bank accounts and reconciliation

[Tina1]

Hello

Could anyone advise me please on some questions i have.

If a customer has a business acc and all transactions go through this and they transfer their tax (for self assessment) and course fees into a savings account (also in the savings account they use it for other non business transactions) do i need to reconcile this savings acc monthly or just reconcile the business account as usual. If we need to reconcile the savings account how do you do this with other transactions in it?
Also what would i do with the interest for this acc. How would i post it assuming i need to do anything with this acc. Sorry if this does not make sense.

Also their drawings go from the business acc to a personal acc. I assume i do not need to do anything with this acc as they can do what they want with their drawings.

Thank you

 

[elaine@cheapaccounting]

What do your T&Cs say you are providing to the client? This will determine the services you are providing.

Sounds like you are doing a sole trader?

So interest from savings account will need to go on self assessment.

Are you doing this as well as the accounts?

 

[Tina1]

yes i am just about to start doing the accounts for a friend who is a sole trader and has been in business since jan.
But i understand to reconcile the business acc as this is where most transactions happen. But if she was using the savings acc to store the 20% tax and any course fees do i really need to reconcile this acc as its just storing the money really?

 

[taxattack]

Hello

Could anyone advise me please on some questions i have.

If a customer has a business acc and all transactions go through this and they transfer their tax (for self assessment) and course fees into a savings account (also in the savings account they use it for other non business transactions) do i need to reconcile this savings acc monthly or just reconcile the business account as usual. If we need to reconcile the savings account how do you do this with other transactions in it?
Also what would i do with the interest for this acc. How would i post it assuming i need to do anything with this acc. Sorry if this does not make sense.

Also their drawings go from the business acc to a personal acc. I assume i do not need to do anything with this acc as they can do what they want with their drawings.

Thank you

Reasons for reconciling bank accounts include ensuring that the business accounts, and hence the Self Assessment return, are correct. Therefore you would want to reconcile any account which includes businesss transactions. Reconciling other accounts is "optional", but always worth checking for bank errors if nothing else.

Chris