Presentation to NEWS, 2nd August 2010: Setting up a simple bookkeeping system

1. Setting up a simple bookkeeping system
Emily Coltman ACA
www.freeagentcentral.com
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2. Contents
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3. Contents
• What records MUST you keep?
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4. Contents
• What records MUST you keep?
• Information you should be able to see
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5. Contents
• What records MUST you keep?
• Information you should be able to see
• Systems
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6. Contents
• What records MUST you keep?
• Information you should be able to see
• Systems
• Paperwork
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7. The taxman says...
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8. The taxman says...
• Tax return “fully and
accurately”
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9. The taxman says...
• Tax return “fully and
accurately”
• Minimum:
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10. The taxman says...
• Tax return “fully and
accurately”
• Minimum:
- Record of sales
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11. The taxman says...
• Tax return “fully and
accurately”
• Minimum:
- Record of sales
- Record of purchases
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12. The taxman says...
• Tax return “fully and
accurately”
• Minimum:
- Record of sales
- Record of purchases
• Be prepared to answer
their questions!
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13. Suggestions (1)
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14. Suggestions (1)
• Cash book
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15. Suggestions (1)
• Cash book
• Petty cash book
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16. Suggestions (1)
• Cash book
• Petty cash book
• Sales and purchase
ledger
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17. Suggestions (1)
• Cash book
• Petty cash book
• Sales and purchase
ledger
• Wages book
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18. Suggestions (1)
• Cash book
• Petty cash book
• Sales and purchase
ledger
• Wages book
• Invoices and receipts
issued and received
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19. Suggestions (2)
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20. Suggestions (2)
• Electronic records of
sales
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21. Suggestions (2)
• Electronic records of
sales
• Items not through till
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22. Suggestions (2)
• Electronic records of
sales
• Items not through till
• Miscellaneous income,
e.g. rental
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23. Suggestions (2)
• Electronic records of
sales
• Items not through till
• Miscellaneous income,
e.g. rental
• HP and leasing details
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24. Suggestions (2)
• Electronic records of
sales
• Items not through till
• Miscellaneous income,
e.g. rental
• HP and leasing details
• Stock at end of year
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25. Suggestions (3)
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26. Suggestions (3)
• Bank statements
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27. Suggestions (3)
• Bank statements
- Business bank account not
a requirement but strongly
recommended
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28. Suggestions (3)
• Bank statements
- Business bank account not
a requirement but strongly
recommended
• Money out for personal
use
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29. Suggestions (3)
• Bank statements
- Business bank account not
a requirement but strongly
recommended
• Money out for personal
use
• Money in from personal
source
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30. The taxman says...
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31. The taxman says...
• Businessyears = keep
up to 6
records
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32. The taxman says...
• Businessyears = keep
up to 6
records
• Paper or computer
records
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33. The taxman says...
• Businessyears = keep
up to 6
records
• Paper or computer
records
- Computer must show
front and back and be
easily readable by HMRC
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34. VAT-registered?
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35. VAT-registered?
• No set method
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36. VAT-registered?
• No set method
• Strict rules about VAT
invoices
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37. VAT invoices
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38. VAT invoices
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39. VAT invoices
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40. VAT invoices
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41. VAT invoices
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42. VAT invoices
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43. VAT invoices
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44. VAT invoices
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45. VAT invoices
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46. VAT invoices
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47. VAT invoices
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48. VAT invoices
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49. VAT account
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50. VAT account
• VAT due
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51. VAT account
• VAT due
• Less VAT claimable
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52. VAT account
• VAT due
• Less VAT claimable
• To show VAT paid
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53. Companies House say...
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54. Companies House say...
• Must keep records
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55. Companies House say...
• Must keep records
• No set format
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56. Companies House say...
• Must keep records
• No set format
• Additional requirements:
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57. Companies House say...
• Must keep records
• No set format
• Additional requirements:
- Letterheaded paper
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58. Companies House say...
• Must keep records
• No set format
• Additional requirements:
- Letterheaded paper
- All documents sent
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59. Information: Profit
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60. Information: Profit
• Expenses > income?
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61. Information: Profit
• Expenses > income?
• More customers?
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62. Information: Profit
• Expenses > income?
• More customers?
• Higher prices, lower
costs?
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63. Information: Profit
• Expenses > income?
• More customers?
• Higher prices, lower
costs?
• Expensive projects?
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64. Information: Cashflow
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65. Information: Cashflow
• Enough money?
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66. Information: Cashflow
• Enough money?
• Credit control
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67. Information: Cashflow
• Enough money?
• Credit control
• How much tax and when?
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68. Information: Cashflow
• Enough money?
• Credit control
• How much tax and when?
• Paying suppliers
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69. Information: Cashflow
• Enough money?
• Credit control
• How much tax and when?
• Paying suppliers
- Too fast or too slow?
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70. System choices
• Paper
• Spreadsheet
• Desktop package
• Online software
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71. Paper
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72. Paper
• Works well if:
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73. Paper
• Works well if:
- Business is tiny
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74. Paper
• Works well if:
- Business is tiny
- Calculator-savvy
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75. Paper
• Works well if:
- Business is tiny
- Calculator-savvy
- Don’t like computers
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76. Paper
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77. Paper
• Disadvantages:
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78. Paper
• Disadvantages:
- Time-consuming
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79. Paper
• Disadvantages:
- Time-consuming
- Error-prone
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80. Paper
• Disadvantages:
- Time-consuming
- Error-prone
- Calculations
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81. Paper
• Disadvantages:
- Time-consuming
- Error-prone
- Calculations
- Annual gap
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82. Paper
• Disadvantages:
- Time-consuming
- Error-prone
- Calculations
- Annual gap
- No business information
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83. Paper
• Disadvantages:
- Time-consuming
- Error-prone
- Calculations
- Annual gap
- No business information
- Accountant = bean-counter
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84. Spreadsheet
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85. Spreadsheet
• Works well if:
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86. Spreadsheet
• Works well if:
- Used to them
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87. Spreadsheet
• Works well if:
- Used to them
- Able to spot errors
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88. Spreadsheet
• Works well if:
- Used to them
- Able to spot errors
- Not many transactions
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89. Spreadsheet
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90. Spreadsheet
• Disadvantages:
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91. Spreadsheet
• Disadvantages:
- Time-consuming
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92. Spreadsheet
• Disadvantages:
- Time-consuming
- Versioning
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93. Spreadsheet
• Disadvantages:
- Time-consuming
- Versioning
- Error-prone
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94. Spreadsheet
• Disadvantages:
- Time-consuming
- Versioning
- Error-prone
- Updating
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95. Spreadsheet
• Disadvantages:
- Time-consuming
- Versioning
- Error-prone
- Updating
- No meaningful information
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96. Spreadsheet
• Disadvantages:
- Time-consuming
- Versioning
- Error-prone
- Updating
- No meaningful information
- Accountant = bean-counter
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97. Desktop package
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98. Desktop package
• Works well if:
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99. Desktop package
• Works well if:
- Business is larger
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100. Desktop package
• Works well if:
- Business is larger
- Used to them
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101. Desktop package
• Works well if:
- Business is larger
- Used to them
- No or slow broadband
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102. Desktop package
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103. Desktop package
• Disadvantages:
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104. Desktop package
• Disadvantages:
- Backup exchange
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105. Desktop package
• Disadvantages:
- Backup exchange
- Support = £££
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106. Desktop package
• Disadvantages:
- Backup exchange
- Support = £££
- Upgrades = £££
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107. Online software
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108. Online software
• Works well if:
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109. Online software
• Works well if:
- Happy online
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110. Online software
• Works well if:
- Happy online
- Good broadband
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111. Online software
• Works well if:
- Happy online
- Good broadband
- Share data with accountant
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112. Online software
• Works well if:
- Happy online
- Good broadband
- Share data with accountant
- Accountant = trusted
adviser
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113. Online software
• Works well if:
- Happy online
- Good broadband
- Share data with accountant
- Accountant = trusted
adviser
- Daily real-time information
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114. Online software
• Works well if:
- Happy online
- Good broadband
- Share data with accountant
- Accountant = trusted
adviser
- Daily real-time information
- Small business
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115. Online software
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116. Online software
• Disadvantages:
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117. Online software
• Disadvantages:
- Needs Internet
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118. Paper records
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119. Paper records
• Lever-arch pockets
and punch
files, dividers
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120. Paper records
• Lever-arch pockets
and punch
files, dividers
• Files for each kind of
record
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121. Paper records
• Lever-arch pockets
and punch
files, dividers
• Files for each kind of
record
• Keep ALL pieces of paper
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122. Paper records
• Lever-arch pockets
and punch
files, dividers
• Files for each kind of
record
• Keep ALL pieces of paper
- HMRC are out there!
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123. Paper records
• Lever-arch pockets
and punch
files, dividers
• Files for each kind of
record
• Keep ALL pieces of paper
- HMRC are out there!
• Note lost papers
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124. Scanned records
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125. Scanned records
• Scanner such as Doxie
www.getdoxie.com
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126. Scanned records
• Scanner such as Doxie
www.getdoxie.com
• Scan front and back
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127. Scanned records
• Scanner such as Doxie
www.getdoxie.com
• Scan front and back
• Online backup such as
www.depositit.com
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128. Demo
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