At DRG Chartered Accountants, we work with many challenger consumer brands. Here Oliver Burton, our food and drinks specialist, answers some questions frequently asked by our fmcg entrepreneurs.
Should I consider producing a financial model?
We believe an integrated model (profit and loss, balance sheet and cashflow) is a great tool for managing a business and planning for growth, particularly working capital and cash flow management. We work with many of our clients to build two to five year projection models.
What monthly management information should a food and drinks business produce?
There is no one answer to what financial information a business requires and the answer will depend on the type of business and the stage it is at. However, we typically recommend at least a monthly profit and loss and balance sheet together with detail by channel / SKU plus other relevant KPIs.
How do I account for my direct to consumer sales?
Whether you are selling via an online marketplace such as Amazon or via your own website, you will need to use their financial reporting to correctly account for the revenue and fees deducted at source. Alternatively, you can look at using a bridging app to connect directly to your accounting software.
What accounting software do you recommend?
Typically, we work with Xero which is designed to be used by non-accountants. Xero is cloud based allowing for real time collaboration between you and us.
What other applications would you recommend looking at?
Depending on your specific needs, we work with ReceiptBank, Hubdoc, Unleashed, Futrli, A2X, GoCardless plus many other useful integrations.
What are the key financial compliance requirements of a limited company?
On an annual basis, companies are required to file year-end financial statements, a corporation tax return and a confirmation statement. VAT returns are typically required on a quarterly basis with payroll and auto enrolment filings each month.
How do I claim R&D tax credits?
R&D costs can be reclaimed as part of the corporation tax return. We work with our clients to identify relevant costs and produce the technical justification for the reclaim.
How will you help me when raising funds?
We support our clients throughout the fund raising process. on a wide variety of the area such as investor presentations, investment memorandum, capitalisation tables, SEIS / EIS compliance and filings and Companies House filings.
What is the value of my business?
Valuing a business is not a science and ultimately the valuation for the purposes of raising capital will be based on discussions and negotiations with potential investors. However, we can advise on appropriate valuations based on our experience and knowledge of the market.
If you have any further questions, please do not hesitate to get in touch with our food and drinks specialists, Oliver Burton or Michael Wood. We would be happy to discuss your business and explore ways in which we could help.
Further information
DRG's accounting services for food and drinks businesses
See what our food and drinks clients say
Download our brochure "Accountancy services for food and drinks businesses"
DISCLAIMER: This information is for guidance only, and professional advice should be obtained before acting on any information contained herein. We will not accept any responsibility for loss to any person as a result of action taken or refrained from in consequence of the contents of this publication.
