Newbie Accounting question
Discussion
I'm an accounting virgin and would appreciate your help.
Have just started trading and initially will keep records in an Excel spreadsheet.
What I would like to know if you peeps are able to help is....
Do I need to enter in the spreadsheet every single transaction, ie every sale, every expense or can I summarise, ie for months June sales where £xx and expenses where £xx but obviously keeping all the associated paperwork that make up the figures for future inspection (will the accountant need to see all the receipts/expenses etc at year end)
Cheers, for your help
John
PS. I'm soletrading
>>> Edited by jgmadkit on Thursday 24th June 18:00
Have just started trading and initially will keep records in an Excel spreadsheet.
What I would like to know if you peeps are able to help is....
Do I need to enter in the spreadsheet every single transaction, ie every sale, every expense or can I summarise, ie for months June sales where £xx and expenses where £xx but obviously keeping all the associated paperwork that make up the figures for future inspection (will the accountant need to see all the receipts/expenses etc at year end)
Cheers, for your help
John
PS. I'm soletrading
>>> Edited by jgmadkit on Thursday 24th June 18:00
The main thing you have to do is keep all the underlying original documentation. That means if you lose any of your summaries, at least the original invoices, vouchers etc still exist and it could all be reconstructed from scratch if necessary. Keeping full records is also a legal requiremebt under Self Assessment.
Paperwork to keep:
Bank statements
Bank Paying In Books
Cheque Stubbs
Credit Card Statements
Purchase/Expense invoices, receipts and vouchers
Sales/Fee Invoices
Till Rolls (if you operate cash registers)
Summaries you should make
I) summaries of your sales invoices
ii) summaries of your expenses/purchase invoices
iii) summaries of your bank receipts
iv) summaries of your bank payments
You should also analyse out your expenditure into relevant expense headings - purchases, insurance, motor expenses, light and heat etc etc
Even more detail might need to be maintained if you are VAT registered.
Hows that for starters?
In actual fact, most accountants can put together a decent set of accounts even if all of the above work has not been vcarried out by the client - but the more you do, the more of a handle you have on how well your business is doing and maybe you might receive lower accountancy fees (although that's NEVER guaranteed
).
Paperwork to keep:
Bank statements
Bank Paying In Books
Cheque Stubbs
Credit Card Statements
Purchase/Expense invoices, receipts and vouchers
Sales/Fee Invoices
Till Rolls (if you operate cash registers)
Summaries you should make
I) summaries of your sales invoices
ii) summaries of your expenses/purchase invoices
iii) summaries of your bank receipts
iv) summaries of your bank payments
You should also analyse out your expenditure into relevant expense headings - purchases, insurance, motor expenses, light and heat etc etc
Even more detail might need to be maintained if you are VAT registered.
Hows that for starters?
In actual fact, most accountants can put together a decent set of accounts even if all of the above work has not been vcarried out by the client - but the more you do, the more of a handle you have on how well your business is doing and maybe you might receive lower accountancy fees (although that's NEVER guaranteed
).Thanks Eric thats very helpful. You hit the nail on the head when you say about keeping on top of things. I certainly want to know how my business is doing financially at any given time so I guess keeping full records of every transactioin is the full proof way. I'm fairly adept at spreadsheets so I'll knock something up. Would there be any benefit in getting an accountant now or just wait until year end?
Cheers, John
Cheers, John
Although I am biased, I would recommend getting hold of an accountant at the earliest possible opportunity.
There are usually issues that you might need to be considering right from the outset,
For instance -
have you decided on an accounting financial year end date?
will you need to register for VAT?
do you need to put money aside to cover future tax bills?
will you need to take on staff?
have you notified the Inland Revenue that you are Self Employed? (you have three months from the date you started to let them know, otherwise you will be fined).
have you sorted out your Class 2 National Insurance payments yet?
All these things might need to be looked at well in advance of completing your first set of trading accounts and Self Assessment tax return.
>> Edited by Eric Mc on Friday 25th June 15:12
There are usually issues that you might need to be considering right from the outset,
For instance -
have you decided on an accounting financial year end date?
will you need to register for VAT?
do you need to put money aside to cover future tax bills?
will you need to take on staff?
have you notified the Inland Revenue that you are Self Employed? (you have three months from the date you started to let them know, otherwise you will be fined).
have you sorted out your Class 2 National Insurance payments yet?
All these things might need to be looked at well in advance of completing your first set of trading accounts and Self Assessment tax return.
>> Edited by Eric Mc on Friday 25th June 15:12
Also take a look at www.businesslink.gov.uk. Lots of good advice for starting up your business on there. I went through this a few months ago, starting up as a book-keeper.
Make sure you register as self-employed with the IR asap - they are actually very helpful and they even run workshops (local and free) to help you out with different areas you may need to think about, such as payroll, accounting, tax etc.
Good luck !
(and don't forget to get your free entry in Yellow Pages as well !)
Make sure you register as self-employed with the IR asap - they are actually very helpful and they even run workshops (local and free) to help you out with different areas you may need to think about, such as payroll, accounting, tax etc.
Good luck !
(and don't forget to get your free entry in Yellow Pages as well !)
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