Setting up a new business

[bobcat_1]

Hi all,

I'm thinking about setting up a computer repairs business.

I want to use Excel for my incomings and outgoings my question is, if I buy a customer a new laptop for instance, how do I record it.

Say the laptop costs £300 and I then charge labour of £90 for setting everything up would I need to include the 300 in my expenses sheet or not mention it at all as I would have bought the laptop for them but they would be paying me back £390 when the job is complete.

Hope someone can help.

 

[cheaper accountant]

The £300 paid for the laptop would be recorded as cost of sales.

 

[filtee]

Hi all,

I'm thinking about setting up a computer repairs business.

I want to use Excel for my incomings and outgoings my question is, if I buy a customer a new laptop for instance, how do I record it.

Say the laptop costs £300 and I then charge labour of £90 for setting everything up would I need to include the 300 in my expenses sheet or not mention it at all as I would have bought the laptop for them but they would be paying me back £390 when the job is complete.

Hope someone can help.

No offence but if your asking a question like that and thinking about setting up a business, i'd learn the basics of Business a bit first. With respect.

 

[Paul_Rosser]

Personally I would get the customer to buy the laptop themselves as if you purchase it, then resell it to the customer you are responsible should something go wrong with it in the future.

As you don't mention charging a mark-up on the laptop cost then it may end up costing you in the long run.

 

[bobcat_1]

Personally I would get the customer to buy the laptop themselves as if you purchase it, then resell it to the customer you are responsible should something go wrong with it in the future.

As you don't mention charging a mark-up on the laptop cost then it may end up costing you in the long run.

Hmm not sure how I see that I'd be responsible. If they give me the money first to then go and choose a computer, buy it, then give it to them whilst charging labour for my time on top then the laptop wouldn't belong to me since it was there money that bought it, they just used my guidance to select the best laptop surely?

I'd be using suppliers on the Internet you see and some people may not even have owned a computer before hence me having to buy it for them.

This is why I'm asking why I'd need to keep a record of the laptop as an expense as it's not a business expense and it's not something that will be belonging to me or bought with my money.

 

[Scalloway]

If someone else actually pays for the laptop you do not need to record it as your expense. You may wish to record its details for your future reference.

HMRC's guide to business expenses is here

http://www.hmrc.gov.uk/factsheets/expenses-allowances.pdf

 

[Paul_Rosser]

Hmm not sure how I see that I'd be responsible. If they give me the money first to then go and choose a computer, buy it, then give it to them whilst charging labour for my time on top then the laptop wouldn't belong to me since it was there money that bought it, they just used my guidance to select the best laptop surely?

I'd be using suppliers on the Internet you see and some people may not even have owned a computer before hence me having to buy it for them.

This is why I'm asking why I'd need to keep a record of the laptop as an expense as it's not a business expense and it's not something that will be belonging to me or bought with my money.

Because you are supplying the laptop to them as the transaction with the supplier is being made by you and not the customer.

The customers only has a relationship with you as thats who they gave the money to and who provided the laptop.

Unless you have a contract with the client which states you are just the middleman then technically you are responsible for returning the laptop if it develops a fault.

Or are you going to use the customers credit/debit card details to purchase the device ?

 

[MyAccountantOnline]

I agree with Paul I really would have thought you are supplying the laptop and should be invoicing for the cost of the laptop and your fee.

I see you mention using spreadsheets for your accounting records. If you want something better and free have a look here. Lots of my firms smaller clients use it. Much easier and generally more accurate than spreadsheets.

 

[DFL]

You probably wont want to hear this, and usually I am full of positives for anyone starting a buisness, BUT unless this is a sideline business, with income being topped up by salary, then think very carefully.

No one wants to pay more than £50 - £100 to have their PC compared, they would rather buy a new one.

So you have to charge fixed fee when sometimes you can be working on the repairs for hours and hours, ending up with less than NMW.

Its is very, very difficult to set up a profitable business in this field.

Have you got a business plan?

 

[DFL]

Also think about the VAT threshold implications if buying the hardware yourself, the last thing you want to do is have to get VAT registered when working for Joe Public.

 

[Paul_Rosser]

Also think about the VAT threshold implications if buying the hardware yourself, the last thing you want to do is have to get VAT registered when working for Joe Public.

Wouldn't that work out better for the OP as most laptops etc. are priced to include VAT.

So the laptop costs the OP say £360 (£300+VAT), they charge the customer this, pays the supplier £360 but can then reclaim £60 VAT.

 

[Scalloway]

The problem is that either their services become 20% dearer or they make 20% less. There is no profit on supplying the laptop so the OP would be worse off.

 

[Paul_Rosser]

Of course they would have £60 of VAT spent and £60 of VAT charged. Forgot that they would in reality be charging the customer £60 in VAT.

 

[Scalloway]

They would also have to pay over the £60 VAT paid by the customer.