried themselves and missed numerous hours of sleep worrying about a situation that can be rectified (almost!) by a phone call to a friendly tax advisor or accountant. The hardest thing is making that call!
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Posted in Advices
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Tagged accountant, income tax, income tax bill, income tax computation, income tax return, incomes, investment property, revenue commissioners, tax, tax return, tax returns, tax situation
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