Accounts help needed

[carlsbitsandbobs]

Hi All,

I am a sole trader and cant afford an accountant at the moment.

I started trading on the 4th september 2009.

I have now got to do the accounts which I have not been on top of (mistake number 1 I know) and I have lost some invoices for online purchases and from what I have read online that I should record everything by invoice date not payment date. However I am able to get all bank statements which shows all transactions on it. most of the the payments was made the same day the invoices were sent.

What is the easiest way to do the accounts as a sole trader(i will be using the diy accounts package for 9-10 tax year and 10-11 tax year) ?

Obviously the tax year 09-10 will only be for 7 months trading which isnt a great deal of turnover.

Also how do I record pre start expenses for the business such as cost of sale (i.e purchasing goods) as I started to get stock about 2 months before I started.

My 2nd question is...

What is the best way to record stock written off that was not selling/damaged and in turn was dumped(we all make mistakes when starting a business) ?

Lastly whats the best way to record stock taken for personal use ? is it best to input it as a sale then as drawings or just to record it as drawings ?

I dont want to go wrong with the tax man although I probably already have done but hope there is a way of correcting this and avoiding a penalty.

I look forward to any advice that is offered.

 

[Philip Hoyle]

Re the missing invoices, can you not do a screen print from the website that you ordered the stuff from - try to get whatever you can - as long as there aren't too many missing invoices and they're not for huge amounts or unusual items, you should be fine with the bank statement as proof.

Re the "DIY Accounts" package - I'm not sure which you mean - presumably it's something you've bought and should come with instructions, help files, etc in its use. Generally, all accs packages are similar in that they help you record, for both ins' and outs', the date of the transaction, the date it was paid, who it was with, what it was for, etc. You need to set up different "bank" accounts for each different way of payment, i.e. one for your personal "pocket", i.e. your own money, one for the business current account, one for a business credit card, etc etc., - that is essential for you to properly track the ins and outs and prove or "reconcile" against the bank/cc statements. Your computer system must show the same bank balances as your paper statements, adjusted of course, for items in transit, i.e. a cheque you've raised but which hasn't been cleared. There's no easy way if you're so far behind - you have to start at the beginning and work forward, doing say a month at a time, checking it balances against bank statements each month end, then moving onto the next month.

The usual protocol for money spent in advance of trading is to record them in your "Books" as the first day of trading - presumably you paid privately so the payments are out of the "personal" bank account you've set up in your system.

Re stocks, anything thrown or given away is automatically adjusted as it's shaken out when you adjust for your closing stock - it won't be included in your closing stock as it's not there, so it is automatically written off in the accounts. Remember you have to adjust for closing stock at the end of the first trading period, and then adjust for both opening and closing stocks for each subsequent period. Stock bought isn't an expense until you actually sell it - If you buy £10k of stock and sell £1k of it, then your "cost of sales" in your accounts is only £1k and the remaining £9k is carried forward to future years.

For stocks used yourself, you need to do a "journal" for the cost of the items used - i.e. Dr drawings, Cr cost of sales - you can do this per item, or weekly or monthly - whatever suits you best.

 

[Blackberry]

have you actually contacted any accountants for a quote? You might be suprised that it may not cost as much as you think!

 

[carlsbitsandbobs]

Thanks for the reply I cant get a screen shot. It was for ebay fees (which I no longer have the ebay account as closed it thinking I had everything) and a couple for an online shop I used to have which again I no longer have.

Luckily these are recorded on the bank statement as ebay & The online shop providers name so I hope I will be ok.

I am going to get my accounts done bit by bit over the next few months and find a reasonable priced accountant to check over them all for me and reconcile the accounts to ensure they are done properly as I have used a mix between bank accounts used for everything and I now have a second account in my personal name that I use so should be easier for me to do the other accounts at the end of the next trading year.

Cheers

Carl

 

[mung]

hi there,

Just get an online package such as Contraccounts, this focuses on sole traders/freelancers, its pretty cheap and will work the lot out for you

 

[Williams lester]

hi there,

Just get an online package such as Contraccounts, this focuses on sole traders/freelancers, its pretty cheap and will work the lot out for you

Using an accounts package, whether online or otherwise, is a start, but you still need to know what is claimable and what isn't, where each item should go in the accounts etc., which is where an accountant can help you.

 

[carlsbitsandbobs]

Thanks for the reply.

I did contact an accountant from here(on another account I had on the forums and lost the details for) although I cant remember the exact figure I think it was around £50 a month which at the time wasnt viable for me to pay out on such a low turnover at the time.

However I am going to look for a local accountant and get some quotes and see if they can suggest a package for me and help me get my 1st years accounts done the best way possible from a folder of invoices and receipts.

I know this will cost more if they will agree to it.

Does anyone know how much this sort of service will roughly cost ?

Thanks

 

[Williams lester]

It will depend on how many transactions you have, how much you will be doing and how much you expect the accountant to do etc etc....

You may find that an online accountant will be cheaper depending on finding the right one, there are a few on here who offer online services, apart from us there are, Jenni from Farrant Frost, Elaine of Cheap Accounting, Nicola at MyAccountantOnline and maybe a few more.

 

[Williams lester]

Just to add, if you let us know where you are you may get a recommendation for a local accountant or you may even be close to one of the online accountants!

 

[carlsbitsandbobs]

Thanks to the replies.

I am in Grimsby (north east lincolnshire)

I would need all my accounts to be created from a folder of reciepts and invoices for the 1st year and would also like an accounts package suitable for a newbie to understand that the accountant uses...so That from the start of year 2 I could continue to do my own accounts and just have them reconciled and adjusted by an accountant I am able to do the SA for HMRC my self online.

Thanks

 

[DIY Accounting]

What is the easiest way to do the accounts as a sole trader(i will be using the diy accounts package for 9-10 tax year and 10-11 tax year) ?

Are you using DIY Accountings Basic Sole Trader package? this is the simplest (and cheapest) package we do.

You should be able to record reasonable pre-commencement expenses in the same set of accounts. If you were just trading for 7 months of the first period you have to report on wouldn't you're pre-commencement expenses be in the same period?

What is the best way to record stock written off that was not selling/damaged and in turn was dumped(we all make mistakes when starting a business) ?

Stock written off will just be a cost (from the purchase) with no sale. Diy accounting has a tab in Purchases050411.xls "Stock" where you can record the value of stock estimates after a stock take.

As for stock taken for personal use. It's easier if you could avoid putting the purchase through the business. Put only a portion of the purchase of the stock through. You can make a note on the invoice or bank statement if that's all you have. This is just a personal note to remind you why the lower purchase was recorded. I would expect this to be a problem as it shows a lot of honesty.

 

[carl.robertson]

Are you using DIY Accountings Basic Sole Trader package? this is the simplest (and cheapest) package we do.

You should be able to record reasonable pre-commencement expenses in the same set of accounts. If you were just trading for 7 months of the first period you have to report on wouldn't you're pre-commencement expenses be in the same period?

Thanks Yes I am sure they would be as it is the same tax year but the expenses was 2 months before I started trading and before I was registered.

I am not using DIY accounts at present but I was looking to use them to save some money in year 2 but as for 1st years trading will have to maybe get an accountant.

Stock written off will just be a cost (from the purchase) with no sale. Diy accounting has a tab in Purchases050411.xls "Stock" where you can record the value of stock estimates after a stock take.

As for stock taken for personal use. It's easier if you could avoid putting the purchase through the business. Put only a portion of the purchase of the stock through. You can make a note on the invoice or bank statement if that's all you have. This is just a personal note to remind you why the lower purchase was recorded. I would expect this to be a problem as it shows a lot of honesty.

Thanks for the reply regarding the stock written off that makes it much easier

Where you say only put a portion of the purchase through the business do you mean the purchase of the goods that I will then sell on ?

How would this work as on the market stall I sell things such as biscuits and cleaning products,soft drinks which all come in case size.

Can you please explain what you mean you can expect it to be a problem as it shows a lot of honesty ? and what problems should I expect for being honest ?

Thanks

 

[carlsbitsandbobs]

The above post by carl.robertson is indeed me I managed to end up in my other username on my partners computer which is logged in automatically...but will continue to reply on this username to save confusion.

 

[carlsbitsandbobs]

thanks for the reply ayaz786amd but depending on where you are based it may work out cheaper using a uk accountant.

I would never use the cheapest accountant as it doesnt neccassarily mean the work will be done at the right time.

I am looking into a basic package and to enter the information then will be contacting a couple of accountants again to get quotes to have them reconciled and audited.

 

[E Storey]

You can also get the services of accountants outside UK. They can be very low cost.

I am ACCA qualified and have three years experience of UK accounts preparation. I have clients in UK and i am providing my services at £7 per hour at the moment. Contact me at
ayaz786amdatgmail.com

Wow!