simple invoicing payments question

[proofpositive]

Hi,

I am a sole trader. I work in 2 different clinic venues where my clients pay the clinic and then the clinic pays me. One is monthly by bank transfer, one is ad hoc by cheque.

This means that although I do keep a log for myself of who has paid what, and what I am expecting to receive from the clinic, I have no formal evidence of this, aside from the bank deposits. (one of the clinics sends me an invoice for the card fees for processing my payments annually, but the other doesn't bother charging me). Cash payments I tend to take direct and use old fashioned duplicate receipts and a separate account in freeagent I have named cash.

I am trying to complete my tax return through freeagent at the moment, but I am not sure if I am filling things in correctly. My bank automatically transfers the transactions to freeagent so all the deposits are there listed awaiting explanation.

Should I be creating a detailed invoice in free agent for each of these payments with names or dates/ times of clients (even if they in reality don't get sent to the clinics?). Or should just explain the payment as a sales receipt (or a different category - please advise) and assume that if the HMRC need to know more subsequently they can look at my diary printout records or handwritten records of receipts. Or something else?

I have now made some appointments with accountants so next year I don't have to worry, but it's too late for the 2012/2013 tax data cos I need to get it filed asap!!!!

So I would really appreciate any help you could give me please, thanks in advance.

 

[StevensOnln1]

Unless you have any clients who specifically request an invoice, you can just record everything you receive as a sales receipt. HMRC will only be interested in money you receive that isn't declared as income (i.e. capital introduced to the business or a loan) rather than who your clients are or what you did for them.

 

[proofpositive]

Thanks StevensOnin1, you may have just made my January!

So, just to clarify, (and because it seems so much easier than I imagined I can't quite believe it) - I can just whizz through all of those entries in freeagent and list them as sales receipt - no further information needed? Do I need to keep anything further as evidence in my paper records? I am worried about what evidence I would need if HMRC wanted question my figures - or are these bank receipts enough?

Thanks again,

 

[StevensOnln1]

You said you keep all your appointments in a diary, so as long as you would be able to go back and match all amounts received to those appointments that should be sufficient to show that you have accounted for all the income you have received.

 

[proofpositive]

Hi StevensOnIn1,

My diary is online, and sometimes ends up being inaccurate if people do not attend, but in addition I keep a written list in a little book, updated each day about who attended and how much and which method they paid - will this be OK, or should I go through my diary and cross out the ones that did not attend etc.?

I have another question, very occasionally I have asked for my rent to be taken out of the money I am owed by the clinic, because of cashflow issues, which gives the appearance of lower payments recieved than in reality - how can I record this in Freeagent?

Thanks

 

[StevensOnln1]

No point writing it all down again if you have it all online. Just make sure you have a backup of the online version in case something happens to it.

You would probably need to create a bank account in Freeagent for the Clinic and record money they receive on your behalf into it. You then record rent and any other charges as expenses paid from that account. Then record the actual payments they make to you as a transfer from the clinic to your actual bank account.

 

[proofpositive]

That is an absolutely brilliant way of doing it, and one I wish I had thought of! Thanks ;-D

 

[proofpositive]

Oh blast! I don't think it will work - the transactions go into Freeagent automatically through bank feed, and so automatically are included as part of the actual account data in Freeagent, is there another way of doing this (I am so sorry for taking up your time like this)

Thanks

 

[Alan @ Cloud Accounting]

An easy way to do this would be create a sales credit note for the rent and make sure you use the nominal code for "Rent" as opposed to "Sales". That's not really how you should do it but it will give you the correct figures as a workaround.