It can be challenging for partnership accounts to have a good account or bookkeeping service because of the initial investment that is required. The accounting for partnership accounts is similar to the services offered for the sole trader account. The main difference here is that because there are more owners, there is a need for a separate account to track each person’s distributions, investments, and shares of losses and gains. This means there will be a need for a partnership tax return as well as a separate tax return for each of the partners of the company.
The tax system is very complicated and difficult to understand with so many people making innocent mistakes that can cost a lot. So, let us take a little stress off your hands and handle these services for you:
Business Advice: To make your partnership business succeed, we will offer financial advice that may be difficult to find anywhere else. It will help in mapping out your business strategy to prepare for the future. By examining your books, our professionals will help in making sure that you cut down on excesses and help bring in a better profit.
Preparation of Tax Returns: It can be tasking communicating with HMRC while preparing tax returns and also trying to stay aware of the changes in tax law. We will take care of that for you, as well as the preparation of tax returns; both partnership and personal. As professionals in this field, we will ensure you only pay what is necessary and you are fully compliant with all the regulations.
Profit or loss allocation: There is a need to allocate profit or loss to a temporary income summary account before it is moved to the capital accounts after the books are closed for the accounting period. The computation of the capital accounts is based on the proportional ownership interests of each partner in the business.
Assets/Funds Contribution: When a partner in a business invests funds or assets into a partnership, the transaction is debited and credited to different accounts. For funds, it is debited to the cash account while assets are debited to the asset account that matches the nature of the contribution. For both of them (assets and funds), there should be a credit to the partner’s capital account.
Assets/Funds Withdrawal: When a partner withdraws assets or funds from a partnership account, it can be challenging to determine which account should be credited or debited. When funds are extracted from a partnership account, there should be a debit in the capital account of the partner and credit in the cash account. While in the case of an asset withdrawal, the credit should be to the account in which the asset was recorded and the debit should also be to the capital account of the partner.
Apart from the services offered, Reed & Co can offer a comprehensive accounting service for several accounts of businesses in Bristol and the surrounding areas. Outsource your accounting services to us and we will make sure you save a lot of unnecessary costs and time. To find out more about our services, contact us today.
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